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Swedish National Energy Administration Swedish National Energy Administration ELECTRICITY MARKET 2000 Energy and environmental policies in the Nordic countries 2 The reformed electricity market 4 Electrical energy balance 5 Electricity consumption 8 Power generation system - Hydro power 10 Power generation system - Nuclear power 12 Power generation system - Conventional thermal power, wind power and new technologies 14 Environmental impact of the power generation system 16 Trade in electricity 18 Electricity generation costs 21 Electricity prices and taxes 22 Transmission of electricity and system responsibility 27 Power generators 31 Network utilities and electricity trading companies 34 An international perspective 36 Publications in English 40 Further information 41 ELECTRICITY MARKET is published in Swedish and English by the Swedish National Energy ET 18:2000 Production: Ordforridet Bertil Ortenstrand AB Administration and can be ordered from the Energy Administration. Printed by: Alfa-Print AB, Sundbyberg Factual information is available from the Dept. of Energy Policy Analysis. General factual Paper: Lessebo Print run: 5000 copies in August 2000 information: Becky Petsala. Reformed electricity market: Claes Aronsson. Electricity bal- Cover photo: ance: Anna Lagheim. Electricity utilization: Maria Stenkvist. Hydro power, environmental © Rolf Nystrom/TIOFOTO and impact and electricity generation costs: Stefan Sedin. Nuclear power and conventional ther- © Image Makers/The Image Bank mal power: Anna Lagheim. Trade in electricity, electricity generators, network utilities and Photo on page 4: © Tomas Henriksson Photo on page 7: © Lars Dahlstrom/TIOFOTO electricity trading companies: Claes Aronsson. Electricity prices and transmission of elec- Photo on page 9: © Rolf Nystrom/TIOFOTO tricity: Maria Stenkvist. Taxes and an international perspective: Agnes von Gersdorff. Photo on page 11: © Lars Dahlstrom/TIOFOTO Photo on page 13: © Lars Dahlstrom/TIOFOTO The Project Leader was Maria Stenkvist, on e-mail address [email protected] and Photo on page 17: © Lars Astrom/TIOFOTO the Deputy Project Leader was Claes Aronsson, on e-mail address Photo on page 20: © Rolf Nystrom/TIOFOTO Photo on page 26: © Ragnar Andersson/TIOFOTO [email protected]. Photo on page 33: © Pekka Paakko/TIOFOTO Photo on page 35: © Rolf Nystrom/TIOFOTO The phone number of the Swedish National Energy Administration is +46 16 544 20 00. Photo on page 39: © Jan Rietz/TIOFOTO Further information on the Swedish National Energy Administration and its publications can be obtained on the Internet on www.stem.se. PLEASE BE AWARE THAT ALL OF THE MISSING PAGES IN THIS DOCUMENT WERE ORIGINALLY BLANK DISCLAIMER Portions of this document may be illegible in electronic image products. Images are produced from the best available original document. Foreword The electricity markets in the Nordic coun- tasks entrusted to it by the Government is to tries have undergone major changes since follow developments on the electricity mar- the electricity market reform work was ket and to regularly compile and report cur- started in the early 1990s. Sweden, Norway rent market information. and Finland have a common electricity mar- The purpose of the "Electricity market ket since 1996. The work of also reforming 2000" publication is to meet the need for gen- the Danish electricity market was begun in eralized and readily accessible information on the year 2000. the conditions on the Nordic markets. The The objective of the electricity market publication includes summaries of informa- reform is to introduce increased competi- tion from recent years concerning electricity tion, to give the consumers greater freedom generation and utilization in the Nordic coun- of choice and also, by open and expanded tries, the structure of the electricity market trade in electricity, create the conditions for from the players' perspective, trade in elec- efficient pricing. tricity in the Nordic countries and in Northern The Swedish National Energy Adminis- Europe, electricity prices in the Nordic and tration is the supervisory authority as speci- other countries, and the impact of the electri- fied in the Electricity Act, and one of the city sector on the environment. is Eskilstuna, August 2000 Thomas Korsfeldt Becky Petsala Director-General Head of Dept. of Energy Policy Analysis Energy and environmental policies in the Nordic countries The electricity market in the Nordic coun- rules concerning supervision of the electri- cording to the Climate Committee, the tar- tries has undergone extensive changes in the city market were clarified. The Swedish Na- get is that the emissions of greenhouse gases past decade. All of the Nordic countries, tional Energy Administration was given di- in Sweden should be reduced by around with the exception of Iceland, have now rect responsibility for supervising the elec- 50 % by the year 2050 compared to the emis- opened their electricity markets to competi- tricity sales that took place within the frame- sions in 1990, and should then be lowered tion. In Sweden, Norway and Finland, the work of delivery concessions. The demand further. As a short-term target for the period M market is open to all electricity users, for hourly metering of electricity was with- between 2008 and 2012, it is suggested that v V - * whereas Denmark has opened its electricity drawn on 1 November 1999. At the same the emissions should be reduced by 2 %. market only to customers whose electricity time, the delivery concession system was However, Sweden's international undertak- consumption is high. During 1999, Jutland abolished. ings in the Kyoto protocol give Sweden the and Funen have joined the Nord Pool Nor- right to increase its emissions by 4 %. The dic electricity exchange, and Zealand is ex- Towards a sustainable energy system plan of action consists of a basic package of ***>, pected to join Nord Pool during the year The Riksdag decided on new guidelines for measures that can be decided and largely 2000. the Swedish energy policy in June 1997. introduced immediately, and an additional If an integrated electricity market is to The objective of the energy policy is to safe- package of measures to be introduced at a perform well, it is vitally important to es- guard - in the short term and in the long later date. The additional package includes tablish common rules and conditions on the term - the availability of electricity and en- actions and regulatory measures that allow markets of the individual countries. The en- ergy from renewable energy sources on for additional emission decreases beyond the ergy policies of other countries, and above terms that are competitive in relation to the basic package, but that demands further con- all of the Nordic countries, have therefore surrounding world. The energy policy must sideration. become of growing importance to Sweden. create the conditions for efficient energy util- During April 2000, the "Investigation into ization and a cost-effective Swedish energy S5-'i ',•-*•! Another change is that environmental mat- the opportunities available for utilizing the ters have become of growing importance in supply. At the same time, the impact on flexible mechanisms of the Kyoto protocol in guiding the energy policy. In many countries, health, the environment and the climate must Sweden" has also presented its final report the energy sector is a major source of emis- be low, and conversion to an ecologically (SOU 2000:45). The report suggests that Swe- sions of carbon dioxide, sulphur dioxide and sound society must be facilitated. Accord- den, together with the EU, should introduce a also nitrogen oxides. However, with the ex- ing to the decision, phasing out of nuclear system of trade in emissions up to the year ception of Denmark, the electricity genera- power would be started. In December 1997, 2005. According to the proposal, the trading tion sector has made a relatively modest con- the Riksdag passed the Nuclear Power system should cover emissions of carbon di- tribution to the emissions in the Nordic coun- Decommissioning Act, and the Government oxide from activities that now pay the whole tries, due to the high proportion of emission- decided in February 1998 that Barseback 1 or half of the carbon dioxide tax. Activities free electricity generation. would be decommissioned no later than the that today pay no carbon dioxide tax should end of June 1998. However, shut down of be exempted, e.g. emissions from industrial Sweden Barseback 1 was postponed to 30 Novem- processes. When the trading system is intro- Sweden opened its electricity market to com- ber 1999. According to the energy policy duced, it would replace the carbon dioxide petition in 1996, when extensive changes decision, Barseback 2 will be decommis- tax. It is suggested that, from the year 2008, were made to the Swedish electricity legis- sioned in 2001, provided that the loss of the trading system should be expanded to lation. The purpose of the electricity market generation capacity can be compensated by cover a larger number of emission sources reform is to introduce increased competi- reduced electricity consumption and in- and further greenhouse gases. creased supply of electricity. The 1997 en- tion and provide the consumers with greater In addition, an inter-departmental commit- ergy policy programme is now being evalu- freedom of choice and, by open and in- tee was entrusted with the task of reviewing, ated, which will serve as a basis for a deci- creased trade in electricity, to create the con- during the spring 2000, the support system sion by the Riksdag concerning possible ditions for efficient pricing. The electricity . for renewable electricity generation. The mat- decommissioning of Barseback 2. networks throughout the country must be ter will be considered further in future draft open to all players on the electricity market A comprehensive energy policy pro- bills. The taxation system in the field of en- - electricity generators, electricity sellers and gramme was started, with the aim of facilitat- ergy is now also being reviewed. electricity customers who have paid a con- ing the change-over and development of the nection charge somewhere in the country.
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