Delivery reliability missing in the Energy Commission’s report

Wednesday 11 January 2017

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On 9 January the head of the secretariat for the Energy Commission, Bo Diczfalusy, handed over the Commission’s report on joint action for the energy system of the future (Kraftsamling för framtidens energi) to Sweden’s Minister for Energy Ibrahim Baylan.

The report contains 12 proposals and 30 assessments, and is based on an energy policy framework agreement reached by five political parties (S, M, MP, C and KD) on 10 June 2016. On that occasion IVA commented on the agreement as follows:

“I’m very happy that a broad-based energy policy agreement has now been reached,” said Björn O. Nilsson, President of IVA. “Now we need to turn the proposals into concrete action, and here IVA’s continuing work within the Electricity Crossroads project can provide valuable input.”

The goals now being proposed by the Energy Commission include the following:

  • 100 percent renewable electricity production by 2040. This is a goal rather than a stop date that prohibits nuclear power, nor does it involve the closure of nuclear power plants based on political decisions.
  • 50 percent more efficient energy use in Sweden by 2030 compared to 2005 (less energy intensity).

One important point of departure for the proposals is that Sweden is to have zero net emissions of greenhouse gases to the atmosphere no later than 2045 and reach negative emissions after that.

The Energy Commission is presenting a number of proposals and assessments to help in the process of achieving these goals. They include the following:

  • An extension and expansion of the energy certificate system by 18 TWh in new electricity certificates by 2030. An assessment of the possibility of improving the economic conditions for offshore wind power by getting rid of grid connection fees.
  • Gradual phase-out of the nuclear capacity tax over a two-year period starting in 2017. Keep in place the principles on planning for new nuclear reactors proposed by the Alliance government.
  • A reduction of the property tax on hydropower.

IVA and Electricity Crossroads support the proposals to remove the nuclear capacity tax and reduce the hydropower property tax.

Electricity Crossroads would in particular like to draw attention to the opportunities that exist to develop the current energy certificate system. In a reformed energy certificate system, predicable, baseload power should be prioritised. This is missing in today’s model. The system should be technology-neutral but address the importance of capacity.

IVA notes that the report contains no proposal on how to maintain today’s high level of delivery reliability. IVA will present concrete proposals on this during the spring.

The Energy Commission is also presenting proposals and assessments regarding a number of new studies, including on a new programme for energy efficiency improvement in energy-intensive industries and on how to remove obstacles to enable new efficient services to be developed and to have more active electricity customers. IVA is a strong proponent of the efficient use of energy and welcomes prioritising energy efficiency improvement. The potential for more efficient energy use has been addressed in a past IVA project.

In Europe and in Sweden there is broad discussion on which electricity market model to use in the future. According to the Energy Commission there is no reason, in a short-term perspective, to change the existing market model used by Sweden and the rest of the Nordic region. But it also states that it is reasonable to have a broad discussion over time on how the future electricity market should be organised.

“Net export is not an end it itself. It is more important for us to focus on refining our electricity system in Sweden with a focus on increased competitiveness,” says Jan Nordling, Project Director of Electricity Crossroads.

He also points out that there may be better alternatives:

“Sweden should actively invest in increasing the use of electricity for industrial development and to benefit the climate. We are also advocating expanding electricity use through electrification of the automotive sector.”

An implementation group is being formed, composed of representatives from the parties that concluded the framework agreement. The group will conduct a continuous follow-up process with respect to the agreement.

“The proposals and assessments presented by the Commission create a good foundation for our future energy policy. Now it is up to the government and parliament to make smart political decisions,” says secretariat head, Bo Diczfalusy.

 

The five alternatives, or paths, presented by Electricity Crossroads are:

 Path 1: Regard electricity as a facilitator for industrial development and to reduce climate impact.

Path 2: Create the right conditions for cost-effective development of the electricity system.

Path 3: Focus on environmental issues in addition to the climate.

Path 4: Set a goal for delivery reliability to maintain today’s high level.

Path 5: Strengthen cooperation with those around us.