The Energy Transition in Sweden

Summary:

This study analyses the evolutions of Sweden's energy choices, including in terms of nuclear power policy, carbon tax and renewable energies development. Considered as one of the most outstanding example of successful energy transition, Sweden might well face difficulties similar to those of other European countries in the near future.

Sweden has the distinction of having started several major changes to its energy supply at an early stage. The country has no fossil reserves, and so was importing increasing volumes of oil products in the years following World War II. Yet it rapidly perceived the geopolitical risks generated by such oil dependency, and so developed its nuclear capacity, enabling it to reduce quickly the role of oil in its economy after the shocks of the 1970s.

Sweden has also managed to exploit its natural resources. Until the 2000s, hydropower was able to enter the market without public assistance. By contrast, wood could not have gained its current market share without a policy combining public aid for investment and penalties for competing energies. The severe economic crisis which hit the country between 1991 and 1993 led such penalties being converted into taxes, notably a tax on CO2 emissions that came into force in 1991. This helped Sweden reconstruct its tax system, to finance its social model. The challenge highlighted the country's ability to generate consensus policy guidelines.

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