Source: IEA
Sweden is making significant progress towards a fossil-free electricity system, with growing contributions from hydro, nuclear, and wind power. However, the country faces challenges in meeting rising electricity demand due to increasing electrification, regional price disparities, and the need for expanded generation capacity.
Sweden's electricity system is largely fossil-free, making it well-positioned for the energy transition. In 2022, the majority of electricity came from hydro (40%) and nuclear (30%), with wind power contributing 19%, a significant increase since 2015. The rest came from bioenergy and waste, while natural gas, oil, and coal accounted for just 0.7%.
Electricity demand in Sweden has remained stable at around 140 TWh since 1990, with buildings consuming 58%, industry 38%, and transport 3.3%. However, electricity output has grown by 9% from 2005 to 2022, supporting Sweden's status as one of Europe’s largest electricity exporters. In 2022, Sweden exported 33 TWh (19% of its output) primarily to Denmark and Finland. Domestic demand is expected to rise sharply due to electrification goals.
Sweden’s electricity generation capacity has increased, particularly from wind and solar. However, nuclear capacity has decreased by 29% since 2016, with half of its reactors being decommissioned. Currently, six reactors from three plants remain, representing 16% of total capacity. To meet its climate targets, Sweden will need to significantly expand its fossil-free generation capacity, using a mix of nuclear, wind, and solar power.
Load Growth
Sweden's electricity demand has been stable over the past three decades, with electricity accounting for about a third of total final energy consumption (TFEC), one of the highest levels globally. However, as electrification increases in industry and transport to meet climate targets, electricity demand is expected to rise significantly. By 2030, demand is projected to reach 160-210 TWh, and by 2045, it could range from 200-340 TWh. The industrial sector will drive much of this growth, depending on decarbonization efforts and low-carbon industrial development. Overall, demand could increase by 40% to 140% by 2045.
Generation Capacity
Sweden's 2019 National Energy and Climate Plan set a target for 100% renewable electricity by 2040, later revised in 2023 to include nuclear power for a fossil-free electricity grid. To meet the growing demand, Sweden will need to double its current electricity generation capacity. In the short term (2030-2035), growth will be primarily supported by onshore wind and solar, while in the longer term, offshore wind and new nuclear plants are expected to play a larger role.
Power Balance and Regional Variations
While wind power growth has increased Sweden's electricity exports, the south of the country is facing power balance challenges, particularly during peak consumption periods, leading to a higher reliance on imports. Regional disparities in electricity prices have grown, with southern Sweden, where most demand and nuclear capacity are located, experiencing much higher prices compared to the north, which has abundant hydro and wind resources. The energy crisis following Russia’s invasion of Ukraine worsened these price differences. In August 2022, the price in southern Sweden (SE4) was 305 SEK/kWh, compared to just 18 SEK/kWh in the north (SE1).
Limited transmission capacity from north to south has prevented the flow of electricity to deficit regions, and this has discouraged investment in new generation in the south. Southern Sweden now has one of the highest power deficits in the EU. Sweden is reviewing its electricity pricing zones, with recommendations expected by 2024.
Looking ahead, the power balance in northern Sweden is expected to shift, as large industrial projects are planned to take advantage of lower electricity prices. The Swedish Transmission System Operator (TSO) predicts that by 2035, region SE1 could face a power deficit, reducing electricity supply to the south from northern generation sources.
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