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FORECASTING SWEDISH ENERGY SOURCES AND CONSUMPTION
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CONTENTS:
BACKGROUND…………………………………………………. 3
PART ONE:……………………………………………………… 4
Energy in Sweden Past &
Present
(With some predictions for
future scenarios)
Oil…………………………………………………………. 5
Coal……………………………………………………….. 7
Biofuels…………………………………………………… 8
District Heat………………………………………………. 9
Hydropower………………………………………………. 10
Nuclear……………………………………………………. 11
Imports vs. Exports……………………………………….. 12
PART TWO:
Forecasting Swedish energy
consumption for 2020…………… 13
1999 energy consumption in Sweden…………………….. 13
2020 energy consumption in Sweden…………………….. 13
Method……………………………………………. 13
Population………………………………………… 14
Shifts within the industrial sector………………… 15
Efficiency in Industry…………………………….. 15
Efficiency in Residential/Service………………… 16
Efficiency in Transportation……………………… 16
Overall Economic Growth……………………….. 17
Taxation………………………………………….. 18
Conclusion……………………………………….. 18
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FORECASTING SWEDISH ENERGY SOURCES AND CONSUMPTION
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Sweden is a European nation known for being a leading country in Information Technology. Stockholm, the capital, is well known for their advances in wireless communication. A member of the European Union (EU) since 1995, Sweden has forest products as one of its main exports.
Today, Sweden’s energy market is
highly influenced by environmental issues as the country has been pushing
towards a more sustainable energy and economy. This is reflected in the energy
tax policies approved by the Riksdag (parliament).[1]
PART ONE:
Energy in Sweden: past &
present
(With some predictions for
future scenarios)
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
Oil
The oil crisis of the 1970s set in motion a decline in Swedish oil consumption. Since 1970 and up to 2000, Sweden’s dependence on oil has decreased by about 40%.[2] This is directly related to the increase in nuclear power generation in that period, where there was also an increase in the use of biofuels and energy conservation measures. Despite these relative shifts, oil still represents a dominant energy supply in Sweden.
In the past decade, special attention has been paid to the reduction of carbon dioxide emissions and other chemicals. Subsequently, we have seen tighter standards for generating plants, installation of catalytic converter in cars, use of financial incentives to limit industrial emissions, no use of leaded fuel since 1994, and, most importantly, energy taxes have all had a large influence on the reduction of dependence on fossil fuels and oil-derived products. We expect reduction of fossil fuels in Sweden to continue through 2020.[3]
The Swedish Institute. “Energy and Energy Policy
in Sweden.” February 2001.
Note that figures have been rounded off.
Natural Gas
Natural gas is relatively new as it
was introduced commercially in Sweden in 1985; its use has been gradually increasing
ever since.[4] Natural gas
is considered a potential alternative for nuclear power, although the
transition towards natural gas would mean higher levels of carbon dioxide
emissions.[5]
So far, natural gas has been able to replace oil in industry and in power and
heating plants. While efforts have been made by the government to present
natural gas as a more competitive option (e.g. a Natural Gas Act in 2000),[6]
it is still uncertain how it will develop in the market in the near future. In
the past thirty years, although natural gas represents a small portion of the
total Swedish energy supply, it has been showing a steady increase.
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
Coal
Coal imports in Sweden were important until 1950s, when oil invaded the energy market. Later, with the 1970s oil crisis, coal, once again became an attractive energy source. As the concern for environmental standards appeared during the mid-1980s, coal lost popularity due to taxation implemented on this very dirty fuel. We foresee coal being phased out of the Swedish energy mix through 2020, especially considering economical incentives against it applied by the environmentalist government.[7]
The Swedish Institute. “Energy and Energy Policy
in Sweden.” February 2001.
Note that figures have been rounded off.
Biofuels
Since the 1970s oil crisis,
Biofuels, Peat etc. use increased, with by-products of the forest industries
used as the main fuels. That is the case, for example, of digester liquor,
which is the most commonly used biofuel and is the bi-product of pulp
production. In the 1990s biofuels use increased, which is logical considering
that Sweden has the second highest Peatlands area in Western Europe (behind
Finland) as well as the second largest forest in Europe (after Russia).[8]
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
District Heat
These collective heating systems accounted for 44TWh during 1999.[9] This factor facilitated Sweden’s reduced dependence on oil, as in 1980 oil accounted for a 90%, share that today is consumed by CHP’s (combined heat and power production) and district heating plants.[10] These types of changes can be explained by looking at modifications in energy and environmental taxation, as they were implemented by the Riksdag in 1994, wherein the tax of co-generated fuels CHP’s was cut in half. With this type of incentive, district heating should keep increase through 2020.
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
Hydropower
Sweden is known for having an electrically intensive industrial sector mainly supplied by hydropower. Nonetheless, the expansion of the hydroelectric sector decreased considerably in Sweden during the 1950’s. This was particularly due to the fact that most of the rivers that could be exploited at a low cost were already producing electricity.[11] The future of new hydropower facilities is uncertain: the Government set, in a 1998 environmental code in favor of nature conservancy, statutes protecting the main (and potentially usable in term of hydroelectricity) rivers of the country. On average, the Swedish hydropower industry currently generates 64 TWh/year. But the amount of electricity generated by these plants is highly influenced by the abundance of water (precipitation) in a given year.[12]
The Swedish Institute. “Energy
and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
Nuclear
Per capita, Sweden consumes more nuclear energy than any country in the world.[13] Nuclear, along with hydropower, is responsible for most of the electricity generated in Sweden (together they produced 93% of the electricity in 1999).[14] The expansion of the nuclear industry started with the construction of Sweden’s first reactor in 1972. Since then, twelve more reactors have been constructed. No reactors have been constructed since 1985. From 1972 to 1985 the nuclear power industry grew vigorously, but since that period levels of Swedish nuclear power generation have stabilized (at around 208 TWh).[15] In 1997 the Riksdag (parliament) closed one of the oldest reactors and launched a program for the development of ecologically and economically sustainable energies. The future of Nuclear power through 2020 seems to be quite uncertain and dependent on factors such as current waste management and security.[16]
Current low and intermediate level radioactive waste are stored in central Sweden, and different options are being considered for high level-type wastes, with the most-likely scenario being the encapsulation of waste in copper and then depositing it in the bedrock some 500 meters underground. At this time, in order to pay the costs of waste management, there is a cost added to the electricity generated by nuclear facilities.[17] For the near future, we would expect nuclear facilities to remain active and for no new facilities to be developed, therefore roughly maintaining the current levels of electricity generation.
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
Imports vs. Exports
The Swedish Institute.
“Energy and Energy Policy in Sweden.” February 2001.
Note that figures have been
rounded off.
PART TWO:
Forecasting Swedish energy
consumption for 2020
1999 energy consumption in Sweden[18]
Industry: 150 TWh
Residential/service: 154 TWh
Transportation: 91 TWh
TOTAL: 395
TWh
2020 energy consumption in Sweden
Method
Total Swedish consumption for the year 2020 will be approximated via this formula:
E2020 = [(ΔP-1)(ρ)+1] [(I)(i)(Δθi) + (r)(Δθr) + (t)(Δθt)] [S] [T]
Where E2020 is the total energy consumed by Sweden in the year 2020 in TWh.
Where ΔP is the ratio of Sweden's expected 2020 population to its approximate 1999 population.
Where ρ is a constant, expressing the ratio of energy consumption to population growth.
Where I is the shift from heavy industry to light/service industries in Sweden through 2020.
Where i is Sweden's total 1999 industrial energy consumption (TWh), and Δθi is change in Swedish industrial efficiency through 2020.
Where r is Sweden's total 1999 residential/commercial energy consumption (TWh), and Δθr change in Swedish residential/commercial energy efficiency through 2020.
Where t is Sweden's total 1999 transportation energy consumption (TWh), and Δθt is change in Swedish transportation energy efficiency through 2020.
Where S is the overall growth of the Swedish economy through 2020.
And where T is the factor by which tax policy will affect total energy consumption.
Population
The estimated population of Sweden in 2002 was 8,876,744,
with an estimated annual growth rate of 0.02%[19]
Holding this growth rate constant and compounding it for the next 18 years gives a 2020 population of 8,908,754 — an addition of 32,010 persons; a ratio of 1.0036.
We will approximate Sweden's 1999 population to its 2002-estimated population.
Therefore, ΔP = 1.0036
Population growth and energy consumption are not arithmetically conjoined; rather, the relationship is the function of a constant. For instance, a 10% increase in population does not imply a 10% increase in energy consumption; rather, the increase in energy consumption is some fraction of the increase in population.
For the relatively small increase in Sweden's population by 2020, this fraction probably ranges from 0.2 to 0.6. We will average these approximations and put the fraction at 0.4.
Therefore, ρ = 0.4
Shifts within the industrial sector
Throughout the later half of the 20th century, Sweden’s industrial base underwent a shift. Economy that was based on energy-intense, heavy industry (e.g. steel, wood pulp) reallocated its focus to lighter industry (e.g. telecommunications, pharmaceuticals); and even the “heavy” industries began streamlining and altering emphasis from basic extraction and fabrication (smelting, milling) to higher value-added endeavors.[20] This fundamental shift will continue in Sweden through 2020, as its well-educated workforce puts knowledge and technology[21] at the forefront of national resources. Consequently, less raw energy will be needed to propel Swedish GDP.
Overall, we approximate reduction in energy consumption due to this shift at 20% for 2020 compared to 1999 levels.
Therefore, I = 0.8
Efficiency in Industry
Sweden’s industries (whether they be traditional/heavy or modern/light) will become more energy efficient between now and 2020. This increase in efficiency will decrease the total energy otherwise consumed within Sweden’s future industrial sector.
In the past ten years, energy efficiency in industry has remained somewhat constant. Some industries have become more efficient, but those changes are offset by industries that have become more energy intensive.[22] It would be unreasonable to expect efficiency in Swedish industry to remain anything but consistent through 2020.
Therefore, Dqi = .99
Efficiency in Residential/Service
Efficiency in Transportation
Overall Economic Growth
Growth in Sweden’s economic activities between now and 2020 will lead to a fundamental increase in Sweden’s overall energy consumption. Sweden dealt with recession in the early 1990s, but has since enjoyed a phase of robust economic growth.[25]
GDP Growth Rates[26]:
1991: -1.1 %
1992: -1.7 %
1993: -1.8 %
1994: 4.1 %
1995: 3.7 %
1996: 1.1 %
1997: 2.1 %
1998: 3.6 %
1999: 4.1 %
2000: 3.6 %
Average 1990-2000: 1.7 %
Average 1998-2000: 3.8 %
Growth is expected to continue in the future.[27]
We will set economic growth through 2020, S, at both 1.7%/year (low growth) and 3.8%/year (high growth).
Compounded from 1999 to 2020, this makes the 2020 Swedish economy 42% bigger in the low growth scenario, and 119% bigger in the high growth scenario.
Therefore, Slow = 1.42 & Shigh = 2.19
Taxation
Swedish tax policy, especially tax policy that specifically targets energy consumption, will affect change in Swedish energy consumption between now and 2020. These taxes result, in part, from the Riksdag’s (Parliament’s) compliance with the Kyoto protocol, as well as other public environmental and sustainability objectives.[28]
While these government policies are, to a large extent, accounted for in S, we approximate:
T = 0.9
Conclusion
E2020 = [(ΔP-1)(ρ)+1] [(I)(i)(Δθi) + (r)(Δθr) + (t)(Δθt)] [S] [T]
With Slow:
E2020 = [(1.0036
1)(0.4)+1] [(0.8)(150TWh)(0.99) + (154TWh)(0.89)
+ (91TWh)(0.77)]
[1.42] [0.9]
= [1.00144] [325.93]
[1.42] [0.9]
= 417 TWh (105.6%
of 1999 levels)
With Shigh:
E2020 = [(1.0036
1)(0.4)+1] [(0.8)(150TWh)(0.99) + (154TWh)(0.89)
+ (91TWh)(0.77)]
[2.19] [0.9]
= [1.00144] [325.93]
[2.19] [0.9]
= 643 TWh (162.8%
of 1999 levels)
With any S:
E2020 = 293.8S TWh
Conclusion, cont’d
While Sweden’s population will remain fairly constant through 2020, it overall economic output will swell, perhaps a two-fold increase as compared to 1999 levels. Increased energy demand will be tempered, however by transitions within industry to less energy-hungry endeavors, as well as increased efficiencies in industry, residential/service, and transportation; energy taxes—enacted by Swedish government—will also lessen overall energy demand. Given these various (and somewhat unpredictable) inputs, we estimate that Sweden’s appetite for energy will range from 417 to 643 TWh.
Will Sweden’s energy supply accommodate this increased demand?
Currently, nuclear power
(along with hydropower and oil) represents an important share of Sweden’s
energy consumption. No new nuclear facilities have been built in recent years
and there seems to be no plans to further development this sector. We believe is important for Sweden to
address what fuel is going to replace the void left by nuclear as it fades out.
There is concern that oil
will replace nuclear capabilities; this would represent a threat to Sweden’s
greenhouse gas emission target.
Natural gas, however,
along with cleaner-burning biofuels and innovative techniques such as district
heating are promising energy sources for Sweden’s future.