Questions about long-term conditions, market development, and innovative solutions are central when RISE brings together stakeholders from across the energy sector to discuss the future energy system.
At what pace is the sustainable energy transition taking place, how should the energy market support this development, and in what ways can we work together to create an even more robust energy system?
These were some of the questions discussed during one of the conversations initiated by RISE with actors in the energy industry—a venture called Energiklivet, where stakeholders from the energy sector participate to accelerate and drive innovation in the energy transition. Here, representatives from both the private and public sectors, as well as interest organizations, meet with RISE to discuss and reflect on developments in the energy transition.
Other relevant questions included how we can jointly facilitate innovative initiatives and what is required for new nuclear power to be implemented.
Sara Bargi is a project manager for future electricity systems at RISE and part of the team behind the initiative.
- We have a very well-functioning electricity system in Sweden today, and fundamentally we are on stable ground—something many may forget. But we are in a development process, and we must ensure that the electricity system continues to deliver in the future, which requires collaboration between many organizations in society, she says.
One issue highlighted by representatives of renewable energy was the deteriorating investment climate, particularly for wind and solar energy. Inflation has driven up the costs of new facilities, while low electricity prices result in poorer returns. It has reached the point where some electricity producers are shutting down operations due to insufficient profitability.
- Low electricity prices are both good and bad. They benefit households and companies that use electricity at low cost, but at the same time, they provide little incentive for companies and investors to build and innovate—which society needs to succeed with the climate transition. So these are not easy issues to manage going forward, says Sara Bargi.
We are in a development process, and we must ensure that the electricity system continues to deliver in the future, which requires collaboration between many organizations in society
Long-term conditions a crucial issue
One key issue raised for the future is the opportunities and conditions for new nuclear power in Sweden. Examples were shared of how the SMR* market operates internationally and what is needed for small modular reactors to succeed in the Swedish and Nordic markets. Many are still waiting to see the first SMR reactors in operation in the Western world, where large-scale nuclear plants remain the preferred path for many countries.
The long lead times—from planning and permitting to decision-making and actual construction—pose a major challenge for nuclear power.
- The impression is that most participants in the discussions agree on the need for long-term conditions across everything from electricity production and permitting processes to regulations, financial frameworks, and risk distribution. Regardless of the energy source, investors need to feel that they have political support, says Lisa Löfving, Head of Business Development for Energy and Heat at RISE.
Balance is key in all areas
Sweden currently has an annual surplus of electricity production and is one of the EU’s largest net exporters of electricity. However, the sharp increase in demand that many anticipated has been delayed.
- Many of us expected electricity demand to grow rapidly with the electrification of industry and transport. But several industrial initiatives have been postponed, partly due to inflation. Several participants in our discussions emphasized the need for more active measures on the demand side to support actors who need to electrify to reduce emissions. That would also improve profitability for electricity producers, explains Sara Bargi.
Supply and demand must be aligned and connected through a functioning market. New solutions and broader collaboration are also needed to shape the electricity system of the future.
- Sweden’s energy innovation portfolio must grow. According to the Swedish Energy Agency**, investments need to increase by 60% by 2028. Internationally, the IEA*** states that investments in energy-related demonstration projects must increase by 3.6 times by 2030 if the world is to reach net zero by 2050. And it’s not just about technical innovations—we need new processes and business models, environmental innovations, and new ways to implement technology where the public is also engaged in the transition. Otherwise, it won’t happen, and it’s difficult without clear and long-term conditions, says Lisa Löfving.
With increased electricity use, investments are also needed in other parts of the electricity system, especially transmission networks, grid components, and storage.
- It’s important that legislation keeps pace as new actors enter the market, such as vehicle-to-grid solutions and storage companies. Additionally, electricity consumption, grid expansion, and production must develop in sync. If it moves too fast or too slow, it affects electricity prices, says Sara Bargi, concluding:
- The energy system is complex, and it’s important to understand the different influencing factors and that we have diverse perspectives on these issues. That’s why this initiative serves an important role as a platform for collaboration and dialogue among all key stakeholders in the energy system.
*Small Modular Reactors
** The Swedish Energy Agency’s input for the upcoming energy research bill
*** IEA International Energy Agency
