Energy Policies of IEA Countries: Sweden 2000

International Energy Agency

The International Energy Agency's 2000 review of Sweden's energy policies and programmes. It finds that Sweden is phasing out nuclear power that currently generates about half its electricity. One reactor was closed in 1999 and a second may be closed in 2001, if certain criteria are met. Renewables and improved efficiency in the use of energy are considered to be the only alternatives: natural gas and coal are rejected on environmental grounds; and new hydro capacity is limited by Parliament.

This report looks at the feasibility of Sweden’s plans. Two overriding concerns are evident in Swedish policy: to keep down electricity prices to maintain industrial competitiveness and economic growth, and to achieve Sweden’s target for greenhouse gas emissions. Energy taxation has been designed to support both objectives. The competitive Nordic electricity market has been important in maintaining low electricity prices. Sweden’s per capita carbon dioxide emissions are among the lowest of all OECD countries, largely because of reliance on nuclear and hydro-electric power. The potential contribution of natural gas to balancing economic and environmental objectives in the Swedish context should not be dismissed. Energy efficiency improvements will have to be large and sustained to justify closure of nuclear capacity – possibly larger than recent trends suggest may be achieved.

In addition to these long-term issues, the Swedish electricity supply industry faces the need to adapt the regulatory and institutional framework to an increasingly open electricity market, and to integrate environmental objectives within this framework.