Response to interpellation 2023/24:436 on the conditions for combined heat and power
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD considers that combined heat and power is a central part of the Swedish energy system that contributes with fossil-free heat, electricity production, and high energy efficiency 1. KD argues that combined heat and power is a predictable base power important for local power supply and electricity preparedness 2. KD argues that the government is well-coordinated in its investigations 2. KD considers that the use of biofuels in the Swedish energy system has increased during the last 40 years 3. KD wants to value system benefits more clearly for more stable prices and to make the electricity market less rigid 3. S considers that the government must act as many customers are affected by increased bills 4. S argues that the government is responsible for compensating consumers. S considers that the forest policy does not clearly show how the extraction of forest residues should be increased 4. S argues that the focus needs to be shifted from nuclear power and wind power to bioenergy 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! Finally: Isak From has asked me if I intend to take any initiatives to improve the conditions for bioenergy-based combined heat and power. It is an issue that is discussed far too little, but today it will be time for action.
Initially, I can state that the government and I share Isak From's assessment that combined heat and power and district heating constitute a central part of the Swedish energy system. In addition to contributing with an almost fossil-free heat and electricity production, combined heat and power often has a central role for the local power supply and contributes to high energy efficiency - one of the most important things one can achieve.
On 15 December 2023, the Swedish Energy Agency submitted its final report on the government mandate to develop a proposal for a strategy for a long-term sustainable development of the district heating and heating sector. Furthermore, the Energy Markets Inspectorate published a memorandum on 31 January 2024 with conclusions from the analysis the authority has conducted of the district heating market in the context of recent price increases.
Both authorities submit a number of proposals for measures aimed at improving the conditions for electricity and district heating, both for the customers and for the suppliers. The Government Offices are now analyzing the authorities' proposals, but it is unfortunately too early to say which measures may become relevant for the government to proceed with.
In addition, the government has decided that a special investigator shall analyze and propose how the Swedish electricity market can be developed and regulated to, among other things, ensure a high level of security of supply, create long-term planning conditions, and provide fossil-free power sources and flexible resources with market-based compensation for the benefits they contribute.
The government has also appointed an inquiry into a robust forest policy that views the forest as a resource for, among other things, the energy supply.
Power and district heating are also affected by total defense planning, as it entails increased requirements to strengthen preparedness within the heating sector. From a total defense perspective, it is important that power and district heating plants have the ability to maintain the heat supply as far as possible, even during high alert and in the event of war. Power heating also plays an important role for electricity preparedness and the possibility of so-called island operation, that is, delivering locally produced electricity within a geographically delimited power grid that can be operated without connection to the surrounding grid, this because, under the right conditions, it has the ability to start up electricity production without an external connection to the power grid, so-called black start, and can deliver controllable, predictable, and local electricity production.
To manage the climate transition, strengthen Sweden's competitiveness and reach net-zero emissions by 2045, Sweden needs to be electrified with fossil-free and, to a greater extent, also predictable electricity.
Isak From (S)
Madam Speaker! I thank you that the Minister for Energy and Industry was quick on the ball. I know that the Minister for Industry appreciates this debate. For the sake of the audience, we can mention that during recent years we have had quite a few debates about electricity prices, nuclear power and wind power. Therefore, it may be appropriate that we fill in the gaps with some combined heat and power.
The Minister for Energy and Industry mentions the sharply increased district heating prices, and that must be taken into account in this. All around the country, quite a few customers are receiving significantly higher bills. Solör, a company that has several facilities around the country, announces increases of over 30 percent in Falköping. In Västerbotten, Solör has a number of facilities where they announce increases of around 30 percent. It is clear that many of the municipal representatives who, a number of years ago, sold off combined heat and power plants and district heating plants think this will be difficult.
The investigations and proposals that the Minister refers to are expected, but the costs for consumers will come now. We must be clear that some of the cost increases are due to Russia's war of invasion in Ukraine. Europe's dependence on fossil energy also affects our energy system, and something that also affects it is that energy companies have imported wood and forest residues from Russia. This must not be done now, which is perfectly reasonable.
At the same time, we can observe, which I also mention in my interpellation, that the availability of grot – i.e., forest residues from the forest – could be utilized to a significantly greater extent than is currently occurring. This applies particularly because, for cost reasons, virtually no forest residues are extracted from northern Sweden. It has not been fully profitable due to long distances. Here, the entire government needs to act.
The Minister for Energy and Industry refers in his answer partly to the forestry inquiry that has been commissioned and which lies on the desk of Minister for Rural Affairs Kullgren, but when I read it, it appears more as a legal inquiry to resolve some of the contradictory laws that exist within Swedish and European forestry legislation and environmental legislation. It does not appear particularly well that the inquiry is to look at how the industry should saw more timber that could provide both planks and boards as well as sawdust, which can very well be burned. It also does not appear particularly well from the assignment that the inquiry is to look at how and to what extent the extraction of forest residues, i.e., slash, can be increased from more lands.
Such a debate perhaps belongs more on the desk of Minister for Rural Affairs Kullgren, but the availability of forest residues is of very great importance for combined heat and power's continued ability to deliver.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I want to start by digging a little bit into why combined heat and power is so important, once again. What is heard many times in the debate on energy issues and electricity in general is, namely, wind power and nuclear power, and sometimes there is someone who mentions the issue of hydropower and wind power at the same time. What is missed when one does not include combined heat and power in the discussion regarding the energy system is the following: Now that we have increased the focus on preparedness and security of supply after Russia's invasion of Ukraine, we need to get even more focus on ancillary services and the local power.
Combined heat and power contributes approximately 9 percent of the electricity produced in Sweden. Electricity production is often located at central locations in the power grid, and this makes a big difference where the power demand is greatest and there can often be a shortage of grid capacity. A distinction should be made here between combined heat and power and district heating, because district heating in turn contributes to relieving the power grid because it reduces the need for electricity for heating.
Madam Speaker! Isak From is correct regarding the fuel. The fuel used for Swedish combined heat and power consists largely of various forms of bio and waste fuels. The most common is biofuel in the form of so-called grot, which Isak From mentioned earlier. It is an abbreviation for branches and tops and refers to the part of the tree above the stump that remains when the trunk part has been removed. It is difficult to use this for so many other things, and we would like to see it used to a greater extent.
I also want to take this opportunity to emphasize that the efficiency of combined heat and power has been between 90 and 93 percent. Electricity needs to be produced where the need is greatest, and the independence from weather makes combined heat and power a predictable base load. It is an incredibly important part of our system.
Isak From mentions that the responsibility lies with several different ministers, but I would say that we are well-coordinated. We also see the need for all investigations that are currently underway or are on the government's desk to cooperate.
Isak From (S)
Madam Speaker! I share the Minister for Energy and Industry's view that this type of power has been and is very important, especially because it is predictable. It is possible to run hard in the morning when demand is high. Nevertheless, it is now very many households that are affected by very large costs, and we must be aware of that.
This is the entire government's responsibility. Large investments are now being made by a number of combined heat and power companies, not least along the Norrland coast, together with wind power. It is about being able to produce sustainable biofuels, i.e., e-methanol, while simultaneously producing district heating and electricity. These investments are large and costly, and it is of the utmost importance that the policy for the transition remains firm. Right now, we can see that something is wavering in a number of areas in the climate policy, and I hope that is not the case in this area.
Madam Speaker! Storm Hans hit the entire country. In northern Västerbotten, storm Hans felled approximately 1,000 cubic meters in a fairly square area.
I participated in an interpellation debate here in the chamber regarding the state's possibilities to introduce an exception regarding the logging notifications and whether the state and the Minister for Rural Affairs could consider any measures for the reindeer husbandry, as the reindeer husbandry specifically requested that the clear-cuts after the storm be cleared. Unfortunately, the Minister for Rural Affairs had no answers at all to my questions.
Now I know that, among other things, state-owned Sveaskog is working quite hard and intensively in the area to take care of as much debris and forest residues as possible, but this is also a collective mission. There is a demand from several different stakeholders when it comes to utilizing more forest residues and debris from the lands. Not least in the area I come from, the reindeer husbandry is also affected if this is not taken advantage of. It should be possible to see that we have a win-win situation here. In other areas, capacity may be needed to transport this to the nearest combined heat and power plant.
The Minister for Energy and Business may well give an answer to all those consumers who are now affected by extreme cost increases as a result of global factors for which they are completely innocent. Who is going to compensate them for their greatly increased costs? District heating costs, as stated, are rising by over 30 percent in very many places around the country. Joint efforts from politics are needed here.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! There are many reasons why the costs for district heating have gone up. I want to emphasize that there is a difference between district heating and combined heat and power. It is worth noting, as I touched upon earlier, that the efficiency and competitiveness of combined heat and power depend on being able to sell both electricity and heat. This means that there must be a district heating network or an industrial process that can receive the heat that is produced. Power production is therefore dimensioned to a very high degree according to the heat demand, i.e., how many people need this to heat their houses. Access to the district heating network is a prerequisite for the locally produced electricity from combined heat and power.
There are several reasons why the price has gone up. The transition from fossil to renewable has increased the demand for biofuels, especially after Russia's invasion of Ukraine. Germany and Poland are two of many countries that have demanded significantly more biofuel, and return-wood on its way to Sweden has been stopped to instead be used in Germany. The prices on emission allowances have also increased, which has further increased the pressure on the transition from fossil energy to biofuel.
Furthermore, several countries in our surrounding area have converted their old fossil boilers to biofuel boilers. A significantly reduced import of biomass and biofuel from Russia, Belarus, and Ukraine has led to a fuel shortage within the EU of several million tons, and many countries in Europe are turning to the Nordic countries for biofuel. In addition, the economic situation has led to reductions within the construction industry, which in turn has led to reduced volumes of wood waste - what is sometimes called RT-chips - from the construction processes. It has also become more difficult to secure new long-term contracts.
There are very many interacting factors, Madam Speaker. It goes without saying that it is not possible to fully compensate for this even if one decided to use a lot of tax revenue for it.
Isak From knows that we have other processes underway regarding the pricing of district heating to increase transparency there. The customers, who many times are stuck with a natural monopoly, shall have the opportunity to know which costs will affect them in the future and whether these costs are justified. This must, however, be subject to a different discussion than the one that Isak From and I are having today.
Isak From (S)
Madam Speaker! The Minister for Energy and Business mentioned many factors, but she forgot one factor that affects this. I am thinking of the Swedish construction industry, which has come to a complete standstill. The amount of demolition waste and construction debris that has been used in combined heat and power production has decreased significantly, and the measures – or the lack of measures – regarding the construction sector is something that lies on the government's table. It is partly a different debate, but this is connected.
The Minister for Energy and Business says that the Government Offices are analyzing the Energy Market Inspectorate's proposal, which largely concerns strengthening the customer in the negotiation situation, including through information. That is reasonable. Customer protection against unreasonable price increases is also very reasonable. Above all, it is reasonable that society and the government point out a reasonable path. Quite a few people are now standing and wondering - if they should endure price increases of 30 percent, or recurring price increases at this rate, perhaps they are considering investing in something else.
Lack of confidence in what is being done risks harming the industry. A clear declaration is needed from the Minister for Energy and Industry regarding what is intended to be done to improve the customers' situation.
We need this power production. It is extremely important for the electricity grid, which the Minister for Energy and Business has highlighted.
I am grateful that we could have this debate. Just as the Minister for Energy and Business has pointed out, the focus needs to be shifted slightly from nuclear power and wind power so that it also concerns power and energy production from bioenergy.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I want to begin my closing remarks by once again thanking Isak From very much for the interpellation. We need more of us who understand the importance of combined heat and power and district heating for Sweden's energy system as a whole.
According to the Energy Agency's final report on the government mandate to develop a proposal for a district heating and power strategy, the use of biofuels in the Swedish energy system has increased by an average of just over 2.5 terawatt-hours per year over the last 40 years, and the majority has consisted of forest-based biomass. Here, an entire ecosystem needs to hang together. According to the strategy, there is potential for increased supply and use of forest fuel during the coming decades, but then we need to get several decisions to move in sync.
Now we are getting stuck into the forest investigation, and I am pleased that Isak From has already taken a look at it. It is about the valuation of system benefits in the electricity system and weighing this in much more clearly. It is not just about increased power production or more in, but also about how the system can function better with more stable prices and more stable delivery.
With the electricity market investigation, we are conducting a total review of the electricity market as a whole. We are reviewing flexibility issues to make the system less rigid – this applies in particular to local flexibility markets, bilateral agreements, grid benefits, and so on.
This will be an issue for more to engage in moving forward. I thank you very much for today's interpellation.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.