Within the transport sector and industry, biofuels and electrification are often presented as competing alternatives in the transition. On the contrary, they need to be combined in several different ways and can often create synergies.

– My view is that you should electrify everything you can in transport and industry, because sustainable bioenergy will be a limited resource, where demand will exceed supply, says Johan M Ahlström, unit manager at RISE.

– On the transport side, despite large battery electrification, there will still be vehicles in need of gas and liquid fuels, for example, in aviation and shipping, which means these biofuels will have to be produced as efficiently as possible.

Climate-positive electricity generation

By using biomass in combined heat and power plants and combining this with bio-CCS – that is, carbon dioxide storage of renewable carbon atoms – it is possible to achieve renewable, planned and climate-positive electricity generation. If this is done in conjunction with district heating production, it becomes highly efficient.

Another approach is to electrify part of the process involved in producing biofuels and bio-based chemicals. This makes it possible to utilise biomass more efficiently, so that it goes further. One example is to use a process known as gasification to convert the biomass and then use electrical energy to increase efficiency. This makes it possible to obtain more than twice as much product from the same bio-raw material.

– We need to safeguard the renewable carbon atoms that exist and utilise them as effectively as possible, says Johan M Ahlström.

Long-term and resource-efficient solutions necessary

At present, most biofuels are made from crops such as wheat, maize and rapeseed, as well as from residues from animal slaughter. But significantly more biofuels could be produced from underutilised residues from forestry, such as branches, treetops, bark, and sawdust, and residues from pulp mills. 

– Since there is no immediate resource shortage and the raw material is not very expensive, it can be cheaper in the short term to burn some for energy in the processes, says Johan M Ahlström. And since it’s biogenic carbon dioxide, its emissions come at no cost. So, it’s important that we raise the issue and ensure that we get more long-term sustainable solutions with higher resource efficiency. This applies to both existing forestry industries and new emerging biorefineries.

RISE is involved in several projects in the field, relating to technology development as well as system studies. Several projects are looking at how the forestry residue lignin can be used more efficiently than today. Other projects are focusing on what are known as bio-electro-fuels, along with other ways to increase resource efficiency in biorefineries.

– We also help individual companies to examine their processes. We encourage organisations to start thinking in the long term right now and to develop processes that make efficient use of the valuable biomass we have, concludes Johan M Ahlström.

If Sweden is to achieve its climate goals, the process industry needs to transition from fossil fuels and raw materials to electricity. A great deal of electricity. Add to this the electrification of vehicles, and any number of other energy-intensive operations such as server farms, and the increase in electricity consumption over the next thirty years will be marked. An annual increase of about 6–8 terawatt hours, the equivalent of 300,000 electrically heated house, will be required each year. But where is all this electricity to come from?

– “There’s no answer to that question, no either/or,” says Caroline Haglund Stignor, Head of Robust and Flexible Energy System at RISE.

– “It’s a matter of different perspectives: what we can do in the short term, and what we can do in the longer term with the aid of new technology.”

In the short term: onshore wind and solar power

In the here and now, the next decade, onshore wind and solar power is one of the easiest ways to expand electricity production, both rapidly and at relatively low cost. Moreover, solar power can be built close to consumers, on city rooftops.

– “Onshore wind power will play a key role over the next decade. In the longer term, say 10–20 years, offshore wind power is most likely the best bet, but it takes longer to get in place,” says Caroline Haglund Stignor.

Interplay between different types of power

Solar power and wind power have the advantage of complementing each other in that the sun often shines when the wind is calm and vice versa. But we also need other energy sources.

– “Historically, we’ve considered energy to be freely available, something that is just there, one energy source at a time,” says Stefan Ivarsson, Unit Manager Renewable Energy at RISE.

– “But that isn’t enough. We need to replace that approach with one in which we consider both energy and power, a system approach encompassing the entire energy sector, for better interplay between the different types of power. We can’t just say solar or nuclear or wind, because then we lose the interaction. Different types of power have different advantages, and we need to create a system in which all the parts work together as a whole.”

One example is a study showing that hydropower has great potential to act as a power regulator for solar and wind power, but such a scenario requires hydropower plant modifications that are yet to be made.

– “Other interesting possibilities include energy storage in the form of hydrogen gas in caverns, or heat storage in the bedrock. The important thing is that we consider how the entire energy system can interact,” says Stefan Ivarsson.

New construction not the only solution

However, neither new construction in the shape of new energy sources nor upgrades to existing plants alone can solve this.

– “We can also benefit a great deal from optimisation, which mustn’t be forgotten in the debate,” says Malin Unger, a project manager at RISE.

– “It won’t be enough alone, but there are great socioeconomic benefits to be gained from not moving too fast but first assessing where we can rethink things and what we can optimise.”

Moreover, she encourages reflection for other reasons too.

– “While we need to expand production, if we expand too fast, we risk compromising quality as well as neglecting the necessary system and life cycle approach. Neither the public nor the private sector will have time. RISE can be an important partner here, in part because of our breadth and expertise, and in part by means of impartial quality control. We can act as a partner that gathers stakeholders and helps them to find common ground for moving forward.”

Between six and eight terawatt hours, the equivalent of about 300,000 electrically heated houses – this is how much Swedish electricity production needs to increase each year for the next 30 years.

– “This is mainly due to industrial electrification, because to achieve our climate goals we need to replace the fossil fuels currently used by the process industry, which will take huge amounts of electricity,” Jan Djurström explains. Examples include fossil-free steel production in the north and new factories to produce battery cells around the country.

Consumption and production out of balance

As long as this increase in demand is balanced by increased production, it will not cause any major problems in the electricity market.

– “However, the challenge is that it takes a long time to build up production. Consumption has essentially remained the same for 30 years but is now increasing rapidly, which begs the question as to how investments in new production are to keep up with this increasing demand.”

One problem is price. A great deal of electricity is produced in northern Sweden, but demand there is currently relatively low. Bottlenecks in deliveries to southern Sweden mean that electricity prices in the north are too low to create good investment opportunities.

– “Parallel to this, we know that we’re facing an energy transition, not least in northern Sweden, so the question is when will investors dare to start expanding electricity production.”

Purchase agreements and risk management key

In southern Sweden, electricity prices are already interesting to investors, but permit processes and legal appeals are major obstacles. What, then, will it take to get energy market stakeholders to contribute to the energy transition in good time?

– “It’s a complicated issue with many facets. However, power purchase agreements, which are long-term power production agreements between a specific producer and a specific consumer, may become more common, for example.”

Another aspect that Jan Djurström raises is the need for electricity market stakeholders – consumers and producers – to reconsider their risk management.

– “An energy transition involves, for instance, financial risks, for buyers and sellers alike, and so it’s important to reconsider your risk exposure to prepare for different scenarios.”

Regulations need reviewing

In addition, the regulatory aspects also need to be reviewed, such as the regulations governing the expansion of the power grid.

– “The power grid owners haven’t been allowed to build grids on a speculative basis before. The reason for this is to prevent them from using their monopoly to over-invest, but it also means that they’re essentially prevented from being proactive. Until now, it’s been quite okay for increased grid capacity to take ten years to get in place, but this won’t be the case moving forwards.”

Support from RISE

In other words, regardless of role in the electricity market, there are many things to consider, and this is not always easy. This is why RISE offers a range of services for both private and public stakeholders.

– “We can help customers with, for example, forecasts regarding how the energy transition and the energy market will develop, risk assessments and analyses of how regulations and provisions may need to be amended to support the energy transition.”

Tech and logistics giant Amazon is expected to commission its third wind farm investment in Sweden in the northern county of Västernorrland in 2022. Wind and solar power developer OX2 has handed over completed wind farms to IKEA and Google — giants that are securing access to renewable electricity through ownership. State and municipal companies are losing market shares across the board as other capital seeks promising investments.

– “However, exactly who owns electricity production facilities is of lesser importance. More important is where they are built, that production is close to end users. This is because we don’t have time to expand the transmission infrastructure in the short to medium term. This is an important consideration – you can’t say no because then there won’t be anything for you,” says Jonas Bergqvist.

Major investments required

Guestimates project investment needs in the region of SEK 1,000 billion to complete the energy transition required for net zero greenhouse gas emissions by 2045. Internationally, investment needs are on corresponding levels.

In his annual letter to CEOs, Larry Fink, CEO of the world’s largest asset management company Blackrock, speaks of an “unprecedented amount of capital looking for new ideas”. He also writes, “The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers”.

– “We need to position ourselves favourably for investments,” says Jonas Bergqvist.

Initiative to drive energy transition

Jonas Bergqvist is part of the RISE team behind Energiklivet, an initiative pursued together with energy industry stakeholders to speed and drive innovation in the energy transition. In addition to complex technology and systems, it is very much about ensuring flexible regulatory systems and viable market models.

– “We need to try a lot and experiment a great deal. Sweden’s energy innovation portfolio needs to double or triple in size.”

– “I can envision Energiklivet achieving similar feats in this field to what Sweden’s home PC reform did for digitalisation here. We digitalised earlier than the rest of the world, and we’re going to do the same within electrification.”

The technology already exists

Jonas Bergqvist says that a large share of the electrification process could be achieved with existing technology. Then there are promising technologies such as those for carbon capture and energy storage that can not only have an impact in local energy systems, but also help to replace fossil-based systems more quickly.

– “We need to water like crazy to get things to grow. Set up demo and test projects, get region x to provide a battery for a project, and scale things up within storage. Invest in trying new Swedish solutions, so that we put our innovation into practice.”

In addition to the investments that can be made within the Energiklivet initiative, RISE is also working with various stakeholders to boost climate efforts. Companies and society are being helped to understand and act on the major challenges they face by means of analyses, advice, road maps and projects. To exemplify, Jonas Bergqvist mentions the work on energy plans in Region Västra Götaland and Region Skåne.

– “We do a great deal of policy work for several municipalities and regions. Translating their environmental goals into concrete terms, ensuring that they have the right plans and make the right decisions. We help them to break down their plans to enable them to become fossil free by a certain year, to make their progress both measurable and feasible.”

Regulations, planning, participation, information exchange and behaviour changes are being examined in the RISE initiative Energiklivet (Eng: Energy Leap). Valuable time can be gained, especially time spent on permit processes and regulations, and Sara Bargi, Project Manager at RISE, believes that it is these types of issues that are underdeveloped in relation to technological development:

– “In general, technological development and research are uncontroversial and politically harmless. But changing regulations is more difficult and has a completely different political cost.”

Bargi is a driving force in Energiklivet, a RISE initiative serving as a workshop for Sweden’s climate goals, which necessitate the rapid and total electrification of society. Current lead times for building or overhauling infrastructure are a notorious obstacle. It can take 10-15 years – from planning to operation – to erect national grid lines.

Participation and new approaches can resolve goal conflicts

Many things eat away at time. Several delayed wind power projects can be blamed on conflicts between what is desirable globally but mostly in the way locally.

– “This needs to be addressed and approached in new ways,” says Bargi. “There may be more innovative ways to tackle goal conflicts, not just saying that one is more important than the other. We need to involve people, get them to participate in the transition, show them the benefits. Otherwise, the energy transition risks stalling.

– “It’s important to test new ways of doing things. The conflict lies between legal certainty and predictability, and the authorities’ way of testing new solutions.”

Dialogue crucial for efficient processes

Anna Månsson from RISE is an expert on permit processes. She was part of the Environmental Assessment Inquiry, which among other things looked at how the initial consultation process according to the Environmental Code can be improved.

She says that honest dialogue between the operator and the county administrative board is crucial for an efficient process. The problems must be put on the table as early as possible. The greater the transparency and clarity, the easier it is to define an environmental impact statement or determine the scope of decision-making:

– “It’s important that we try to help each other move forwards. But since you have different roles as an operator and authority, you want different things.”

She emphasises the importance of being clear and having courage when it comes to selecting and rejecting. Major investigations that answer irrelevant questions benefit no one.

– “An important conclusion is to limit the permit process to solely focus on things that require a permit,” says Månsson. You should not put things in unnecessarily that can be more easily solved with supervision.

– “The aim is not to diminish environmental protection. There must still be high environmental requirements, but the focus should be on what’s important.”

Successful establishment in Skellefteå

Joachim Nordin, CEO of Skellefteå Kraft, cites the Northvolt establishment as a successful example of collaboration between the region, the municipality, and the business community. It involved “preparing the best environmental application that anyone had ever seen” and avoiding the time-consuming, back-and-forth loops that occur when incomplete applications need to be completed.

However, the experience is different when it comes to overhauling an existing hydropower plant and avoiding reassessment of the entire permit.

– “With regard to permits for hydropower in particular, it seems more difficult to foster collaboration between authorities and the business community. You are not used to it, but the attitude is more: “We’ll meet in court and see who wins”.

Identify solutions together

Sara Bargi has high hopes for moving forward when all operators in Energiklivet can gather in the same room. Participants include authorities, companies, industry organisations, county administrative boards, regions, and municipalities, all of whom must represent the public interest in some way.

– “The goal is to identify solutions together. Not just send a wish list to politicians. If electricity companies are not good at consultation, then perhaps they will hear this from the county administrative board. Maybe it will be a step on the path to finding better solutions?”