How should we design our future energy system to meet the demands of our climate targets while at the same time offering a secure supply of energy? Project timeframe 2021–2024.
The energy system – meaning the supply, transformation, distribution and use of energy – is a key element of society. The prosperity created in Sweden and in other parts of the world would not have been possible without secure access to energy. From a global perspective, energy largely originates from fossil sources such as oil, coal and gas, and according to the UN Intergovernmental Panel on Climate Change (IPCC), the energy system is the largest emitter of greenhouse gases. If we want to remain prosperous, while also achieving our climate targets based on international agreements, we need to drastically change our energy system.
The transport and industrial sectors are crucial for society while also requiring a great deal of energy. Combined, these sectors account for about 60 percent of the total energy use in Sweden. Other basic functions in society, such as buildings and various types of information infrastructure, also depend on secure access to energy. A prerequisite for converting the energy system is thus to ensure the supply of energy. The focus of our future energy system may also influence to what extent Sweden becomes dependent on other countries, thereby also our level of vulnerability from a geopolitical perspective.
“If we introduce tougher regulations or instruments compared to other countries or regions, emissions will simply move to somewhere else.” This argument regarding carbon leakage often comes up in discussions on energy and climate issues. However, which types of scientific evidence back this claim? And what does the other side of the coin look like? In a world focusing on sustainability, fossil-free energy and zero emissions in 20–25 years’ time, is it possible that tougher regulations and instruments aimed at limiting emissions actually turn into a competitive advantage? If this is combined with an offer of clean energy, how might this affect Swedish competitiveness? These questions will be discussed by the authors of this report.
Authors: Shon Ferguson, associate professor at the Swedish University of Agricultural Sciences, Rikard Forslid, professor at Stockholm University, Mark Sanctuary, researcher at the Swedish Environmental Research Institute.
Energy Systems Integration (ESI) is an emerging paradigm and is at the core of the EU’s energy transformation. The idea is to adopt a holistic perspective with regard to the electricity, gas and heating sectors in order to deliver the cleanest, most reliable and cost-effective energy system possible. By utilizing synergies within and between sectors, ESI aims to increase the flexibility of the energy system and maximize the integration of renewable energy and distributed production. This may enable reducing the environmental and climate impact of the energy system. ESI has been studied from a technological perspective, but what do the economic conditions look like and which are the most important considerations in terms of policy?
Author: Carlo Cambini, professor of applied economics at the Polytechnic University of Turin/Politecnico di Torino
Effective solutions for addressing local power shortages mean that there must be financial incentives for flexible local production and consumption, rather than solely relying on expanding the electrical grids. This report will utilize socio-economic analysis to study how different market solutions can contribute to solving local power shortages in a cost-effective manner, given existing limitations in the electrical grid.
Authors: Thomas Tangerås and Pär Holmberg, both associate professors of economics, take part in the research program Sustainable Energy Transition at the Research Institute of Industrial Economics (IFN).
Swedish electricity network charges have increased sharply in Sweden over the past decade. Why is that? What is the trend in other Nordic countries? The electricity system in Sweden has been relatively static for several decades before the turn of the century. This is in sharp contrast with the expectations that lie ahead, with increased electrification in many sectors in order to reduce climate impact. It will be important to review the regulatory model and how well it creates incentives for investments in the electricity networks. Yet, it is not only investment incentives that are important, regulation must be effective with regards to several criteria. Not least, it must ensure a secure electricity supply, with few and short interruptions, and affordable prices for consumers.
Author: Magnus Söderberg, Professor of Business Administration at the Academy of Business, Innovation and Sustainability, Halmstad University and Erik Lundin, researcher in the Sustainable Energy Change program at the Institute for Business Research.
Large infrastructure projects, such as wind farms, have important social benefits, but also tend to prompt strong local opposition. This is often attributed to Not In My Backyard attitudes (NIMBYism). This report considers the economic costs of NIMBYism and local planning restrictions by looking at renewable energy projects. Is there a difference between different renewable sources? What is the economic cost of the local opposition? And how could policy be designed to compensate at the local level?
Author: Stephen Jarvis, Assistant Professor in Environmental Economics in the Department of Geography & Environment at the London School of Economics and Political Science.
E.ON, Ellevio, Fortum, Göteborg Energi, Holmen, Installatörsföretagen, Kraftringen, Lantmännen, Piteå Municipality, SCA, Scania, Skandia, SSAB, Stockholm Exergi, Svenska Kraftnät, Swedish Energy Agency, Swedish Energy Markets Inspectorate, Swedish Ministry of Finance, Swedish Ministry of Infrastructure, Swedish Ministry of the Environment, Swedish Society for Nature Conservation, Swedish Transport Administration, Vattenfall.