2. GENERAL ENERGY POLICY
Sweden is a constitutional monarchy in which the king has a representative role only. The single-chamber parliament (the Riksdag) is directly elected by proportional representation. Since October 2014, Sweden has been ruled by a centre-left minority government of the Social Democratic Party and the Green party. Parliamentary elections were held in September 2018 and after four months negotiations the government was re-elected in January 2019, supported by two liberal parties through the so-called
January Agreement.
Sweden is a unitary state with 21 administrative counties. The development of energy policy rests with the government, supported by several implementing national authorities and active local authorities.
Sweden joined the European Union in 1995, but it decided to stay out of the euro area and maintains the Swedish krona. The European Union sets legal requirements for the Swedish energy policy, particularly the electricity and gas markets, energy efficiency, renewable energy, energy taxation, state aid, environment and greenhouse gas (GHG) emissions.
Supply and demand
Sweden’s energy supply is characterised by high shares of hydropower, nuclear power and bioenergy, which together accounted for 95% of domestic energy production and 73% of the total primary energy supply (TPES)1 in 2017 (Figure 2.2). Sweden has a large and growing supply of bioenergy, mainly from domestic forest resources. The hydropower, nuclear power and bioenergy production brings Sweden’s overall self-sufficiency in energy to over 70%, despite having no domestic fossil fuel production (besides a small supply of peat). Oil is the largest imported energy source and accounted for 84% of the total energy imports to Sweden in 2017 (not including the uranium fuel for the NPPs). Natural gas consumption is very small, mostly limited to process industries and some electricity and heat production.
Ambitious environmental and climate policy has led to a transition of Sweden’s energy system, which is mainly visible in energy transformation sectors. Electricity generation is nearly emissions free, thanks to the large production from hydropower and nuclear power, each of which provide about 40% of domestic production, together with wind and bioenergy and waste, which account for most of the rest. In recent years, wind power has grown rapidly and made Sweden a net exporter of electricity. The large district heating (DH) sector is also supplied mainly with low-carbon energy sources, such as biofuels and municipal waste.
The country has a large energy-intensive industry sector, which accounts for 40% of total final consumption (TFC)2 (Figure 2.2). The high energy intensity is mainly due to processing of domestic resources like wood and iron ore. Energy use in the pulp and paper industry is particularly high, but the sector is almost self-sufficient, owing to the use
1TPES is made up of production + imports – exports – international marine and aviation bunkers ± stock changes. This equals the total supply of energy that is consumed domestically, either in transformation (e.g. power generation and refining) or in final use. Nuclear energy supply in TPES includes losses. The primary energy equivalent of nuclear electricity is calculated from the gross electricity generation by assuming a 33% conversion efficiency.
2TFC is the final consumption of energy (electricity, heat, and fuels, such as natural gas and oil products) by end users, not including the transformation sector (e.g. power generation and refining).
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ENERGY INSIGHTS
IEA. All rights reserved.
2. GENERAL ENERGY POLICY
of its by-products and waste wood for heat and power generation. Transport is the second-largest energy consumer. It is also the only sector that remains largely dependent on fossil fuels and in which energy demand has increased in recent years.
Figure 2.2 Overview of energy production, TPES and TFC by fuel and sector, 2017
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Mtoe |
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50 |
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Heat |
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Electricity |
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Imports |
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Transformation and losses |
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Nuclear |
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Natural gas |
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Industry |
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Oil |
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Coal |
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Production |
TPES |
TFC (by fuel) |
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Domestic bioenergy, nuclear power and hydropower dominate the energy supply. Sweden is relatively independent of energy imports, except for oil.
Note: TPES does not include oil supplied to international bunkers.
Source: IEA (2019 forthcoming), World Energy Balances 2019 preliminary edition, www.iea.org/statistics/.
Primary energy supply
Since the introduction of nuclear power between 1973 and 1986, TPES has remained at around 50 million tonnes of oil equivalent (Mtoe) (Figure 2.3). However, the energy mix has changed, with a large shift from oil towards solid and liquid biofuels and, in recent years, also the growth in wind power (which is more visible in a comparison of electricity sources). From 2007 to 2017, the supply of biomass-based fuels and waste increased by 24% across sectors such as heat and power generation, the pulp and paper industry, and the residential and transport sectors. Over the same decade, oil supply declined by 20%, replaced mainly by biofuels in the transport sector and biomass in residential heating.
Nuclear power remains a large source of primary energy in Sweden despite a 6% decline in the past decade. However, the share of nuclear in TPES includes losses in power generation, which is not the case for hydropower or wind power (see footnote 1). Two nuclear reactors were closed in recent years, and two more are scheduled to close by 2020. In contrast, renewable energy continues to gain ground in electricity generation. Wind power in particular has increased significantly in recent years, supported by the electricity certificate system (Chapter 7).
In 2017, the share of fossil fuels in Sweden’s TPES was 30%, by far the lowest among International Energy Agency (IEA) member countries (Figure 2.4). Today, coal (4% of the TPES) is mostly used in the steel and cement industry, whereas natural gas (1.4% of the TPES) is mainly supplied through a network that only covers the southwest of the country. The share of nuclear power in TPES is the second highest after France and the share of biomass-based fuels and waste is the third highest after Denmark and Finland.
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IEA. All rights reserved.
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2. GENERAL ENERGY POLICY |
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Figure 2.3 TPES by source, 1973-2017 |
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Nuclear |
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Bioenergy and waste |
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Solar* |
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Bioenergy and waste supply increased rapidly in recent decades and, in 2015, it overtook oil as the second-largest primary energy source after nuclear power.
* Negligible.
Notes: Nuclear supply includes thermal losses. Electricity imports and exports are not included.
Source: IEA (2019 forthcoming), World Energy Balances 2019 preliminary edition, www.iea.org/statistics/.
Figure 2.4 Breakdown of TPES by source in IEA member countries, 2017
Australia Netherlands Japan Poland Luxembourg Mexico Ireland Greece Turkey Korea Estonia* United States Italy Germany
United Kingdom Portugal Spain Canada
Czech Republic Belgium Hungary Austria Slovak Republic Denmark New Zealand Switzerland Norway France Finland
Sweden
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20% |
40% |
60% |
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80% |
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Oil |
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Coal |
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Peat |
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Nuclear |
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Hydro |
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Biofuels and waste |
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Geothermal |
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Of the IEA member countries, Sweden has the lowest share of fossil fuels in TPES thanks to a large supply of nuclear power, bioenergy and hydropower.
* Estonia’s coal is represented by oil shale. Note: Data are provisional.
Source: IEA (2018), World Energy Balances 2018, www.iea.org/statistics/.
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ENERGY INSIGHTS
IEA. All rights reserved.
2. GENERAL ENERGY POLICY
Energy consumption is relatively stable
Since peaking at 36.8 Mtoe in 1996, TFC declined slowly to around 33 Mtoe in the past decade. In 2017, TFC was 33.5 Mtoe, 3% less than in 2007, but 5% more than in 2014. Although energy consumption is mostly stable, it varies somewhat year-on-year according to temperature and business cycle. Examples are the drop in industrial energy demand after the financial crisis in 2008 and the peak in residential energy demand during the cold winter of 2010 (Figure 2.5). Electricity is the largest source of TFC, at one-third in 2017, followed by oil, biomass-based fuels and waste, and DH (Figure 2.6).
Figure 2.5 TFC by sector, 1973-2017
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Mtoe |
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Industry* |
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Commercial** |
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Industry is the largest energy consumer, at around 40% of TFC, of which nearly half goes to pulp and paper production.
*Industry includes non-energy consumption.
**Commercial includes commercial and public services, agriculture and forestry.
Source: IEA (2019 forthcoming), World Energy Balances 2019 preliminary edition, www.iea.org/statistics/.
Figure 2.6 TFC by source and sector, 2017
Industry* |
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Oil |
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22% |
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5% |
5% |
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31% |
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33% |
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4% |
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Transport |
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3% |
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Natural gas |
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79% |
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18% |
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Coal |
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Residential |
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Bioenergy and waste |
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13% |
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52% |
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35% |
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Electricity |
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Commercial** |
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2% |
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9% |
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5% |
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56% |
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28% |
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Heat |
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Total |
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2% |
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30% |
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2% |
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20% |
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33% |
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13% |
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0% |
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20% |
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40% |
60% |
80% |
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100% |
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Electricity, DH and biofuels are the largest energy sources in all the sectors except for transport, where oil still dominates despite a recent increase in biofuels.
*Industry includes non-energy consumption.
**Commercial includes commercial and public services, agriculture and forestry.
Source: IEA (2019 forthcoming), World Energy Balances 2019 preliminary edition, www.iea.org/statistics/.
Industry is the largest energy consumer, at 40% of TFC. In 2017, the total industry energy consumption was 13.4 Mtoe. Pulp and paper is by far the largest industrial
24
IEA. All rights reserved.