Renewable electricity in Sweden: an analysis of policy and regulations

This study aims to analyse the developments in renewable energy policy making in Sweden. It assesses the energy policy context, changes in the choice of policy instruments, and provides explanations behind policy successes and failures. Swedish renewable energy policy has been developing in a context of uncertainty around nuclear issues. While there has been made a political decision to replace nuclear power with renewables, there is a lack of consensus about the pace of phasing out nuclear power due to perceived negative impacts on industrial competitiveness. Such uncertainty had an effect in the formulation of renewable energy policy. Biomass and wind power are the main options for renewable electricity production. Throughout 1990s, the combined effect of different policy instruments has stimulated the growth of these two renewable sources. Yet, both biomass and wind power are still a minor contributor in the total electricity generation. Lack of strong government commitment due to uncertainty around nuclear issues is a crucial factor. Short-term subsidies have been preferred rather than open-ended subsidy mechanisms, causing intervals without subsidies and interruption to development. Other factors are such as lack of incentives from the major electricity companies and administrative obstacles. The taxation system has been successful in fostering an expansion of biomass for heating but hindered a similar development in the electricity sector. The quota system adopted in 2003 is expected to create high demand on biomass but does not favour wind power. The renewable energy aims are unlikely to be changed. Yet, the future development of renewable energy policies especially for high-cost technologies will again depend strongly on nuclear policies, which are still unstable and might affect the pace of renewable energy development.