Nordic Energy Market - Sweden

Sweden

The 1973 oil crisis strengthened Sweden's commitment to decrease dependence on imported fossil fuels. Since then, electricity has been generated mostly from hydropower and nuclear power. Among other things, the accident of Three Mile Island Nuclear Generating Station (USA) prompted the Swedish parliament to hold a referendum on nuclear power. The referendum led to a decision that no further nuclear power plants should be built and that a nuclear power phase-out should be completed by 2010.

In 2006, out of a total electricity production of 139 TWh, electricity from hydropower accounted for 61 TWh (44%), and nuclear power delivered 65 TWh (47%). At the same time, the use of biofuels, peat etc. produced 13 TWh (9%) of electricity, while wind power produced 1 TWh (1%). Sweden was a net importer of electricity by a margin of 6 TWh. Biomass is mainly used to produce heat for district heating and central heating and industry processes.

In March 2005, an opinion poll showed that 83% supported maintaining or increasing nuclear power. Since then however, reports about radioactive leakages at a nuclear waste store in Forsmark, Sweden, have been published, although this does not seem to have changed the public support of continued use of nuclear power. In 2010 Parliament halted the phase-out policy, allowing for new reactors to replace existing ones.

In an effort to phase out the dependency on nuclear power and fossil fuels, the Swedish government has launched a multi-billion krona programme to promote renewable energy and energy efficiency. The country has for many years pursued a strategy of indirect taxation as an instrument of environmental policy, including energy taxes in general and carbon dioxide taxes in particular. Also in 2005, Sweden garnered international attention by announcing its intention to break its dependence on foreign oil within 15 years, with the goal of becoming the world's first oil-free economy.

Internal bottlenecks in the Swedish electric grid (Cut 2 and Cut 4) restrict transmission of electricity between hydro plants in the north, and nuclear and fossil plants in the south. Sweden had a policy of a single system price regardless of power differences between areas up until 2011. This was changed and today Sweden has different price zones.