Annual Report 1999. Electric power in Sweden

Barsebaeck 1 was closed on 30 November 1999. Barsebaeck's output of approximately 4 TWh per year will primarily be replaced by imports from coal-fired plants in Denmark and Germany. During the year, the closure of Swedish fossil-fired condensing power stations continued. With that, over 3,000 MW of peak-load power has been shut down during recent years. Consequently, situations entailing shortages of power can arise. On the deregulated electricity market, it is only the system operators that have a satisfactory overview of the overall electricity balance. The Swedish Power Association has thus lobbied the government as regards the need to elucidate Svenska Kraftnaet's responsibility. In a governmental decision from December, Svenska Kraftnaet was given the task of, among other things, monitoring the available capacity during peak loads and developing market instruments that can contribute to safeguarding the availability of power during peak loads. Svenska Kraftnaet has acquired gas turbines with a combined output power of 400 MW from Vattenfall. In order to cover the remaining requirement for rapid disruption reserves, Svenska Kraftnaet also has agreements with several power producers regarding a further 800 MW of gas turbine capacity. One further possibility lies in agreements with industry regarding the disconnection of consumption during times of peak loading. On 1 January 2000, the nuclear power tax was increased by SEK 0.005 per kWh to SEK 0.027 per kWh. This means that the nuclear power companies pay approximately SEK 1,800 MSEK per year in fiscal taxation on their nuclear power generation. The tax on electrical energy, paid by the consumer, was raised by SEK 0.011 to SEK 0.162 per kWh. The tax on diesel fuel was increased at the same time by SEK 0.25 per litre. In addition, a special network fee of SEK 0.002 per kWh came into existence in order to finance small-scale electricity generation, following removal of the obligation-to-receive system. The Swedish Power Association is of the opinion that the increase in production taxes on nuclear power is completely misdirected. Sweden is the only EU country to have production taxes on electricity. Uncertainty and the lack of stability in the present taxation system will entail considerable difficulties both for electricity-intensive industry and for the power companies vis-a-vis long-term investment in Sweden. In 1999, overall consumption in the country fell by 0.3 TWh to 142.9 TWh, compared with last year. The decrease is explained by the fact that the autumn was very warm. Inflow into the major rivers was somewhat higher than normal enabling 70.4 TWh to be generated by the hydropower plants. This is 6 TWh more than during a normal year. Nuclear power accounted for 70.2 TWh, equal to the previous year. Additionally, combined heat and power and condensing plants accounted for 9.5 TWh, almost half of which using biofuels. Wind power continues to increase. At year-end, there were about 480 wind power plants, and the annual production was 0.4 TWh. Overall electricity production in the country was 150.5 TWh, a decrease of 3.4 TWh, or just under three percent. Exports amounted to 16.1 TWh and imports to 8.5 TWh. The average price for the year on the Nordic power exchange's spot market (Sector Sweden) was SEK 0.119 per kWh. The low price is explained by the mild weather and a plentiful supply of water in the Nordic reservoirs. On 1 November, the electricity market was changed in such a way that small consumers, with a fuse rating of up to 200 amps, were also able to take part. Parliament's decision to remove the requirement for continually registering hourly meters was of crucial importance. With this measure, the electricity market was also opened up to household customers. Hourly metering was replaced by profile settlement. Customers were offered fixed prices that could be considerably lower than previously. Flexible prices were on offer, e.g. linked to the power exchange's spot price, with or without a ceiling price, as well as mixtures of fixed and flexible prices. Campaigns and electricity agreements combined with other services were also common. Landfill taxes and other environmental fees, as well as a future ban on dumping combustible refuse, will probably cause the combustion of refuse to increase. Refuse-based electricity may thus become more important as a development sector. New hydropower can, given the most beneficial prerequisites, provide relatively low generating costs. Renewable electricity based on biofuels and wind power needs support in order to be able to compete with fossil fuels. Wind power costs are expected to fall considerably due to continued technical development and rationalisation. In April 1999, the government appointed the Director General of Customs and Excise as a one-man commission of inquiry into the possibilities of using the flexible mechanisms of the Kyoto protocol. The brief of the inquiry is to sketch out a system for how the three flexible mechanisms: Trading in Emission Rights, Joint Implementation and the Mechanism for Clean Development could be used to enable Sweden, in a cost-effective way, to achieve the emission goals of the Kyoto protocol. Nordel is an organisation for collaboration between the system-operating network companies of the Nordic area. The primary objective is to develop an efficient Nordic electricity market. The organisation is also the forum for technical collaboration, focusing on the operation and development of the electricity system. Baltrel is an organisation with the task of creating the prerequisites for an open electricity market around the Baltic Sea. Seventeen companies from eleven countries take part in this collaboration. Sweden's power industry is represented by the Swedish Power Association. The EU has approved funding for studies to, among other things, look into the possibilities of joint implementation