Sweden’s Energy Policy – Could the USA Find Inspiration Here?

The USA could learn a number of valuable lessons from Sweden about energy policy.  The Swedish Trade delegation recently sponsored a Smart Grid roundtable in San Francisco with Anna-Karin Hatt, Minister for Information Technology and Energy in the government of Sweden’s Ministry of Enterprise, Energy and Communications.  Several Silicon Valley Smart Grid organizations, including resources from Oracle, Silver Springs Networks, EPRI, and the Smart Grid Library participated with moderation by Lars Friberg, the Swedish attaché for Climate and Energy.

Ms. Hatt set the knowledge foundation for the roundtable by describing Sweden’s energy policy targets for 2020:

  1. Achieve 50% renewables.  This is the highest target in the European Union, and they are on track to achieve it as they were at 48.9% in 2010.
  2. Deliver 20% more savings through energy efficiency measures than today – and Sweden already scores well here too
  3.  Reduce emissions 40% from 1990 levels, and by 2030, eliminate fossil fuels from their vehicle fleets.

By 2050, the country aims to be carbon neutral.  These are serious energy policy goals that starkly contrast to the conflicted USA energy policy.  The Swedish government understands that 80% of the world’s current energy consumption is fossil fuels, and that’s a significant problem for energy security, environmental balance, and economic competitiveness.  The leadership concluded that they don’t need to remain part of the problem.  With the support of their citizens, Sweden intends to become part of the solution – which is to achieve independence from fossil fuels.  Sweden plans to be in the forefront of the energy market evolution – and indeed they already have been.

There are three cornerstones for their policy objectives that cover economic competitiveness, economic sustainability, and security of energy supplies.  To do that will require increasing renewables at utility-scale and through distributed generation with renewables in the distribution grid.  The Minister acknowledged that renewables create a challenge for grid operations insofar as their variabilities need to be managed, but that isn’t impeding their planning.  They are careful to structure policy goals and conditions for actions, but not dictate how the transitions to more renewables should occur.  As Ms. Hatt noted, “we’re only at the beginning of a truly transformative period world wide, in which there will be enormous investments in energy efficiency and renewables technologies and services.”

The government in Sweden recently established a Smart Grid Council and charged its appointees with establishing a national knowledge platform for its citizens that would raise awareness of Smart Grid benefits for all stakeholders and create an action plan that identified evolving business models and research gaps.   The minister indicated that there is much to learn about consumer reactions to electricity price variations and detailed consumption data.

Sweden is making significant advances to modernize their electrical grid and integrate clean energy sources into it and transportation infrastructures.  So why did this forward-thinking government ministry convene with Silicon Valley Smart Grid players?  To collaborate on technology development, business and financial model innovations, and consumer/prosumer transformations.  This roundtable was just the first step to exchange ideas and information, such as the Property Assessed Clean Energy (PACE) programs and other creative approaches to finance renewables in the distribution grid for residential and commercial customers.  One key takeaway for us American participants – we shouldn’t limit our thinking in terms of the ambitious goals we could and should set for an energy policy that promotes energy independence from fossil fuels, and therefore delivers energy, economic, and environmental security.

The Swedish Trade delegation is planning a seminar in the San Francisco Bay Area in the first half of 2013 to continue this discussion, so stay tuned for more information and inspiration.

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Clean and Renewable Domestic Energy Sources – There’s An App for That

History is full of teachable moments to inspire us.  I was intrigued by the history of the Southwest Power Pool (SPP), the Regional Transmission Organization (RTO) that was formally established in 2004 and “ensures reliable supplies of power, adequate transmission infrastructure, and competitive wholesale prices of electricity.” (Definition derived from the Smart Grid Dictionary.) 

The informal history goes well beyond that.  The SPP came into existence on December 14, 1941 when 11 regional utilities agreed to pool power to deliver 120,000 kW of reliable electricity to Jones Mill – an aluminum plant co-located next to the largest bauxite mine in the nation back then.  Aluminum was needed to build planes for the war effort.  War was declared on December 7, 1941.  It took just seven days, in an age before the Internet, computers, faxes and cell phones for eleven utilities to overcome all technical, regulatory, and organizational issues to make a handshake deal to guarantee the power to the mill.  It’s easy to recognize the motivators for this admirable accomplishment – necessity, national security, resource scarcity, and patriotism.  The origin of the Southwest Power Pool eloquently illustrates what Americans can do when we are motivated to action.

Smart Grid technologies can help integrate utility-scale and small-scale renewable sources of electricity generation and dramatically reduce our dependence on oil and other fossil fuels for power generation and transportation.  Face it, fossil fuels are not renewable and they are definitely not clean – or cheap.  The BP deep water oil spill is merely the latest, and most dramatic evidence that our economy and society go to ever greater risks to obtain a fluid that is ever more difficult (and environmentally costly) to extract. 

Tar sands are a great example of insanely complicated and expensive oil extraction.  The oil-imbued sands must be mined, and then the oil is separated and upgraded to produce oil fit to send to a refinery.  It takes several barrels of water just to produce one barrel of oil, and not all of that water can be recycled.  Where does the unrecyclable (ie thoroughly polluted) water reside?  In toxic containment ponds that kill birds that land in them. 

Even on land, oil obeys the “spill, baby, spill” rule, as the recent Red Butte Creek spill in Utah sadly illustrates.  Another ecosystem damaged – another inconvenient externality that is not factored into the price of petroleum. 

So what about natural gas?  Increasing evidence shows that hydraulic fracturing or “fracking” of the earth to obtain natural gas also has devastating environmental results.  Fracking uses vast amounts of water and chemicals similar to Drano in toxicity to extract natural gas.  In Pennsylvania and New York, reliable and long established household wells are now pouring out flammable water.  Yes, you read that right.  Water that you can light on fire. 

The Smart Grid enables the integration of domestically-produced clean and renewable sources of energy that will reduce our dependence on fossil fuels through electrification of our cars and public transportation systems.  Smart Grid technologies also help us consumers to intelligently manage and reduce our consumption of electricity and therefore retire aging generation plants that use dirty fuels.  Ramping up domestic renewables to integrate into the Smart Grid is a war effort, and the motivators are the same as cited in the example above – we need to confront the resource realities of fossil fuels and do it out of necessity.   We need to recognize that domestic renewable energy sources in the Smart Grid provide the right economic and national security foundations to ensure American prosperity.

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