Response to interpellation 2023/24:202 on structural problems for wind power

Energi- och näringsministern Ebba Busch (KD)

Mr. Speaker! One of my favorite questions! And Elsa Widding has asked four questions, so I suspect there will be a number of follow-up questions.

The first question concerns what proportion of the energy mix I consider it realistic that wind power can constitute in the Swedish electricity system. The second question is whether I have initiated any analysis of how large an increase in fossil power the planned wind power expansion will entail, and how much our carbon dioxide emissions will increase as a result of this expansion, and if I in such cases can account for the result of such an analysis. The third question is how I view the utility of wind power versus the risks and costs for Swedish taxpayers given wind power's structural problems, and if I intend to take any measures on this account. The fourth question is whether I have taken the initiative for an analysis of how the willingness to build nuclear power is affected by an increasing share of wind power in the Swedish electricity system.

New electricity production from all fossil-free power sources and a more robust and more secure electricity system are needed to meet the climate goals and enable the green transition. An increased share of wind power does, however, pose challenges for the electricity system. Since wind power only produces electricity when it is blowing, predictable electricity production is needed to ensure that electricity can be delivered during all hours of the year.

It is not possible to state a figure for how much wind power an electricity system "can handle". The system's ability to manage intermittent power production also depends on the level of predictable power production, grid capacity, and what type of electricity consumption is added to the electricity system, and it is the electricity system's overall construction as well as wind power's own technological development that determines how much wind can be connected and utilized. As you understand, there are many factors.

Wind power is being expanded today on market terms, and the interest in building wind power is still great. Since we have a deregulated electricity market, it is primarily market economic incentives that determine where the expansion takes place. Wind power built after January 1, 2022, receives no economic support at all, and wind power completed before then received support through the market-based electricity certificate system. The Government is now working to ensure that all types of power have comparable rules of the game on the electricity market, for example by removing the power tax as well as the energy and carbon tax for combined heat and power within the EU ETS.

Mr. Speaker! Elsa Widding has also asked whether I have initiated any analysis of the connection between increased fossil power and planned expansion of wind power. I would like to broaden the perspective somewhat. Sweden today has a virtually fossil-free production of electricity. In the longer term, increased fossil-free electricity production is needed so that electricity can replace fossil fuels in other sectors such as the iron and steel industry. There are several analyses that are relevant, for example Svenska kraftnät's long-term market analysis which partially describes this. But I do not rule out that more and more targeted analyses need to be carried out in the area. Therefore, the government has invested in expanded energy planning at our agencies.

Variable electricity production, such as wind power, however, entails several new problems regarding both operational security and adequacy. Continued expansion of wind power therefore requires an increase in other fossil-free electricity production and flexibility to ensure a secure supply system.

Sweden's electricity system is facing an expansive phase. The Government is working broadly to establish long-term rules for delivery and security of supply. To clarify the direction for energy policy and the development of the energy system, the Government intends to present an energy policy direction proposition that includes a planning goal and a security of supply goal for the electricity system. And that work, in turn, will require several tools. The Government is therefore working purposefully also with tools concerning, for example, a developed electricity market, regulatory oversight, energy planning at local and regional levels, as well as a roadmap for new nuclear power.

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Elsa Widding (-)

Mr. Speaker! I thank the Minister for Energy and Industry for the answer.

What is the government's primary priority must go, says the minister. Perhaps, but hardly without importing natural gas on a large scale. Either you make hydrogen from the natural gas or you reduce with the natural gas instead of the hydrogen. Then it becomes brown steel. Such things are already being produced in the world.

Less carbon dioxide is obviously better than coal and charcoal, but it will not be fossil-free. Is it worth the taxpayers' money and all the risks that the country is exposed to?

The analyses of power adequacy in Sweden show that an increased electricity consumption without significant volumes and flexibility in the power system can pose great risks of power shortages as early as 2035, not least when the increased electricity consumption is combined with a large expansion of weather-dependent electricity production.

The conclusion that no one dares to talk about, which I have already mentioned, is that more is needed, and more will be needed, fossil power to help the system. It may sound alarming, or even unreasonable, but it is actually not so if one sits down and does some calculations. Opening up for fossil electricity will not result in particularly large carbon emissions because that production is only needed when consumption is high or the weather-dependent power produces little.

According to the Energy Agency's assessment, an additional 300-500 megawatts can be made available during cold winter days when electricity prices are high. Technically, even 1,000-1,500 decommissioned fossil power plants in the SE3 and SE4 areas could be put into use within the same timeframe. Just as I mentioned earlier, a bridging policy was needed until we have obtained enough new fossil-free electricity production. I definitely think that a restart of Stenungsund should be considered.

Last Monday, Sweden net imported 1,371 megawatts, and they came from Poland and Germany. The emissions then increase dramatically. If Sweden burns oil in Stenungsund or Karlshamn, there will be a smaller amount of global emissions. That is how we must begin to think. It is obvious because coal is worse than oil. Furthermore, we avoid transmission losses, and we also add the necessary inertia in the system.

It is therefore really stupid to import coal power when there are untapped oil-driven resources in Sweden.

Wind power is being expanded today on market-based grounds, and the interest in building wind power remains great, says the minister. Wind power investments are associated with extremely high risk in combination with low profitability, which I raised with the Minister of Finance the other day. I do not think, however, that she really understood.

Approximately 1,000 of Sweden's 5,000 power plants are part of companies that are close to bankruptcy - in any case, they are doing very poorly. We now see large gaps between the offered costs for wind power and the actual costs for investment, operation and maintenance, capacity factors, lifespan and decommissioning. Furthermore, the costs of wind power are constantly increasing. We are in a situation where wind power is bleeding both in Sweden and abroad.

The Minister says that the interest is still great, and that is true. In the next speech, I will explain why the interest is great.

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Energi- och näringsministern Ebba Busch (KD)

Mr. Speaker! This interpellation covers many issues, to say the least. I want to begin by emphasizing that we are now trying to conduct an energy policy that puts Sweden's population at the center. For the first time in decades, we have now presented a policy concerning the electricity system and its security of supply. I may bear the title of Energy Minister, but I have deliberately—at least during this period—chosen not to have Vattenfall in my backyard precisely because I want to be able to take responsibility for the entirety of the electricity system. We have chosen to put just security of supply in focus.

I think one can take Öresundsverket as a concrete example. Since the government mandate on December 22 last year, we have systematically focused on strengthened security of supply. It is very true that the transmission capacity in a country as large and elongated as Sweden is affected quite dramatically if one does not have enough base power in the system. In a rather vulnerable position, we have had a need to be able to increase the transmission capacity by adding power production in different parts, in several cases with Karlshamnsverket or other plants, for example Heleneholmsverket, Ryaverket and Öresundsverket. Some have been used actively; some we have been able to use more as backup in the system to be able to increase the transmission capacity in difficult situations.

What has happened, partly as a result of a massive expansion of weather-dependent power production and partly due to Russia's fearsome war of invasion in Ukraine, is that we have seen enormous fluctuations in electricity prices. This makes it difficult for those looking to make heavier investments in wind power or nuclear power to know which price they should calculate on. One day we have negative prices, the next day we have very high electricity prices.

This volatility is a problem in itself. Many companies - and even households - have said that they could consider a somewhat higher price for electricity as long as they know roughly within what range the price lies, so that they dare to commit to their investments or commit as a family. It could be about daring to buy a villa or daring to make a purchase because one knows what the costs will look like.

Overall, this means it is not a question of whether more nuclear power is needed if one wants to push forward with more weather-dependent power production and more wind. From that perspective, they go together. One can run the electricity system on only nuclear power, but in the current situation, it is not technically possible to run it on only wind power – it would become far too unstable.

In addition to this, I want to emphasize that the government is also working to ensure that existing production remains; SVK's agreement with Öresundsverket and the reassessment of hydropower are examples of this. We continue the work in the same direction.

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Elsa Widding (-)

Mr. Speaker! I would like to say that I am happy to help think forward, but as I have said, I am unaffiliated.

Wind and nuclear power do not go together. This is a big problem. I can try to explain this here and now.

Just as the minister said, it becomes very volatile with the wind. Nuclear power has high fixed costs. Nuclear power must run as base load – one must run 7,500 or 8,000 hours per year. It is this that defines base load.

Today we have 20 percent of the production mix. If one has even more, it becomes a big problem. Why? Yes, because in the summer we have a peak of around 14,000 megawatts. We have 5,000 megawatts of water that just flows past. If we then have very much wind, the nuclear power must regulate down, and then it cannot run its hours. Then it becomes unprofitable, because it has high fixed costs that it must get coverage for. That is why no one wants to invest in nuclear power.

One must decide. Which system does one want? Spain, for example, has phased out coal, which is great, and has gas and wind power instead. It works well, because wind power must have something that is fast-regulated. We have water. However, the wind also strains the water, because one must regulate up and down so very much all the time. We must move away from that.

If one wants to expand nuclear power, which the government is exemplary in struggling to achieve, it is great if the wind power that is operated today can be phased out. It only runs for about 15 years, so it will be perfect. Then we can have a transitional solution by running a little fossil until we get the nuclear power in, because that is the only way. I am very sorry, but it will not work in any other way. This is exactly what all reports from Svenska kraftnät show.

The Minister said that the interest in wind power is great. The reasons for this are primarily cheap loans, subsidies, and tax arrangements. The result has been an industry that continues to grow, just as the Minister said, even though there are no profits to be made. Money is instead made through a combination of interest spinning, loss deductions, creative tax arrangements, and all kinds of financial engineering from ownership abroad. I submitted a written question to the Minister for Finance as to why these companies do not pay income tax in Sweden.

Even with today's levels - 20 percent of the production mix - wind cannibalizes the other types of energy, as I mentioned regarding nuclear power, the reliability of the power system, and itself. When it blows a lot, the price goes down, and then you earn nothing. Then it becomes very problematic.

I actually think that the government must take this to heart and try to understand the meaning of what Svenska kraftnät is saying. Fewer and fewer believe that Sweden will be able to meet the future electricity demand, especially with such a low price for electricity as the calculations for the so-called green investments in the north actually require.

Speaking of Österlens Kraft, I can mention that it is not only a problem for the bakeries. Österlens Kraft does not connect any more solar power, for example. It is not possible; there is no room in the grid for this.

I understand that there is a theoretical reality that one must abide by as a politician, but it is very important to really try to understand what is possible to do. It is also important to keep in mind that it is not the end of the world if we do not succeed with this. It will of course work, but one must take it at the right pace and perhaps try to get the nuclear power in first and then push on with the goals.

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Energi- och näringsministern Ebba Busch (KD)

Mr. Speaker! In order to try to respond to what was requested here, I want to say that I am not worried about 2045. The great challenge concerns what one can deliver for the reality of 2025 or 2030. This challenge is much tougher in a situation where we, as said, have quite few applications for connections in southern Sweden, because it is known that it many times simply does not work.

What we are doing now, Mr. Speaker, is to change the energy policy from focusing on individual types of power to focusing on what characteristics the system needs and what characteristics in the electricity, or rather in the power production, are needed so that we can deliver enough electricity where it is needed and when it is needed at sensible prices both for households and for companies. This completely changes the rules of the game.

I agree that it has been a poor situation to ask nuclear power to be the one to regulate up and regulate down, and it does not go as quickly as with hydropower for the wind power that has come and gone. Nuclear power has been the steady relationship and the steady marriage while the wind power has come and gone a bit as she has wanted, and nuclear power has not been compensated for that.

It is not about a specific type of power that we are distributing, but it is about it having to be technology-neutral. They have different characteristics. Wind power has gone from being a child in terms of technology to becoming a teenager in terms of technology, and I said it straight out at one of Europe's largest wind power conferences that it is time for wind power to grow up. Still, wind power cannot deliver ancillary services in the form of black-start or frequency restoration in the way we need in a very vulnerable position. There are those who say that wind power will be able to do it. Go ahead, go in that direction then, because that is what our electricity system needs to be able to fulfill our ultimate goal: enough electricity where it is needed when it is needed at sensible prices.

I agree that it is problematic if one thinks that nuclear power should be the regulating power, especially without compensation. It is also a problem when water levels suddenly go up significantly and down significantly because it affects the environment in our watercourses dramatically. Therefore, we need to have a balance in the energy mix - and it is urgent. It is urgent to realize the roadmap for nuclear power because it affects so many other parts, and if this, I perceive that we are quite in agreement.

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Elsa Widding (-)

Mr. Speaker! I thank the Minister and remind her that she can feel quite calm because it is not she who has caused the mess in our country. It is therefore possible to be a bit tough. It was the shutdown of the nuclear reactors that caused such a mess, largely because we are losing so much momentum.

I was involved in writing the energy agreement in 2009 with Maud Olofsson, and it was then that it was decided that one should have an energy system with three legs instead of two. It was believed that a stool with three legs would be more stable than a stool with two legs. Therefore, one started with wind power, which was very dull for Sweden.

It is important that the government decides what type of power system it wants to create. Wind power in combination with a fossil power source works well, but then one can probably forget about nuclear power. Wind and gas also go well together. When a long-term system is in place and functioning, one can take electrification to the next step.

Nuclear power is important for Sweden but must be given a chance to run as base load, that is, around 8,000 hours, as we have discussed.

As I mentioned, Entsoe recently released its winter forecast, and a small map shows that Europe has two areas where the maximum theoretical electricity production capacity is less than 100 percent of the electricity consumption, and those are two areas in Sweden.

Constantly new examples are given of how difficult it is to build a robust electricity system based on intermittent electricity production. In the short term, the electricity shortage is a major problem from a socio-economic perspective. Investment decisions are postponed, or investments are made in other countries, which can be devastating for Sweden in the long term. We must take this seriously.

If one were to conduct a scenario analysis over, for example, 50 years, it would certainly show that some higher fossil emissions from electricity production today will result in lower fossil emissions from other sectors for a long time to come.

I believe there are much smarter ways to solve this.

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Energi- och näringsministern Ebba Busch (KD)

Mr. Speaker! Elsa Widding and I have now had the opportunity to dive a bit deeper into two interpellation debates. I will not go into details in my concluding remarks, but the entire energy proposal that we have discussed with all parliamentary parties and which we hope to place on the Riksdag's table this winter aims to redirect the system from what Elsa Widding broadly demands.

The images and analyses of how things look in Europe that Entsoe shows in its report, the government actually already used last autumn, and then many were shocked to ask if it really is true that southern Sweden stands out in all of Europe regarding vulnerability and shortage? The answer is yes, and that is why we need to change the policy.

But it is not possible to conjure it out of thin air. It will take time and require long-term, persistent work. But if we manage this, we can also deliver on what we are tasked to do: reasonable rules of the game that provide enough electricity where it is needed when it is needed at sensible prices for both households and companies.

The interpellations debate was hereby concluded.

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