Electrifying changes: What going greener may look like for Sweden

January 11, 2023

Greenhouse gas (GHG) emissions are the driver of the climate crisis, responsible for changes in water balance, biodiversity loss, and negative impacts on human health. The past few years have provided many examples of how climate risks are increasing along with global temperatures, floods, heatwaves, and storms leading to billions of dollars in damages and countless lives lost around theworld1. Societal development, improved living standards, and achieving Sustainable Development Goal (SDG) 7 all depend on access to a sustainable, stable, affordable electricity supply.  With the electrification of industry and more nations experiencing prosperity increases, it is expected that the global demand for electricity will continue to grow. Different scenarios suggest that by 2050 we will be using between 75% to 150% more than the 25000 TW used today2,3. To meet the targets required for limiting global warming as much as possible, this increase in capacity must come from carbon- and GHG-neutral solutions, while existing capacity must be rapidly transitioned away from fossil-fuel sources. (Fig. 1)

Figure 1: Global CO2 emissions by source and other milestones in the electricity sector from the IEA Net-Zero Scenario for 2020-2050. By 2040 the progress to net-zero will enable other sectors to cut emissions through electrification. TWh = terawatt‐hour; CCUS = carbon capture, utilization, and storage. Figure and text from IEA WEO Report 2022, used under CC license BY 4.0.

Where are we now and where do we need to go?

Globally, over 60% of electricity is produced through the consumption of coal, oil, and fossil gas2. By contrast, the EU's average amount of electricity produced from fossil sources comes in at >35%, though the range of EU countries (excluding Sweden) falls between 8-88%.

Figure 2: Global electricity production by source. From Our World in Data, CC BY 4.0.

Historically, Sweden has benefited from access to cheap and reliable electricity facilitating the development of industry and other business sectors. Early adoption of climate-friendly ideas, including public policy supporting decarbonization beginning in the 1990s prepared industries for fossil-free thinking, and many businesses are already well ahead in planning for zero-carbon and fossil-free production4. In 2021 Sweden produced only around 0.5% of its 165 000 GWh of electricity from fossil fuels, and more than 60% of electricity produced in Sweden comes from renewable sources, with hydropower responsible for the majority of that amount5 (Fig. 3). Renewables such as wind- and solar power are on the rise. Wind power is already clocking in at nearly half the contribution of hydropower, with nearly 30 000 GW produced in 2021. Solar photo voltaic (SPV) continues to grow with 1 600 MW of installed solar energy potential in Sweden at the end of 20216. Over 50% of that was contributed from small-scale solar installations. Small-scale solar provides a new inroad for more individual and local electricity production, and demand for small-scale solar installations reached new highs in 2022. Unstable rising prices and an increased desire for self-sufficiency have contributed to this rise in demand. While there are individual benefits to self-sufficiency, configurations with more small producers require new transmission approaches and regional and local delivery net integration7.

Figure 3: Sweden's electricity production by source. From Our World in Data, CC BY 4.0.

The national projected demand for electricity has increased drastically over the past 5 years and is expected to double from today’s 140 TWh, reaching over 300 TWh annually by 20458. In part, this is due to Sweden’s position as a resource-rich country. Critical mineral demand is expected to rise from 7 Mt per year to as much as 20 Mt per year by 2050 as the production of materials needed for the renewable transition takes off3. This will require carbon-neutral extraction and manufacturing plants that use electricity rather than fossil fuels for their processes. Facilitating the electrification of all currently fossil-reliant transit and transport will also require additional resources and electricity for charging. The good news is that with innovative and ambitious corporate initiatives along with national and EU-level legislation, GHG emissions-neutral by 2045 is a goal that could very well be achieved9. Some companies that today lead the market in greener industrial materials are already seeing that their products are more competitive than similar materials from more carbon intense producers10. Going green will serve the interests of maintaining a position as an innovator in the global economy and protect the goal of a healthier planet.

So how will this new electricity demand be met?

Despite the tunnel vision favouring one production method espoused by some, it is clear to the majority of those in the energy production sector that only a mix of carbon-neutral techniques and methods which includes plannable and intermittent electricity production will enable us to meet rising demands. Electricity demand is increasing at unprecedented rates, and a recent report indicates that peak demand will continue to exceed local supply in Stockholm and Uppsala until 2030 unless new production is placed closer to these densely populated areas11. While we have yet to reach a situation where parts of the net are disconnected to maintain balance in the system, this remains a possibility. The imbalance and bottlenecks have led to planning refusal for enterprises whose expansion depends on a new connection to the local electrical net. The focus and public discourse must move to how to scale up production quickly and dynamically at pace with demand, provide ambitious robust policy support and incentives for an equitable market, and integrate these solutions into a modern electricity network. Beyond new production facilities, the market for support services and incentives for flexibility and storage is growing and the future electricity market will be far more digital and responsive than today’s configuration.

Svenska Kraftnät (SK) predicts that between today and 2040 peak power demand (sv. toppeffektbehov) could be much less variable than electricity production, and the situation could be difficult or even unsustainable as demand exceeds supply. In part, balancing the complexity of the electricity network will require building flexibility into the user side of power distribution, especially for industrial customers who are major electricity consumers.  New tech innovations and digitalization will interact through monitoring, production, and use of electricity resources in the most efficient way through smart homes. With digitalization and automated regulation of the electrical grid and production, IT security also becomes a substantial part of the complex puzzle of the new electricity network. Importing and exporting electricity to balance out the supply and demand peaks and respond to changes in processes driving fluctuations is an established practice today7. However, today's electricity market's interconnectedness and international nature can also create new vulnerabilities to geopolitical instabilities, despite providing a more responsive and spatially dynamic supply. In the long term, the transmission of electricity within Sweden and internationally to (and from) neighbouring countries will remain significant even as new production facilities are brought online.

Research institute Energiforsk cites the importance of significant investments in all parts of the energy system as key to meeting the increased demand for electricity12. While the exact constellation of production methods is not yet decided, SK is already working on a massive grid upgrade that will run until 2031 and is estimated to cost over 100 billion kronor12. This will replace facilities and transmission lines nearing the end of life, prepare for production facilities in new areas, provide more secure power transmission, and enable intermittent sources of power such as wind and solar to play a larger role in electricity production.

Production methods

SK predicts that in the future electricity production could include a mix of green hydrogen-powered turbines (green hydrogen refers to hydrogen produced using renewable electricity for the electrolysis process, with zero carbon emissions), nuclear plants, wind and solar, district heating- and power plants, and biofuels. As for the location of these systems, there is a consensus that placing some facilities in the southern part of the country would be the most appropriate way to address the high demand in what today is an area with low power generation possibilities. However, the highest increases in electricity demand will come from the northern part of Sweden because of the greening of existing and planned industries.

Resource extraction and refinement as well as battery manufacturers which are newly operational or slated to be developed aim to green their processes by using electricity produced from green hydrogen. These new facilities will, at minimum, double the amount of electrical power used in northern Sweden. In Norrland, heavy industry is the major electricity consumer and today the difference between summer and winter electricity usage is around 65%, while by contrast day/night and weekday/weekend use vary only by 10% or less, requiring sustained peak power demand at different levels throughout the year13.Offshore wind production representatives estimate they could be providing fully half of the annual national electrical demand in Sweden by 2045, and predict huge expansions of offshore wind in Europe, Asia, and North America. But what happens when the wind is not blowing? How do we make intermittent sources into dispatchable electricity that is available when we need it and not only when the weather is favourable? The current upgrading of the power grid is planning decades ahead in this regard, but the exact methods for balancing production and demand are likely to be as varied as the production methods themselves, and it is in this sector along with support services that new tech and software can make major contributions.

Evening out the peaks
Figure 4: In peak shaving, energy is stored when demand is low and discharged later when demand is high.

Storage solutions to help balance peak demand through peak shaving (Fig. 4) (where energy is stored during lower demand and discharged during high demand) and load shifting (where activities are shifted in time but power production remains near constant) are currently hot topics in the global discussion on the energy transition. For energy storage, discussions and research on methods such as  pumped hydro, compressed air, and new innovations in thermal storage are ongoing14. These methods are being complemented with short-term storage in battery parks, which are being used to great advantage in places like California.

In Sweden, the long history of using hydropower gives a solid foundation for re-imagining existing resources as a potential for pumped hydro storage, and battery storage is looking increasingly viable for large-scale use15. Lower electrical performance and high costs were previously seen as limiting factors in the feasibility of switching to renewables, but as improvements in battery systems continue and costs fall, those limits are disappearing as intermittent power sources are now able to function as dispatchable electrical sources. Way et al. (2022) conclude that the probability of further cost reductions in green energy tech is so high that coupled with the modelled falling costs for energy storage used to buffer intermittent supply we stand to save twelve trillion dollars globally compared to continuing to drag our feet on phasing out fossil fuels16.

California and the case for battery storage

Dispatchable renewables are also providing more stability to the power supply, and an excellent example of this is how California has implemented battery storage on an industrial scale. This setup helps stabilize power flows and provides balance and stabilization to the electrical grid and electricity prices17.Every large-scale solar project is installed with battery systems, and the scaling up of batteries 10-fold over the past two years has already shown its value. A September 2022 heatwave which could have caused extremely disruptive outages for power users was partially mitigated through extensive battery storage.  These systems prevented a repeat of the heatwave and electricity crisis of 2020 when rolling blackouts went on for days, leaving people without access to cooling and necessary services. Upscaling of battery systems over the past 2 years meant that batteries went from providing 125 MW of power over 2 hours in 2020 to over 3360 MW of power during the critical peak in the 2022 heat wave. Battery-distributed electricity contributed 4% of the total electricity used, more than the Diablo Canyon nuclear power plant- the state’s largest electricity generator. Seeing the benefits of their ambitious public policy choices to invest in renewables and make those sources dispatchable, California is planning to double its current battery storage capacity over the next few years.  Critical mineral availability and prices, improving efficiency, and achieving circularity in the battery will influence the degree to which batteries can be integrated into the electricity network, but it is clear batteries have a role to play.

Plannable Electricity

Plannable electricity generation is the flipside of the coin to intermittent producers like wind and solar. In moving away from coal, oil, and gas there is a gap that needs to be bridged to provide consistent and reliable electricity to the grid as demand grows. As for which production methods will be used, it is likely that an expansion of nuclear power and the replacement of nuclear plants nearing their end of life will be one component. By contrast to today’s large reactors, there seems to be a growing interest in small-scale generators which can run intermittently and at varying levels of effect. New technologies for nuclear power such as molten salt reactors are changing the type of facilities that can be built, and the resources needed to operate them. We are also likely to see green hydrogen-powered turbines replacing or supporting existing turbine plants which rely on hydropower, perhaps in a similar configuration to the facility being built by Vattenfall in the Netherlands. At the same time, there is some ambiguity about the role that district power and heating plants will play but given that they currently provide around 8% of Sweden’s electricity supply and provide a valuable service by balancing local power demands it is unlikely they will disappear.

Transitioning the Transport Sector

While Swedish electrical power generators have made great strides in decarbonizing over the past 30 years, there is still an overwhelming reliance on fossil fuels in other sectors, such as for transport and transit. Electric and hybrid cars are the most popular choice for buyers today and as of December 2021, there were nearly 3000 charging stations with over 16 000 charge ports supporting the electric vehicle transition18.Even industrial truck transport is going green, and major investments in charging stations with rapid charging are being coordinated by the Swedish Energy Agency to serve both commercial and private vehicles, but fossil-fuelled cars and trucks still account for most vehicles on the road. The overall dependence on fossil-based fuels means that even with a very rapid transition we face decades of industrial transition while we phase in zero-carbon replacements. This transition period will require support and policy, allowing the move to zero-carbon to succeed when conditions constantly change.

Greening the future

Lowering carbon emissions and transitioning to net zero will require nothing short of a complete transformation of the types of energy production used at a global scale, and it will not happen overnight. Additionally, it can only succeed if we continue the work to use energy more efficiently. While the foundation for changing our thinking about energy sources began decades ago it has required a global climate crisis to drive home the importance of achieving net-zero carbon emissions as quickly as possible. Sweden is already ahead of the curve in phasing out fossil fuels as a source of electricity and with many industries already invested in a green transition and electrification, net-zero by 2045 remains achievable if a mix of production methods, ambitious public policy and incentives, and innovative approaches are kept at the forefront. Flexibility, digitalization, and efficiency will be key as we diversify the types of production from familiar large producers to more distributed contributors. By investing in an electricity network that is focused on the solutions we will depend on for decades to come, we are improving the chances we can meet our rising electricity demands today.

  1. Climate ChangeIntensifying (McKinsey Sustainability, 2020)
  2. Energy on OurWorldInData.org. (OurWorldInData.org)
  3. World Energy Outlook 2022 (International Energy Agency)
  4. The Swedish energy transition. A race far from won (Jacques Delors Institute)
  5. Production of electricity by source (Eurostat, European Commission)
  6. Statistik (Svensk Solenergi, 2021)
  7. Systemutveckingsplan 2022-2031 (SvenskaKraftnät)
  8. Scenarier över Sveriges energisystem 2020 Rapport ER 2021:6 (Energimyndigheten)
  9. Swedish Energy Policy Council (KlimatpolitiskaRådet)
  10. Podcast – Göran Nyström, Ovako (Energistrategipodden,2022)
  11. Elbrist I Storstaderna (Pär Holmberg and Thomas P. Tangerås)
  12. Framtidens Elmarknadsdesign Rapport 2022:893 (Energiforsk)
  13. Norrbottens Framtida Elbehov, 2022 (Region Norrbotten & Energikontor Norr)
  14. Long Duration Energy Storage (McKinsey Sustainability 2022)
  15. Den svenska elmarknaden – idag och i framtiden (Pär Holmberg & Thomas Tangerås, 2022)
  16. Empirically grounded technology forecasts and the energy transition (Way et al., 2022)
  17. California’s giant new batteries kept the lights on during the heat wave (LA Times.com, 2022)
  18. Elbilen det populäraste valet hittills under 2022 (Power Circle)

Other background sources for this research included many episodes of The Energy Transition Podcast, Energy vs Climate podcast, Energistrategipodden, and How to Save a Planet podcast.