Sweden's Road To A Sustainable Energy Future

By Anna-Karin Hatt, Minister for Information Technology and Energy, Sweden
Autumn 2013

Sweden has long enjoyed strong public support for its climate, energy and environmental policies. When the issue of climate change was raised by the Intergovernmental Panel on Climate Change, there was a general consensus among our political parties that this challenge must be addressed and that Sweden should take an active role in tackling this challenge.

Since Sweden's historic climate and energy package, presented in 2009, our energy policy has been based on three vital pillars: creating an energy system that is ecologically sustainable, ensuring greater competitiveness, and increasing the security of supply. These three pillars are designed to help us reach our ambitious goal of making Sweden carbon neutral by 2050.

Today it is clear that Sweden has already come a long way and that we are still making substantial progress. Since 1970, we have managed to cut our use of fossil fuels from over 80 per cent of our total energy consumption to currently less than 35 per cent. Today almost half of Sweden's energy comes from renewable sources. We have managed to combine high and sustainable economic growth with a significant decrease in greenhouse gas emissions.

One of the driving factors behind this development has been, and is, our carbon tax, which was introduced already in 1991. By internalising the external costs of fossil fuel use, we have been able to drive innovation in the energy sector. Combined with good conditions for renewable energy sources, we have been able to phase out the use of fossil fuel from almost our entire heating sector and most of our industrial sector.

To support renewable electricity, ten years ago Sweden introduced the market-based system of green-certificate schemes. This market-driven, technology neutral instrument has truly supported a really cost-effective expansion of renewable electricity. Both the carbon tax and green certificates will continue to remain important key elements in the future, too.

In addition to this, Sweden, as a small export-oriented country, puts strong emphasis on open markets and close interaction with our neighbouring countries. This holds true for our reduction of greenhouse gas emissions and the development of renewable energy. One illustration of this was the world’s first cross-border support scheme for renewables, introduced in 2012, when Sweden and Norway established a common green certificate market.

Although we have a strong track record, many challenges remain to be tackled in Sweden, in both the short and the long term.

We surely have to take even stronger action to realise the full potential of energy efficiency. Implementing the EU Energy Efficiency Directive represents a good opportunity for us to do this. Over the years, Sweden has implemented several successful programmes, not least regarding efficiency measures in industry. We are now seeking ways to strengthen and broaden these programmes, in particular to support active demand-side services and new technological solutions.

In this regard, it is essential that the market continues to make investments in sustainable energy and infrastructure. In addition, consumers must have the opportunity to become more active on the market. By providing net metering and smart technological solutions, more and more consumers will have the ability to react to correct price signals.

Correct price signals are also a way of ensuring that effective investments are made, both from a consumer and producer perspective. The EU must avoid introducing measures that distort the functioning of a competitive electricity market. In the worst case scenario, such decisions could lead to the emergence of isolated markets, which must be averted. Instead, all Member States must implement the legislation of the EU's third energy package.

Making transportation sustainable is truly a global challenge. In Sweden, transportation is the remaining sector that is most heavily dependent on fossil fuels. In order to tackle this challenge, we have adopted the ambition of making our vehicle fleet free from fossil fuels by 2030.

The path forward
The EU 2020 targets have been extremely vital to the strong developments achieved in the field of energy in recent years, in our own country and in the EU.

In its Energy Roadmap, the European Commission describes energy efficiency and renewable energy as 'no regret' options if we are to have any chance of limiting global warming to two degrees Celcius. To me, it is perfectly clear that both renewable energy and energy efficiency will have to increase significantly by 2030. To drive this development, the EU really does need new, ambitous commitments, in line with our climate objectives, for both renewable energy and energy efficiency.