Electricity in the future – effect on the climate and …...important environmental challenges for...

Electricity in the future – effect on the climate and environmentA project reportIVA Electricity Crossroads project

THE ROYAL SWEDISH ACADEMY OF ENGINEERING SCIENCES (IVA) is an independent academy whose mission is to promote the engineering and economic sciences and the advancement of business and industry. In cooperation with the business community and academia, IVA initiates and proposes measures to improve Sweden’s industrial expertise and competitiveness. For more information about IVA and the Academy’s projects, see the website www.iva.se.

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PROJECT REPORTS (IVA-M): A project report summarises a significant portion of a project. A project report can be a report generated during the course of a project or a final report produced at the end. A final report can be based on several project reports. Project reports contain fact-based analysis, observations and a discussion of consequences. Final reports contain clear conclusions and prioritised policy recommendations. Project reports are often the result of the work of a work group and contain limited conclusions and policy recommendations. The project Steering Committee approves all project reports for publication and they are fact-checked by IVA to guarantee their factual accuracy and quality.

IVA-M 480ISSN: 1102-8254ISBN: 978-91-7082-954-3

Authors: Birgitta Resvik, Fortum & Rose-Marie Ågren, SwecoProject Manager: Jan Nordling, IVAEditor: Camilla Koebe, IVALayout: Anna Lindberg & Pelle Isaksson, IVA

This report is available to download as a pdf fileat IVA’s website www.iva.se

Foreword

This report has been produced by the Climate and Environment Work Group as part of IVA’s Electricity Crossroads project.

The task of the Climate and Environment Work Group has been to identify the consequences of possible alternatives for Sweden’s future electricity system that have been developed by the Electricity Production Work Group within the Electricity Crossroads project. The Swedish electricity system is considered in an international context.

We have, as far as possible, tried to adress the climate and environmental aspects from a life-cycle perspective. The climate and environment field is complex and it has not been possible to examine it in full within the project. We have chosen to limit the study to the most relevant climate and environmental factors in the natural environment and aspects relating to the sustainability of the electricity system.

The composition of the Climate and Environment Work Group is broad and it includes representatives with a variety of backgrounds and expertise. This has provided a unique opportunity to obtain facts and has contributed to many interesting and fruitful discussions. The Work Group has organised several seminars and invited experts to meetings in order to gain access to the latest knowledge. We also assigned Ecofys1 to carry out a study on the monetary value of environmental impacts from the use of energy. The lead authors of the report are Birgitta Resvik and Rose-Marie Ågren.

Stockholm April 2016

Climate and Environment Work Group:

Birgitta Resvik, Fortum (Chair)Rose-Marie Ågren, Sweco (Project Manager)Anna Wolf, Swedish Society for Nature ConservationCecilia Kellberg, Swedish Energy Dag Henning, Swedish Environmental Protection AgencyHanna Paradis, SwedegasHelen Axelsson, Swedish Steel Producers’ AssociationHelle Herk-Hansen, VattenfallJenny Gode, IVL Swedish Environmental Research InstituteKarin Jönsson, E.ONLena Westerholm, ABBLennart Sorby, Swedish Agency for Marine and Water ManagementMåns Nilsson, Stockholm Environment Institute, SEI

Contents

1. Summary ...................................................................................................................... 7

2. Introduction ............................................................................................................... 11

3. Sustainability of the electricity system now and in the future ......................................13Social, economic and environmental aspects ................................................................13Trade-offs and/or synergies ..........................................................................................13

4. Objectives and policy instruments ...............................................................................15The UN’s sustainable development goals – a key focus of Swedish policy ......................15Energy and climate targets in the EU and Sweden ........................................................ 16The 16 national environmental quality objectives ....................................................... 17Economic and administrative instruments in environmental, climate and energy policy ... 19

5. Climate change affects the environment and the electricity system ............................. 23Higher temperatures, more precipitation and higher forest growth ............................. 23Possible impacts on electricity generation .................................................................... 24

6. Important environmental issues for the electricity system in 2050 ...............................25Solar power ..................................................................................................................25Wind power ................................................................................................................ 26Bio-Combined Heat and Power (CHP) ......................................................................... 26Waste .......................................................................................................................... 27Nuclear power ............................................................................................................ 27Hydropower................................................................................................................ 28Gas power for power balancing .................................................................................. 29Imports and exports ................................................................................................... 29The transmission and distribution system ................................................................... 30Usage .......................................................................................................................... 31The impact of different types of generation on the climate .......................................... 31Environmental and health aspects of supplementary systems .......................................33

7. Economic valuation of environmental impacts ........................................................... 37

8. Impact on Sweden’s current environmental quality objectives .................................... 41

9. Tomorrow’s climate and environmental challenges and opportunities ....................... 43Climate change ........................................................................................................... 43Valuation of biodiversity ............................................................................................. 48Resource Use .............................................................................................................. 50

10. Appendices .................................................................................................................. 53

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1. Summary

The Work Group has analysed the climate and environmental consequences of four alternatives that have been created as part of the Electric-ity Crossroads project by the Working Groups on electricity generation; electricity distribution and transmission; and electricity usage. The al-ternatives are: More hydropower; More solar and wind; More bioenergy; and New nuclear power. The objective has been to highlight the main challenges for the climate and the envi-ronment, identifying what is large and what is small, as well as which of Sweden's 16 national environmental quality objectives will be pri-marily affected by the alternatives. The Work Group has also made an expert assessment of how the environmental quality objectives could be expected to be met by each of the different alternatives. Both direct and indirect impacts have been considered.

The Work Group has discovered that bio-diversity, resource use and climate change are important environmental challenges for the elec-tricity system in the future.

A SYSTEMS PERSPECTIVE

From the start, we would like to stress that it is not possible for the electricity system to have zero impact on the climate and the environment. However, its impact can, and should, be mini-mised. From a sustainability perspective, the entire energy system should be considered in an international context. It is less interesting to just assess Sweden’s electricity system in terms of cli-mate and environmental aspects.

In the four alternatives, emissions of fossil greenhouse gases from electricity production within Sweden’s borders are limited, as one of the basic assumptions is a fossil-free electricity system. On the other hand, there are indirect greenhouse gas emissions associated with the

construction of new electricity production; the extraction and transportation of fuel; and dur-ing the manufacture of components like solar cells, when they are manufactured in coun-tries that use fossil fuels. The amount of indi-rect greenhouse gas emissions depends on how quickly the fossil fuels will be replaced for these activities and the development of the electricity system in other countries. One way to accelerate this could be to introduce requirements at the purchasing stage to ensure that they are manu-factured using fossil-free energy.

Following discussions at seminars and the ex-pert panel assessment, the Work Group concludes that the most difficult environmental challenges in the Sweden’s future electricity system are linked to the use of resources and biodiversity. Gener-ally, it is believed that many environmental issues will be managed through technological develop-ment and implementation, for example, most of the emissions to air, but that deliberate incentives and policy measures are required to achieve this. As previously mentioned, the impacts of the fu-ture electricity system on the climate are mainly considered to be derived from indirect emissions, such as from the manufacture of electricity gen-eration equipment in other countries.

One observation is that environmental aspects vary in nature in the four alternatives, ranging from significant local impact on the environ-ment to indirect effects of production in other countries, for example, during the manufacture of components and materials extraction. It is our opinion that the four alternatives, which have in-tentionally been made extreme, each has different environmental aspects that should be highlighted.

Improving energy efficiency in different sec-tors is an important aspect from a systems per-spective. This covers everything from the use of residual energy from industry or data centres to how the end consumer can play an active role in (contributing to) balancing the power system.

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CLIMATE CHANGE

The temperature rise in the northern hemisphere due to climate change is expected to be greater than at the global level and the temperature is predicted to increase by two to six degrees in Sweden. This increase in temperature will po-tentially be one of the main causes of losses in biodiversity and changes in the ecosystem.

At the same time, a rise in temperature will re-duce the need for heating in residential and com-mercial buildings and increase precipitation, which will provide improved conditions for increased hy-dropower generation and greater biomass growth. These aspects will obviously have an impact on the development of the electricity system.

BIODIVERSITY

Biodiversity has proven to be almost impossible to completely putvalue on and neither have the effects on biodiversity been fully incorporated into the model produced by the Ecofys study. We believe more knowledge is needed in this area and could be achieved through systematic

monitoring, and on-going intensified dialogue between different stakeholders.

Views on biodiversity vary and the impact of various activities may be difficult to judge objec-tively. This is an area in which more knowledge is required among all stakeholders, for more predict-able assessments in, for example, permit processes.

We also note that biodiversity, both in terms of extraction of biomass and the effects of hy-dropower generation, is an area that requires political consideration.

USE OF RESOURCES

In our analysis, resource use has been identified as one of the three main environmental chal-lenges in the future. In all of the alternatives, the amount of electricity produced from bioenergy is predicted to increase. With today’s technol-ogy, it will be difficult to sustainability achieve this using only domestic forest residues. Other types of biomass may be needed, such as other forest raw materials, agricultural residues and organic waste. Forest biomass is also a global commodity and sustainable biomass could also

Results of the Expert Panel’s assessment

Generation scenario 1 2 3 4

Swedish Environmental Quality Objectives

More solar & wind

More biopower

New nuclear power

More hydropower

1. Reduced climate impact

2. Clean air

4. A non-toxic environment

6. A safe radiation environment

8. Flourishing lakes and streams

10. A balanced marine environment, flourishing coastal areas and archipelagos

12. Sustainable forests

14. A magnificent mountain landscape

15. A good built environment

16. A rich diversity of plant and animal life

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be imported. Ultimately, how forestry and agri-cultural resources are used is a question of eco-nomics. However, it would be easier if interna-tionally recognised sustainability criteria were to be established. Currently, very few energy companies have procurement requirements for biomass in place, and guaranteeing the origin of the biomass should be the first step.

One observation is that the Swedish view of the climate neutrality of biomass and sustaina-ble forestry is not the same as the one apparently being expressed by certain European non-gov-ernmental organisations. The European Com-mission is currently drawing up sustainability criteria for solid biofuels, which could have a significant effect on the development of biomass use in the energy sector.

In terms of use of resources such as rare earth metals, other metals and uranium in context of the electrical system, it is important, from an envi-ronmental perspective, to assess whether they can be recycled or if the resource is consumed. At the same time, rapid technological developments are taking place and, for example, rare earth metals in wind turbines will probably be replaced with other materials, when the cost gets too high. As in any other business, the electrical system should be viewed as part of the circular economy.

Resources are also involved in land and water use, which is managed through physical plan-ning. In Sweden, municipalities have a major re-sponsibility for the planning of water and land use. Planning and building regulations must take a range of stakeholders into consideration. There is no national planning for the whole of Sweden but the government can influence re-gional planning through national targets and by identifying claims in the national interest. Land and water use has partly been examined in this report, for example, in the description of land use in relation to wind power.

Technological development of products, partly linked to digitisation, as well as in the actual elec-tricity system, enable efficiency improvements to be made, which is another aspect that is impor-tant to consider when discussing resources. In the transport sector, the transition from fossil fuels to electric vehicles is a more efficient use of resourc-es, as electric drive is considerably more efficient.

THE ENVIRONMENTAL IMPACT OF THE GENERATION ALTERNATIVES

One observation is that environmental impacts vary in nature in each of the four alternatives defined by the Production Work Group, rang-ing from significant local impact on the environ-ment to indirect effects of generation in other countries. We have determined that the four al-ternatives have different environmental impacts and that it is impossible to easily rank them from an environmental perspective.

the more hydropower alternative would have a significant impact on biodiversity as some, or all, of Sweden’s unexploited rivers would need to be used. It is essentially impossible to find a way to construct hydropower in unspoiled country-side in a way that is acceptable in terms of the impact on biodiversity because of the migration barriers that are created. Efficiency improve-ments and increase in generation in waterways that are already utilised, need to be designed so they don’t have an increased negative im-pact on animal and plant habitats. At the same time, there are already environmental protec-tion measures in place to meet the EU’s Water Framework Directive, which makes it challeng-ing from an environmental perspective to see how hydropower generation could be massively expanded. From an environmental perspective, it would be interesting to study whether an ex-pansion of run-of-river hydropower plants in the future would be able to contribute to increased generation. In the More hydropower alternative, a substantial expansion of the transmission net-work would also be necessary from the north to the south of Sweden, which would also have consequences for the environment.

the more sun and wind alternative requires substantial energy storage capacity, demand flexibility and load-balancing power, which should be produced fossil-free. A significant expansion of the transmission network is also necessary, which could impact the local environ-ment when cables are laid. With this alternative, it is also very important to follow development of the components and systems produced in oth-

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er countries to gain insights into the environ-mental impact of manufacturing like solar cells and wind turbine components. In this alterna-tive, more short-term regulation for hydropower is needed as changes to the water environment can occur, although there can be some benefits from an increased water flow. The intermittency of solar and wind energy can also be dealt with by using more gas power or battery storage. However, more knowledge is needed about the environmental impacts, both short- and long- term, that result from the manufacture of batter-ies, in terms of metal extraction and total energy use. Today, an increasing proportion of batteries are produced in China with a lot of fossil fuels in the energy mix. Gas power can be fueled using natural gas or biogas, the latter, which creates fossil carbon dioxide emissions. The environ-mental impact of wind power on the local en-vironment consists of changes to the landscape, the risk of disturbing sensitive habitats, bats and birds as well as noise pollution. The larg-est emissions from wind power occur during the manufacturing and construction phases; some of these effects are indirect and depend on the country of manufacturing and methods used.

the more bioenergy alternative requires high levels of biomass, which will mainly come from residual products from the forest industry. It has been concluded, however, that it will be difficult to deliver this type of volume in a sustainable way based on domestic forestry residues alone. A higher extraction rate would result in a great-er environmental impact on things like biodiver-sity. More traceability would also be required. This alternative also involves more transporta-tion, which also impacts the environment.

The Swedish Forest Agency estimates the po-tential supply of branches and tops in the future to be three times more than today, but this would still not be enough. Obviously, other types of bi-omass also need to be considered, such as other forest products and residues from agriculture, but the potential of using these resources for en-ergy has not been calculated. This alternative is also entirely dependent on rapid technological developments in the cogeneration sector in order to increase the amount of electricity that can be

produced. The Production Group believes that condensing power does not make sense financial-ly, and it can also be questioned from a systems and resource perspective. A broader systems per-spective, for example involving the development of bio co-location, which also produce biofuels and in which resource efficiency is higher, may be a more environmentally optimal alternative.

the new nuclear alternative essentially re-places today’s system with equivalent nuclear power generation with upgraded technology. From an environmental perspective, this alter-native gives rise to emissions in fuel extraction, transport and plant construction, as well as a higher volume of nuclear waste than today that will need to be dealt with. From a resource per-spective, upgrading to nuclear power generation IV would have a significant and positive impact on fuel use and reduce the risks associated with waste disposal. In terms of location, it has large-ly been assumed that it will be same as in today’s electricity system and a large expansion of the transmission network is unlikely to be required.

GENERAL OBSERVATIONS

There are large uncertainties in the environmen-tal assessments for the 2030 to 2050 timeframe, particularly in the case of technologies that are currently undergoing rapid development, such as solar cells and batteries. Development is moving fast and the data in today’s literature on envi-ronmental aspects from a life-cycle perspective is uncertain. However, there needs to be more focus on the environmental aspects, especially those relating to new technologies.

Major technology leaps must be taken into ac-count in the development of the electricity sys-tem. A market model, including policy instru-ments, needs to be designed, to help promote technological developments in electricity usage, distribution and generation.

The four alternatives, which are deliberately designed as extremes, are impossible to rank. Each alternative has advantages and disadvantag-es from an environmental and climate perspec-tive, which is why political direction is required.

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2. Introduction

ELECTRICITY CROSSROADS’ VISION OF A SUSTAINABLE ELECTRICITY SYSTEM BEYOND 2030

This report highlights the impacts that Sweden’s future electricity system could have on the cli-mate and environment in the time frame 2030 to 2050. The report provides a comprehensive analysis of the climate and environmental con-sequences of the alternatives developed by the Electricity Crossroads project’s Production, Distribution and Usage Work Groups. The four alternative future energy systems that have been developed are: More hydropower, More solar and wind, More bioenergy and New nuclear power. The starting point is that electricity gen-eration will be fossil-free by 2050. For more de-tails about the different alternatives, read the re-port by the Electricity Production Work Group: Sweden's future electricity production.

The approach has been to identify the main environmental challenges, both in terms of di-rect and indirect impacts, as well as which of Sweden’s national environmental quality objec-tives will primarily be affected by the proposed energy solutions. In autumn 2015, the UN also adopted new sustainable development goals, which may affect the formulation of Sweden's own goals in the future, and these are also con-sidered from an energy perspective.

During the project, progress has also been made with the global climate change agreement negotiated during the UN process, COP 21, in Paris in December 2015. The objective is to lim-it global warming to "well below" two degrees Celsius compared to pre-industrial times and pursue efforts to limit it to 1.5 degrees Celsius. This is obviously a crucial step towards reduc-ing the use of fossil fuels at a global level. Sub-

sequently, this should have an impact on how the world's energy supply develops in the future, which in turn will also affect Sweden’s future levels of indirect emissions.

In Sweden, the Environmental Objectives Council is working on proposals for a new cli-mate policy with new goals for Sweden. An in-terim report was presented in March 2016, pro-posing a new climate law and for the Sweden’s climate goals to be tightened from reaching zero net emissions greenhouse gas emissions by 2050 to zero net emissions by 2045. According to the Environmental Objectives Council, zero net emissions means a reduction of emissions in Sweden by at least 85 percent compared with 1990 levels. However, it is important to remem-ber that Sweden’s electricity system is currently 98 percent free of fossil fuels, according to 2014 generation figures.

The vision of the IVA project is "a sustainable electricity system beyond 2030 that will provide an efficient and secure supply of electricity at a competitive cost." "Sustainable" is a multifac-eted term and we present our interpretation of it in an attempt to establish a common under-standing.

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3. Sustainability of the electricity system now and in the future

SOCIAL, ECONOMIC AND ENVIRONMENTAL ASPECTS

A sustainable electricity system produces elec-tricity without damaging the framework created by the Earth's resources or other important so-cial values. The framework consists of a balance between a number of economic, environmental and social factors, as illustrated in Figure 1. The climate and environment is a complex area and one that the project has not been able to deal with in its entirety. Our approach has been to identify all the sustainability issues and then focus on the most relevant climate and environ-mental factors affecting the natural environment as well as aspects relating to the sustainability of the electricity system.

TRADE-OFFS AND/OR SYNERGIES

The long-term factors relating to the design of the electricity system should be viewed from a life-cycle perspective. Sustainability, which is the overall goal, is made up of different parts, which sometimes compete with each other and sometimes complement each other. Expansion of a sustainable electricity system needs to take place in economically stable conditions in a good investment climate. The electricity system cannot be expected to have zero negative impact on the environment or society, but any impacts should be minimised. The various impacts of the electricity system need to be weighed up against each other from the perspective of society as a whole and should promote positive development at a global level. Priorities between different goals can create conflicts between the goals, as well as synergies.

Figure 1: Our interpretation of a sustainable framework for the electrical power system

1. Economics

3. Society 2. Environment

Environmental economics

Socio-economics

Sustain - ability

Social environment

• Economic stability• Innovation/technological

development• Good investment climate• Good competitiveness

• High efficiency level• High resource efficiency• Limited and circular use of

finite resources

• Low environmentally harmful emissions from a life-cycle perspective

• Low collective negative impact on biodiversity and the eco-system (the Swedish national environmental objectives)

• Residual products returned to the cycle

• Low negative climate impact

• Good working conditions• Low risk of accidents, good

health and safety• Equality• Diversity• Human rights• Cultural environment

• High security• High availability• High reliability• Strong resistance against

sabotage• Uses resources in such a

way that no risky state of dependence on individual countries or individual suppliers arises

• Equal access to energy

The balance between economic, environmental and social factors from a life-cycle perspective in a way that benefits various stakeholders • Societal acceptance (noise, landscape, aesthetics)

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4. Objectives and policy instrumentsTHE UN’S SUSTAINABLE DEVELOPMENT GOALS – A KEY FOCUS OF SWEDISH POLICY

In September 2015, members of the UN adopted a new global framework for global sustainable development, with new Sustainable Develop-ment Goals (SDG), as illustrated in Figure 2. The so-called Agenda 2030 represents a new order for global cooperation in several ways. The framework consists of 17 goals and 169 targets, a declaration and implementation and monitor-ing mechanisms.

The goals are integrated, i.e. they are inter-related and should be treated as an "indivis-ible whole", and address the economic, social, environmental and institutional dimensions of sustainable development. The objectives are uni-versal and should be implemented by, and in, all the countries of the world. The agenda is also considered to be transformative, i.e. it seeks to achieve fundamental systemic change that will

Figure 2: Overview of the UN's sustainability goals

Within energy goal (number 7) there are 4 sub goals7.1 By 2030, ensure universal access to affordable, reliable and modern energy services.7.2 By 2030, increase substantially the share of renewable energy in the global energy mix.7.3 By 2030, double the global rate of improvement in energy efficiency.7.a By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy,

energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology.7.b By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries,

in particular least developed countries.

1. No poverty

End poverty in all its forms everywhere

7. Affordable

and clean energyEnsure access to affordable,

reliable, sustainable and modern energy for all

8. Decent work

and economic growthPromote sustained,

inclusive and sustainable economic growth, full and productive employment and decent work for all

9. Industry, innovation and infrastructure

Build resilient infrastructure, promote inclusive and sus-tainable industrialisation and

foster innovation

10. Reduced inequalities

Reduce inequality within and among countries

11. Sustainable cities and communities

Make cities and human settlements inclusive, safe, resilient and sustainable

12. Responsible

consumption and production

Ensure sustainable consumption and

production patterns

13. Climate action

Take urgent action to combat climate change and

its impacts

14.Life below water

Conserve and sustainably use the oceans, seas and

marine resources for sustainable development

15. Life on land

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably

manage forests, combat desertification, and halt and reverse land degradation and halt

biodiversity loss

16. Peace, justice and strong institutions

Promote peaceful and inclusive societies for sustainable development, provide access to

justice for all and build effective, accountable and inclusive institutions at all levels

17. Partnerships for the goals

Strengthen the means of implementation and

revitalise the global partnership for sustainable

development

2. Zero hunger

End hunger, achieve food security and improved nutrition and promote sustainable agriculture

3. Good health

and well-beingEnsure healthy lives and

promote well-being for all at all ages

4. Quality education

Ensure inclusive and equi-table quality education and promote lifelong learning

opportunities for all

5. Gender equality

Achieve gender equality and empower all women

and girls

6. Clean water

and sanitationEnsure availability and

sustainable management of water and sanitation for all

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profoundly change society at a local to interna-tional level.

It is interesting and encouraging that these goals tackle the big picture and highlight the importance of international development. The approach that the Agenda takes is a good reflec-tion of the interpretation of sustainable devel-opment that is described by the Work Group in Chapter 2.

For goal number 7, ensuring access to afford-able, reliable, sustainable and modern energy for all, Sweden has an important role to play internationally in terms of exporting technolo-gy and knowledge. Sweden is one of the leading countries in the EU, and among the best globally, in terms of the share of renewable energy in its energy system (Christian Kroll, 2015). It is there-fore difficult today to determine how the SDG commitments will concretely affect Sweden’s ef-forts in the energy sector.

The Swedish government is keen for Sweden to be at the forefront. According to the govern-

ment, there are two reasons for this: firstly, that it is morally the right thing to do and we have a responsibility to people throughout the world, but also for future generations, and, secondly, it is economically smart. It will be Swedish com-panies that develop the new technologies and new solutions that the world is crying out for to reduce carbon emissions and Sweden benefits from being a country at the forefront of climate adaptation (Stefan Löfven, 2016).

The sustainability goals will be reflected in Swedish policy and EU policy, although it is not yet clear how. The 2030 agenda is not legally binding, but Sweden has, together with eight other countries (Germany, Brazil, Colombia, South Africa among others), committed to lead-ing the efforts to implement it. Three ministers within the Swedish government share respon-sibility for its implementation and a delegation has been formed. It is also too early to say what impact the UN's sustainability goals will have on Sweden’s environmental quality objectives.

ENERGY AND CLIMATE TARGETS IN THE EU AND SWEDEN

The EU’s climate and energy targets To tackle climate change and air pollution, re-duce dependence on imported fossil fuels and to have competitive energy prices, the EU has set the following climate and energy targets for 2020:

• 20 percent reduction in greenhouse gas emissions compared with 1990 levels

• 20 percent of energy shall come from renewable sources

• 20 percent increase in energy efficiency compared to the Reference Scenario (EU, 2010)

• 10 percent renewable energy in the transport sector

The EU has these targets for 2030:• 40 percent reduction greenhouse gas emissions

compared with 1990 levels• 27 percent of energy from renewable sources• 27 percent increase in energy efficiency

compared to the Reference Scenario

The goal is to achieve a more competitive, secure and sustainable energy system and to encour-age private investment in grid infrastructure and fossil-free technologies. The EU has also set the target of reducing greenhouse gas emissions by 80 percent by 2050 (EU, 2016).

Sweden's targetsThe main targets of the Swedish climate and en-ergy policy for 2020 are (Swedish Parliament, 2008):

• 40 percent reduction in greenhouse gas emissions compared with 1990 levels for emissions not included in the EU Emissions Trading System

• 20 percent less energy input per unit of GDP than in 2008

• 50 percent of energy use shall be from renewable energy

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Sweden aims to have a fossil-free vehicle fleet by 2030. The vision is also for Sweden to have a sustainable and resource-efficient energy system with zero net emissions of greenhouse gases by

2050. It is in light of these targets that the Elec-tricity Production Work Group has been work-ing on the premise that electricity generation in Sweden will be fossil-free by 2050.

THE 16 NATIONAL ENVIRONMENTAL QUALITY OBJECTIVES

The overall goal of Swedish environmental pol-icy is to be able to pass on to the next genera-tion a society in which the major environmental problems in Sweden have been solved without increasing environmental and health problems beyond Sweden’s borders. This means that the whole ecocycle should be resource efficient, natural resources should be well managed, the share of renewable energy should be high, and energy use should be efficient. In addition to

this overarching, so-called generational goal, are sixteen national environmental quality ob-jectives that Sweden wishes to achieve by 2020 (EPA, 2016), as illustrated in Figure 3.

Below is a description of the environmental quality objectives that are judged to be most af-fected by the electricity system. All of the con-clusions are based on the Swedish Environmen-tal Protection Agency’s 2015 detailed evaluation of the environmental objectives.

Figure 3: Sweden’s Environmental Quality Objectives

1. Reduced climate impact 2. Clean air 3. Natural acidification only4. A non-toxic environment 5. A protective ozone layer 6. A safe radiation environment 7. Zero eutrophication 8. Flourishing lakes and streams9. Good-quality groundwater 10. A balanced marine environment,

flourishing coastal areas and archipelagos 11. Thriving wetlands 12. Sustainable forests 13. A varied agricultural landscape 14. A magnificent mountain landscape 15. A good built environment 16. A rich diversity of plant and animal life

Illustration: Tobias Flygar

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The objective of reduced climate impact means that the concentration of greenhouse gases in the atmosphere should be stabilised at levels, which ensure that human activities do not have a harmful impact on the environment. This means that the global average temperature rise is limited to a to a maximum of 2°C above pre-industrial levels and that the concentration of greenhouse gases in the atmosphere are sta-bilised in the long term at no more than 400 ppm of carbon dioxide. This objective will not be achieved by 2020 with existing and agreed policy instruments and measures. The trend is negative because the global level of greenhouse gases is increasing, mainly due to the use of fos-sil fuels for electricity and heat generation, in-dustrial processes and transportation.

Clean air means that the air must be clean enough not to represent a risk to human health or to animals, plants or cultural assets. There should be low concentrations of air pollutants such as particles and nitrogen dioxide. This ob-jective is not on track to be met but the trend is positive because concentration levels are de-creasing.

When we have natural acidification only, the acidifying effects of deposition and land use must not exceed the limits that can be toler-ated by soil and water. This is objective is not on track to be met but the trend is positive be-cause the deposition of acidifying substances is decreasing.

A non-toxic environment means that the en-vironment should be free from man-made or extracted compounds that represent a threat to human health or the ecosystem. This objective is not on track to be met either and no clear trend is visible. Some toxic pollutants are decreasing but globally the spread of dangerous substances is increasing.

In a safe radiation environment human health and biological diversity is protected against the harmful effects of radiation, which means re-stricting individuals' exposure to harmful ra-diation and restricting emissions of radioactive substances into the environment. This objective has nearly been met. The trend towards safe ra-diation is positive in several areas, apart from exposure to ultraviolet radiation.

Flourishing lakes and streams must be eco-logically sustainable and have structures and watercourses that preserve habitats and provide spread pathways for flora and fauna. Balanced marine environment, flourishing coastal areas and archipelagos must have biological diversity. The sea must have a sustainable productive ca-pacity, and coasts and archipelagos must con-tain recreational, natural and cultural assets. These two objectives will not be met and there is no clear trend. For example, more migration barriers need to be removed and conflicts be-tween the conservation and the utilisation of coastal areas resolved.

Sustainable forests means that the value of forests for biological production must be pro-tected, at the same time as biological diversity as well as cultural heritage and social values are safeguarded. The objective will not be met and there is no clear trend, as many species are endangered even though more forests are being protected. Environmental considerations are be-ing taken more into account during logging but farming methods that don’t involve deforesta-tion need to be used more.

The objective of a magnificent mountain land-scape means that the mountains should present a high originality in terms of biodiversity. Ac-tivities must respect recreational values, and natural and cultural assets. The character of the mountain environment in terms of a pristine magnificent landscape with expansive undis-turbed areas must be preserved. This objective will not be met and the trend is heading in the wrong direction, partly because wind power is having a negative impact on the environment.

The objective of a good built environment means that buildings and amenities must be located and designed in such a way as to pro-mote sustainable management of resources. Infrastructure for energy systems etc. must be adapted to people's needs, reduce the use of re-sources and energy as well as its impact on the climate and take account of natural and cultural assets, aesthetics, health and safety. Renewable energy should predominantly be used and waste recycled. This objective is not being met but the trend is positive, partly due to the growing num-ber of energy-efficient buildings.

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A rich diversity of plant and animal life means that biological diversity must preserved and used sustainably. Species habitats and ecosys-tems must be safeguarded. Species must be able to survive in long-term viable populations with sufficient genetic variation. This objective will also not be met by 2020 and the trend is nega-tive, partly because of the lack of consideration when resources are used and not enough protec-tion of natural environments.

The other environmental objectives are not considered to be affected as much or as directly by electricity generation: a protective ozone lay-er, zero eutrophication, good-quality groundwa-ter, thriving wetlands and a varied agricultural

landscape. The only one of these objectives that is on track to be met is a protective ozone layer, thanks to the successful international agreement to phase out ozone-depleting substances (the Montreal Protocol).

This review shows that most of the environ-mental quality objectives will not be met. One important factor is the time frame, as the ob-jectives are formulated as a generational targets that need to be met by 2020. The wording of certain objectives is also open to debate in terms of whether they are actually attainable. How-ever, the overall conclusion is that it should be possible to meet more of the targets if the time frame was extended.

ECONOMIC AND ADMINISTRATIVE INSTRUMENTS IN ENVIRONMENTAL, CLIMATE AND ENERGY POLICY

There are a large number of taxes and other policy instruments that affect the electricity industry in Sweden. Below, we outline some of the environmental, climate and energy policy instruments that are of most importance to the electricity industry. In addition to these, there are other taxes and incentives that may have en-vironmental and climate impacts.

Taxes and duties• Carbon tax and energy tax for fuel, in principle,

is not levied on the generation of taxable electricity. However, if fossil fuels are used in the generation of electricity, a flat rate of tax is applied to electricity used internally.

• Sulphur tax is payable on emissions of sulphur dioxide from the combustion of solid fossil fuels and peat. The tax is not imposed if the sulphur content of the fuel is less than 0.05 percent.

• Nitrogen oxide tax reduces emissions of nitrogen oxides from large combustion plants and includes plants with boilers that produce more than 25 GWh per year. The government refunds a large proportion of the amount paid to the taxpayers in proportion to their share of total generation.

Emissions tradingThe aim of emissions trading is to reduce green-house gas emissions in the EU in a cost-effec-tive way. Countries and companies are able to choose between implementing emission reduc-tion measures internally or purchasing emission permits whereby emissions are offset elsewhere. There are a limited number of permits, which decreases each year. The EU’s Emissions Trad-ing Scheme started in January 2005 and covers around 13,000 facilities involved in industrial production and energy generation in the EU, which accounts for about 40 percent of the EU's greenhouse gas emissions. The present overall cap of emissions is decreased by 1.74 percent each year. A review of the regulatory framework for the Emissions Trading System is currently underway in the EU to set the regulation for the period 2021–2030. After 2021, the European Commission proposes that the rate at which the supply of permits declines is increased to 2.2 percent per year.

The Swedish Environmental CodeThe Swedish Environmental Code came into force on 1 January 1999 and is a coordinated, broader and more stringent environmental legis-

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lation for sustainable development. The purpose of the code is to promote sustainable develop-ment to ensure a healthy and sound environment for present and future generations. It affects all types of measures that may be of importance to those interests the code is intended to protect. This is regardless of whether they are part of a private individual's daily life or some form of business activity. The Environmental Code af-fects the building of new larger electricity gen-eration plants and network facilities, as they must be tested against the Environmental Code. When the authorities issue an operation with a permit, they also attach a set of environmental requirements (conditions) on the business that must be satisfied in order for the business to be allowed to operate.

The fourth chapter of the Environmental Code also regulates the expansion of new hy-dropower, with defined restrictions for a num-ber of stretches of river and prohibitions for the construction of hydropower on the four national rivers; the Torne River, Kalix River, Pite River and Vindel River.

Nuclear and radiation regulationThe general principles for nuclear safety and ra-diation protection are laid out in the Swedish Nuclear Activities Act and the Radiation Protec-tion Act. The Environmental Code also address-es this area, and issues relating to radiation, with regard to both ionizing and non-ionizing activity, are covered by provisions in the Code. A nuclear facility may not be owned or oper-ated without a licence issued under the Nuclear Activities Act and the Environmental Code. Two separate permits are therefore needed, is-sued under two different laws, in order to own and operate a nuclear facility. The provisions of these laws are supplemented by government authority regulations and other regulations that contain more detailed provisions.

The construction of new nuclear facilities is regulated by the Environmental Code through an amendment that was added in 2010 as a re-sult of an energy policy agreement made by the government at the time. The legislation means that the government may allow new nuclear power facilities, only if the new reactor is being

built in the same place and replaces a reactor which has been in operation after 31 May 2005 and which is permanently shut down at the time of commissioning of the new reactor.

The electricity certificate systemThe electricity certificate system was intro-duced in Sweden in 2003 as a support system to increase renewable electricity generation. In 2012, a common electricity certificate market was set up for Sweden and Norway. The aim of the certificate system is for the two coun-tries to increase their combined production of electricity from renewable sources by 28.4 TWh between 2012 and 2020. For the part financed by Swedish customers, the aim is to increase re-newable electricity generation by 30 TWh from 2002 to 2020. The electricity certificate system is a market-based support system to increase the generation of electricity from renewable sources and peat in Sweden. The energy sources that are entitled to the certificates are wind, certain hy-dropower, biofuels, solar, geothermal, wave and peat in CHP plants. The basic principle of the system is that producers of electricity receive a certificate from the Government for each MWh generated from renewable resources. Mean-while, electricity companies have an obligation to purchase a certain number of certificates set in proportion to total use and sales of electricity, known as a quota obligation. By selling electric-ity certificates, producers get extra income in addition to revenues from electricity sales. This increases the competitiveness of renewable en-ergy against non-renewable sources.

Government grants for solar cellsGovernment grants to support investment in so-lar cells2 was introduced in 2009 and strength-ened in the 2016 budget. All types of players can receive the grants: companies, public organisa-tions as well as private individuals.3 The exact nature of the grant has changed slightly over the years.

It is most likely that this support has helped to promote investment in solar power, although other incentives for solar generation, such as en-ergy tax exemptions for self-generated electric-ity, electricity certificates and other factors have

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made solar cells more attractive to invest in. It is difficult to say specifically how much difference the solar cell grants have made. The support promotes new investment in a type of energy generation that is low during the times of the year when the power output is highest (in win-ter). Therefore, it does not help much to manage the power balance during the most critical times and there is a risk that in the long-term, this type of support will weaken the power balance (A Sweco report for Electricity Crossroads 2015).

Legislation regarding concessions, including environmental assessment of the electricity gridThe construction of power lines in Sweden re-quires a permit, in the form of a concession. Applications are made to the Swedish Energy Markets Inspectorate. The permit process is intended, among other things, to avoid power lines being built in parallel and to minimise impact on the environment and public health. An environmental assessment is carried out as part of the permit application process and in-volves a consultation process and completion of an environmental impact assessment in ac-cordance with the Environmental Code. Permits are required for all power lines with a voltage, strength or frequency that could be dangerous to people or property. Some power lines, known as non-concessionary networks, are exempt from the permit requirement. Concessionary net-works are divided into two types: network con-cessions covering grids and regional networks, where the permit is valid for a single power line with a fixed route, and network concessions for areas that cover local networks and permission is given to distribute electricity in a particular area.

Standards in the product and energy sectorIt has generally been shown that standards, es-pecially at an international level, are an effec-tive way to raise the environmental standards of products. The EU’s ECO-design Directive, which covers a variety of product groups, has been shown to increase energy efficiency and, thereby, indirectly reduces the impact of using

the products on the climate and environment.According to the ISO’s annual statistics, the

number of certificates issued for the different en-ergy management system standards continues to increase. The most noticeable increase is in the standard on energy management systems, ISO 50001, which may be a result of the Energy Ef-ficiency Directive that requires large companies to undertaken energy audits. In total, 6.778 cer-tificates have been issued worldwide, of which 87 were issued in Sweden. Interest in ISO 50001 may also reflect the growing importance of sus-tainability in terms of energy savings and envi-ronmental impact (www.sis.se, 2015).

Environmental management systems also pro-vide a systematic framework and help compa-nies to assess the environmental impacts (both large and small) of their activities as well as their energy use. A high percentage (80%) of large Swedish companies (with over 250 employees) use the environmental management system ISO 14001. According to the Swedish Agency for Economic and Regional Growth (Swedish Agen-cy for Economic and Regional Growth, 2014) about 55 percent of medium-sized companies (50–249) have introduced the system and an ad-ditional 10 percent have introduced a simplified environmental management system (Richard Almgren, Linköping University). According to the Swedish Standards Institute, around 4,000 companies and organisations in Sweden are cer-tified for environmental standards. According to Swedish Energy, the majority of Swedish energy companies are certified.

Environmental governance in the industry has grown rapidly in recent years and nowadays companies are often way ahead of legislation in the environmental field (Almgren, 2015).

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5. Climate change affects the environment and the electricity systemHIGHER TEMPERATURES, MORE PRECIPITATION AND HIGHER FOREST GROWTH

The effects of climate change on temperature are greater in the northern hemisphere and over land. Even if the temperature rise can be kept below 2 degrees at a global level, the temperature in Sweden is, nevertheless, rising more. A possible temperature increase of 2–6 degrees is predicted in Sweden, according to the Swedish Meteoro-logical and Hydrological Institute (SMHI), the Swedish Environmental Protection Agency and the Swedish Energy Agency, whose final report was presented in the autumn of 2014. The report

describes various scenarios based on climate models. (Strandberg, G., Bärring, L., Hansson, U. Jansson, C., Jones, C., Kjellström, E., Kolax, M., Kupiainen, M., Nikulin, G., Samuelsson, P., Ullerstig, A. and Wang, S., 2014)

Measurements today show that, globally, there has been a warming of about 0.8 degrees since the 1880s. The temperature rise in Swe-den has been about twice as large as the change in the global average temperature since the late 1800s. Although we are getting stronger heat

Figure 4: Illustration of how temperatures may change based on SMHI’s climate scenarios. Source: SMHI

Lowest day(°C)

Highest day(°C)

Whole season(°C)

Whole season(°C)

Winter Winter Summer Summer

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waves in the summer in Sweden, the biggest dif-ference in temperature occurs during the winter months, see Figure 4.

Precipitation is going to increase in Sweden, both in the summer but particular in winter. The amount of rain is increasing between 10–25 per-cent. This increase in precipitation mainly occurs during the summer in the north and may decrease in the south. In the south east of Sweden, how-ever, there will be a decrease in precipitation,

which, in combination with increased tempera-tures, will lead to drier conditions. Snowfall will decrease significantly and precipitation will take the form of rain instead due to the warmer tem-peratures. The spring floods will also decrease as there will be less snow to melt, see Figure 5.

Wind speed does not seem to be affected to any great degree, or rather there is no data in the climate models to allow any conclusions to be drawn.

POSSIBLE IMPACTS ON ELECTRICITY GENERATION

An increase in precipitation creates improved conditions for increased hydropower genera-tion. At the same time, an increase in temper-ature will reduce the need for heating, which reduces the potential for CHP, and also reduces the need for electricity for heating. This aspect has been taken into account in the project re-port on the Future of electricity use (Electric-ity Usage Work Group, Electricity Crossroads, 2015). More biomass will become available in Sweden as growth increases, which the Swedish

Forest Agency includes in its estimates on future growth (Svante Claesson, Karl Duvemo, An-ders Lundström, Per-Erik Wikberg, 2015). At the same time, it may become more expensive to extract as less ground frost makes the forest more difficult to access. Wind speed is not ex-pected to increase significantly and, therefore, there will be no need to increase the robustness of the transmission or distribution networks. As a result, wind power will therefore not be significantly affected.

Figure 5: Illustration of how precipitation levels may change based on SMHI’s climate scenarios

Per year (%) Per week (%) Per day (%) Heavy precipitation (days)

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6. Important environmental issues for the electricity system in 2050

Here we present a brief review of the environ-mental impact of the different energy sources as well as any supplementary systems that may be needed in the different electricity generation alternatives for 2050. Table 1 below provides an

overview of the four alternatives (based on the average scenario) that have been developed by the Electricity Crossroads project (Electricity Production Work Group, Electricity Crossroads, 2016).

SOLAR POWER

Solar cells are a form of electricity generation that have the least direct impact on the environ-ment as no greenhouse gases are produced dur-ing their use and, when placed on buildings or within the built environment, they do not take

up any additional physical space. When solar cells are integrated into the construction of a building, they can replace other materials, such as glass panes or roof structures and help to achieve a more efficient use of materials.

Table 1: Overview of the generation alternatives (average scenario)

Generation alternative 1 2 3 4

Technologies for electricity generation

More solar and wind

More biopower

New nuclear power

More hydropower

Hydropower, dams 32.5 32.5 32.5 52.5

Hydropower, run-of-river 32.5 32.5 32.5 32.5

Wind, onshore 55 40 20 35

Solar PV on roofs 15 5 5 5

Nuclear plants 0 0 50 0

Total CHP consisting of: 25 50 20 35

Biomass-CHP (electricity) 23 48 18 33

Waste-CHP (electricity) 2 2 2 2

Total generation (TWh) 160 160 160 160

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Any greenhouse gas emissions are largely indirect and take place primarily during the manufacturing process, which is why assump-tions about the manufacturing method of the solar cells, their longevity and production play a major role when emissions are calculated and distributed per kWh. As the majority of the emissions are indirect, there is potential to pro-duce solar cells in a more low-carbon way in the future. If it was possible to recycle a large part of a solar panel, it is likely that the emissions of the next generation of solar cells would be even less.

Thin film solar cells require less energy to manu-facture and less resources overall, but often include rare and hazardous materials, such as rare earth

metals and cadmium. Silicon solar cells are more energy-intensive to manufacture and require more resources overall, but are based on one of Earth's most common substances (Laleman, Albrecht, Dewulf, 2010) (Varun, Bhat, Prakash, 2009).

Roof-mounted silicon solar cells are the tech-nology that the Electricity Production Work Group has selected to be part of the Swedish en-ergy system in 2050. As most of the emissions are indirect, it is difficult to assess the impact that the future generation and use of silicon solar cells will have on the environment. It very much de-pends on where the solar cells are manufactured and the extent to which reliance on fossil fuels has decreased in the global energy mix by then.

WIND POWER

Wind power has a low carbon footprint and, when positioned correctly, a low direct environ-mental impact. However, wind turbines involve a physical change to the landscape that affects plants, animals and humans. In some cases, sen-sitive habitats can be disturbed and even birds and bats may be affected (Vindval, 2015). In ad-dition, wind power can be experienced as disrup-tive to the landscape and some people react nega-

tively to the noise. The largest emissions related to wind power occur during the manufacturing and construction stages, some of which are indi-rect and depend on the country of manufacture and methods used (Ecofys, 2015). Many wind turbines also use rare earth metals. If wind pow-er is to become sustainable in the long-term, it is essential that use of these be phased out in the fu-ture and they are replaced with other materials.

BIO-COMBINED HEAT AND POWER (CHP)

A combined generation of electricity and heat is generally an effective utilisation of resources, and biofuels creates conditions to be sustainable and climate neutral in the long term. In terms of sustainability, the origin of the biomass is very important and in the More bioenergy alterna-tive it is assumed that primarily Swedish forestry waste that will be used. In this alternative, it is also assumed that it is power and heat that is produced, i.e. there is no bio-based condensing power that needs cooling. In the condensing process, the discharge of cooling water can also have an environmental impact.

The Work Group’s assumptions are also based on advances in CHP-technology to en-able the efficient use of bio resources and achieve significantly higher capacity with top-spool technology. This technology is based on an integrated gasification process specifically developed for biofuels. Top-spool needs some further development and to be demonstrated on an industrial scale before it can be launched more widely. If this technology is introduced, it could, of course, significantly increase resource efficiency, which would have positive environ-mental benefits.

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The amount of biomass that can be extracted from the forests and what it will be used for in order to be climate-neutral, is discussed further in the section on Biomass will be increasingly important but creates challenges for biological diversity in Chapter 9.

Particles and nitrogen oxidesIn electricity and district heating generation, small particles emissions mainly occur during the combustion of biomass. There has been an increase in these types of emissions since 1990 as the use of biofuels in district heating has ex-panded. However, fuel use has increased faster than emissions, which is due to better cleaning equipment in the plants. Small particle emis-sions from the generation of electricity and dis-trict heating were about 3,200 tonnes in 2014, i.e. about 16 percent of total emissions, which in

2014 was 20,500 tonnes. This is a decrease of 42 percent since 1990 (EPA, 2016).

Nitrogen oxide emissions are at high levels in many areas in Sweden. Electricity and district heating sector currently account for less than 10 percent of the nitrogen oxide emissions in Sweden, despite a strong increase in production in recent years. According to the Swedish Environmental Protection Agency, emissions from electricity and district heat generation was reduced during the period 1990 to 2014, despite the fact that biofuel supply more than doubled during the period. (The Environmental protection agency, 2016).

Nitrogen oxide emissions come mainly from transportation (40 percent), industry (22 per-cent) and machinery used in different sectors that account for 16 percent of total emissions, which in 2014 was 136,000 tonnes (Swedish En-vironmental Protection Agency, 2016).

WASTE

Assessing the environmental impact of waste is complex and depends a lot on the indirect impacts on society. Waste incineration comes in fourth place in the EU’s waste hierarchy (Waste Direc-tive 2008/98/EC, 2008), but it is generally better to extract energy from waste than to dispose of it, if recycling is not an option (Swedish Environ-mental Protection Agency, 2015). However, there is a risk that a large investment in waste incinera-tion may lead to so-called lock-in effects, where a dependency on waste as a fuel reduces the incen-tive for action higher up the waste hierarchy, and stops waste being reduced, reused and recycled.

(Corvellec et al, 2013). If environmental impact was directly associated with its original area of use, the indirect impacts on society would not be taken into consideration, for example, the sub-stitution effects in the case of incinerated waste could have replaced the production of primary materials by better recycling systems. If food waste is burned, then residual products from, for example, anaerobic digestion and compost-ing, can’t be used as fertiliser. More food waste is being biologically recycled in Sweden, but there is still a lot more that could be done. (Swedish Environmental Protection Agency, 2015).

NUCLEAR POWER

Nuclear power is a type of electricity generation that has a low climate impact and the advantage that, in normal operation, it produces stable and reliable electricity. The disadvantages of nuclear power include difficulties and risks associated

with the handling of radioactive materials and the risk of accidents, which could have major consequences.

In the "New nuclear power" alternative, the Production Work Group has made the assump-

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tion that the reactors that will be built when the old ones are shut down will be Generation III + ones. Like reactors today, this type of reactor de-pends on a finite resource of uranium. The two categories of impact most associated with nuclear power are the use of uranium and the cost of ac-cidents. Nuclear power can also have impacts on the local environment during the mining of ura-nium, the disposal of waste, and when cooling water is discharged into lakes and seas. Corre-spondingly, with the generation of solar power, nuclear power can give rise to emissions during extraction, transportation and processing.

From an environmental and resource point of view, fourth generation nuclear power, Gen IV, has great advantages, compared with today’s reactors and Gen III +. Above all, environmen-tal impact from the use of uranium would be significantly reduced if Gen IV was adopted, as the technology is fuelled using existing nuclear waste and no new uranium therefore needs to be extracted. The risk of accidents is also reduced considerably, compared to today's reactor sys-tems, as well as the time that the waste needs to be contained for repository.

HYDROPOWER

The environmental benefits of hydropower are low greenhouse gas emissions and because it can be easily regulated, it can help to integrate more intermittent generation into the system. At the same time, the impacts on the aquatic environ-ment and surrounding nature during construc-tion and operation are irreversible, and hydro-power is probably the type of power that does most direct damage to biological diversity. Ex-amples of its negative impacts are dams, dry fur-rows, changes to water flow, regulated lakes and major physical changes to the natural course of waterways due to the construction of channels. Along with obstructions to fish migration routes and obstructions to the transport of organisms and organic material, changes to flow patterns and water levels, these all result in significant changes both at a local and water system level, (Naslund et al, 2013).

It is difficult to make an overall assessment of the impact of hydropower, as the largest envi-ronmental impacts depend on the composition of the local ecosystem (Singh et al, 2013). There-fore, it is essential to take local conditions into account when developing proposals for meas-ures such as fauna passage and fish ladders.

In the More hydropower alternative, the Work Group makes the assumption that rivers and streams that are currently protected will be further exploited to varying degrees, which

would require a change of legislation and lead to the irreversible loss of unique Swedish environ-ments.

Run-of-river hydropower plantsExpansion of run-of-river hydropower plants could be a way to avoid disturbing fish migra-tion routes. In run-of-river hydropower plants, energy is directly extracted from the flow of the river and uses a similar technology to that used for wind power: a turbine that is powered by the flow of the water and is connected to a gen-erator.

According to the Uppsala University (La-lander, 2013), Sweden's rivers should be able to provide up to 5 TWh from run-of-river hy-dropower plants. The impact of the turbine blades on the environment below the surface of the water is not yet fully understood, but as they spin much slower than wind turbines, they are not believed to harm fish. The aim is that run-of- river hydropower plants will generate electricity at a high effieciency in slow moving water. Generation in run-of- river hydropower plants cannot be regelated and therefore can-not actively contribute to the power balancing/balance. However, if they are installed below a hydroelectric plant that can be regulated, run-of- river hydro plants could indirectly help to increase capacity.

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GAS POWER FOR POWER BALANCING

In the More solar and wind alternative, the Work Group’s assumes that a large percent-age of electricity will be produced from energy sources that fluctuate over time. To guarantee a supply of electricity to consumers, a certain per-centage of fast start electricity generation, such as gas power, is needed to compensate for power fluctuations in the Swedish electricity system, if this cannot be solved using demand flexibility or imports from neighbouring countries.

The environmental impact of using of gas power as a balancing power largely depends on the type of gas used. In order for the electricity generation to be carbon neutral, the generation must either be done using renewable gas or by

using CSS to capture the carbon dioxide emis-sions, if fossil gases are used. Emissions from the operation of combined gas plants using natural gas of the type found in Sweden are 350–550 CO2-eq/kWh electricity, while gas turbines used just for power generation emit around 620 g CO2-eq/kWh electricity. If generation could be done using biogas instead, no fossil carbon diox-ide emissions would occur during combustion, but the entire life-cycle emissions for biogas would be around 17–70 g CO2e/kWh electricity depending on the raw material that was used (slurry, household waste, fertiliser, sugar beet etc.) (Gode J, Martinsson F, Hagberg L, Öman A, Höglund J, Palm D, 2011).

IMPORTS AND EXPORTS

The need to import electricity varies between years and throughout each year. Sometimes, Sweden has a surplus and can export some of its electricity generation (such as in 2012 when a lot of water was stored in hydropower plants’ res-ervoirs). Other years, there may be a shortage of electricity, which means Sweden has to import electricity (such as in 2010, when it rained less). It can also vary throughout the year. In 2014,

Sweden’s net exports were 15.6 TWh, which is the second largest export ever after the record year of 2012, when 19.6 TWh was net exported (Swedish Energy Agency, 2015). The size of the environmental impact from imported electric-ity in 2050 will depend on how far Europe has come in its energy transition. Figure 6 below shows how CO2 emissions intensity in Europe has changed over time.

0

100

200

300

400

500

600

700

800

2013

2012

2011

2010

2009

2008

2007

2006

2005

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g CO2/kWh Figure 6: CO2 intensity in Europe (EU 28) from 1990 until 2013.

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THE TRANSMISSION AND DISTRIBUTION SYSTEM

In the transmission system, the most environ-mental cost occurs during the materials phase (the extraction of raw materials and generation of materials) and the construction phase (ex-cavation, construction and transportation of materials) (see Figure 7). The operational phase only makes a small contribution of about 10 per-cent in the two systems involving overhead lines. The decommissioning phase only has a marginal effect on the environmental cost. In the final valuation of all the technologies, resource de-pletion accounts for 85–95 percent of the total environmental cost. However, biodiversity has very little impact on the final valuation. This is because in a life-cycle assessment of the envi-ronmental impact, the number of species that disappear in one area is very small (in the order of hundreds of species) (Svenska Kraftnät, Ka-rin Lövebrant, 2012). The final valuation of all the studied technologies/components that can be found in distribution and transmission systems is shown in Figure 7 below.

A number of studies in the Nordic countries (Svenska Kraftnät, Karin Lövebrant, 2012) show that the greatest environmental impact in

the transmission and distribution system comes from electricity generation to replace losses in the grid.

In life-cycle assessments (LCA) conducted by Vattenfall, both the local and the regional grid contribute to acidification, the greenhouse effect, eutrophication, ozone depletion and the forma-tion of ground-level ozone (Richard Jernlås, Vat-tenfall, 2008). The results indicate that transmis-sion losses account for the largest part (despite the Swedish energy mix being used for loss valu-ations), but that transportation and construction equipment also play a large role. In regional net-works, copper and aluminium are almost com-pletely recycled, provided that overhead lines are predominantly used. In local networks that have a large amount of underground cable, a lot less metal is recovered. The conclusion is that if there was a transition to a larger proportion of storm-proof underground cables in the grid, the recycling rate of metals would decrease unless recycling methods for underground cables were developed. In terms of recovering iron, losses oc-cur because, when lines are taken out, the metal in certain types of post supports is left behind.

Figure 7: How parts of the life-cycle contribute to the environmental costs for different types of electricity network components. Source: Svenska kraftnät, processed by the Climate and Environment Work Group

MSEK0 10 20 30 40 50 60 70 80

of which decommissioningof which operationof which constructionof which materials

Reactor (1 pc.)

Transformer (1 pc.)

Cable bay (1 pc.)

Undersea cables, direct current (HVDC, per km)

Underground cables, direct current (HVDC, per km)

Overhead cables, direct current (HVDC, per km)

Underground cables, alternating current (per km)

Overhead cables, alternating current (per km)

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USAGE

The report on Future Electricity Use by the Elec-tricity Usage Work Group (Electricity Usage Work Group, Electricity Crossroads, 2015) in-dicates that electricity use will be slightly higher than today, but that, in certain applications, elec-trification is likely to substitute fuels. Above all, the use of fuel in smaller, scattered sources, such as transportation, should reduce, while fuel will continue to be used in larger facilities, where the environment impact is easier to control.

the household and service sector: House-holds currently use mainly electricity or district heating for heating and no major changes are expected in this sector, just on-going efficiency improvements. One potential environmental im-pact could come from an increased demand for battery solutions.

industry: Electricity can replace fuels, particu-larly oil and gas, for heating in certain process-es. Swedish industry is currently more energy in-tensive than in the corresponding international facilities, as Sweden has historically had good access to electricity at competitive prices (Elec-tricity Usage Work Group, Electricity Cross-roads, 2015). In other countries, it is common for natural gas to be used for heating and the production of process inputs.

Larger process industries often include a num-ber of process steps or clusters of interconnected industrial activity, so that resources and energy can be used in an integrated way. Fuel use in the chemical industry, the forestry industry and to some extent the steel industry is often based on the secondary use of raw materials in production to make maximum use of the energy content of

the raw materials. This means that the potential for further substitution of fuels for electricity is limited. If electricity replaces oil for heating, the main environmental impact is a reduction in car-bon dioxide, nitrogen oxide and particle emis-sions. If gas substitutes oil, this primarily helps to reduce particle and nitrogen oxide emissions, and a certain amount of greenhouse gases.

Total greenhouse gas emissions in 2014 were about 54 million tonnes of carbon dioxide equivalent (Swedish Environmental Protection Agency, 2016). Hydrogen could be used to re-duce the use of iron ore, and, as a result, reduce carbon dioxide emissions by up to 10 percent per year. Up to 20 TWh of electricity would be needed for hydrogen generation (Electricity Us-age Work Group, Electricity Crossroads, 2015). But this requires a technological leap.

transport: The environmental impact could be greatly reduced if more electricity was used in the transport sector. Today, around 30 TWh of petrol and 40 TWh of diesel are used in the transport sector. It is estimated that electricity use beyond 2030 will be around 10–16 TWh, which could be equivalent to half of today's fuel use. The environmental impacts of using fuel for transportation are mainly carbon diox-ide, nitrogen oxide, particles and hydrocarbon emissions. Halving the use of fossil fuels would reduce carbon dioxide emissions by about 10 million tonnes per year and nitrogen oxide emis-sions could be reduced by almost 30,000 tonnes per year, i.e. around 20 percent. Increased use of electricity-based transport would also be posi-tive in terms of noise because transportation is the largest source of noise pollution.

THE IMPACT OF DIFFERENT TYPES OF GENERATION ON THE CLIMATE

Different types of generation have different im-pacts on the climate, both during the construc-tion and operational phases. Figure 8 shows

greenhouse gas emissions from a life-cycle per-spective for different electricity generation tech-nologies based on LCA data (Gode J, Martins-

32

son F, Hagberg L, Öman A, Höglund J, Palm D, 2011). The inset figure is a close-up of the electricity generation technologies with the low-est emissions. The emissions are divided by the construction and operational phases. The fig-ures are based on data for current conditions. As shown in the graph, in the operational phase, the emissions are dominated by non-renewable power sources, while in the construction phase, the dominant source of emissions are renewable energies. With technological developments and lower emissions from supplementary energy, particularly in other countries, there is great potential to reduce emissions in the future, par-ticularly in the manufacturing phase. For emis-sions that occur in the operational phase, the potential for substantial reductions is not quite as great but relate mainly to efficiency improve-ments, better performance when using supple-menatary energy in the operational phase and for certain types of carbon capture and storage (CCS).

The emissions that occur during the opera-tional phase of waste-CHP plants will depend largely on the amount of fossil fractions (e.g. plastics) in the waste and how emissions are al-

located between the energy system and waste management. Because of this uncertainty, the emissions from the operational phase of waste-CHP are marked in a lighter blue in the graph.

The graph is based on a traditional life-cycle analysis, i.e. emissions over the entire life-cycle are documented and then the emissions per functional unit are calculated. In the graph, the functional unit is 1 kWh of electricity. However, this way of describing the emissions during the electricity generation life-cycle, does not take into account when the emissions occur. For the climate, the timing of the emissions is impor-tant. It is therefore interesting to study when the emissions occur during the life-cycle and con-duct a dynamic life-cycle analysis for each of the different types of energy. Such an analysis has been carried out as part of a research pro-gramme called North European Power Perspec-tives (Gode J, Adolfsson I, Hansson J, 2014). It appears that emission peaks occur during the construction of new power plants. Traditional life-cycle analyses that do not take into account when these peaks occur will underestimate the climate impact in the short term and overesti-mate it in the long term.

Greenhouse gas emissions, g CO2e/kWhel

Greenhouse gas emissions, g CO2e/kWhel

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Figure 8: Greenhouse gas emissions from a life-cycle perspective for different electricity generation technologies

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ENVIRONMENTAL AND HEALTH ASPECTS OF SUPPLEMENTARY SYSTEMS

Supplementary systems refer to the technologi-cal solutions that are needed to make the basic systems (of the four different generation alterna-tives) work properly, i.e. to maintain the power balance and ensure security of supply (Electric-ity Production Work Group, Electricity Cross-roads, 2016).

Electricity storage and its environmental aspectsAccording to the reports on Sweden's future electricity generation and Sweden's future elec-tricity networks (Electricity Production Work Group, Electricity Crossroads, 2016), (Electric-ity Distribution and Transmission Work Group, Electricity Crossroads, 2016) a number of addi-tional systems will be needed to help to keep the electricity system in balance in the future. An increase in the use of weather-dependent power will result in a greater need to smooth out the electricity supply in the system, partly using energy storage, such as hydroelectric dams and batteries. Energy can also be stored using chem-ical storage, known as power-to-gas, whereby electricity is converted to gas, and the gas is used in the gas turbine when the need arises. Hydro-power can provide both seasonal and short-term storage, and its environmental impacts are de-scribed in previous chapters. Here, we are look-ing at short-term storage solutions using bat-teries, pumped energy and power-to-gas. With regard to batteries, it appears that lithium-ion technology will most likely gain the competitive advantage in the future due to rapid growth of the electric vehicle market.

Environmental and health issues relating to battery storage Lithium-ion batteries are expected to be the dominant type of battery. However, there are relatively few literature studies that discuss the environmental aspects of these batteries. Tech-nological development is progressing rapidly, so any discussions become rapidly out of date.

These types of batteries contain various forms of lithium compounds consisting of iron, cobalt,

manganese salts or other metal salts, some of which are toxic and could be questioned from both a health and an environmental point of view. (Swerea IVF Stefan Posner, 2009). The or-ganic solvents used in lithium batteries have also not been fully investigated.

A larger LCA study on batteries in 2013 by the United States Environmental Protection Agency, in cooperation with the US Department of En-ergy (United States Environmental Protection Agency, 2013), shows that it makes a difference which metals that are used. Cobalt and nickel have a greater impact on the environment and it is therefore important to develop batteries using alternative metals, such as manganese and iron. In order to reduce environmental impact, it is important that large-scale recycling takes place. Currently, only a few of the metals are recycled, but not the actual lithium and aluminium. There is also a certain scepticism about using recycled materials to manufacture new batteries. The study concludes that the recycling process must be significantly improved in order to reduce the environmental impact and energy use.

According to the United States Environmen-tal Protection Agency, the major risks associated with lithium-ion batteries from a chemical per-spective occur in the manufacturing phase, such as water pollution, and the most energy is used during the extraction of the metals.

Primary energy use in terms of the manu-facture of lithium-ion batteries is estimated at 1,780 MJ/kWh, i.e. almost 500 kWh/kWh per battery (United States Environmental Protection Agency, 2013).

Graphite can replace nickel, manganese or co-balt, which is interesting, as it is already used in the industry in various forms without resulting in any negative impact (Elforsk report). Con-tinuous technological advances are expected in the battery sector, which makes it difficult today to assess how environmental aspects will have changed by 2030 and beyond.

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The contribution of batteries to greenhouse gasesIn the literature, there are a few references to the production of metals and the impact that the ex-traction of metals has on greenhouse gas emis-sions but the reports differ considerably.

A study by the Norwegian University of Sci-ence and Technology from 2012 shows that the greenhouse effect of a 26.6 kWh battery (253 kg battery pack) amounts to 4.6 tons of CO2 equiv-alents, i.e. 170 kg/kWh or 18 kg CO2 EQV/kg (Troy R. Hawkins, Bhawna Singh, Guillaume Majeau-Bettez, and Anders Hammer Strøm-man, 2012).

Other studies come up with figures from 22 kg CO2 eq/kg (Majeau-Bettez G, Hawkins TR, Strømman AH, 2011) to 6 kg CO2 eq/kg (Notter, D.A.et al, 2010) and 9.6 kg CO2 eq/kg, respec-tively (Constantine Samaras, Kyle Meisterling, 2008). The differences are largely due to the as-sumptions that are made regarding the energy mix used in manufacturing, and the system lim-its that are set. A better understanding of the manufacturing process for batteries is therefore needed (Ellingsen, 2014). Today, the majority of lithium-ion batteries are produced in South Ko-rea and Japan, although an increasing number are manufactured in China.

The Elforsk study (Gunnar Hovsenius, El-forsk, 2009) estimates 75 kg CO2/ stored kWh electricity (Ishihara Kaoru et al. Environmental Burdens of Large Lithium-ion batteries devel-oped in Japan).

We can therefore conclude that the figures are uncertain and differ a lot. In order to re-duce greenhouse gas emissions, it is important that the energy mix used for manufacturing is fossil-free and there is a robust recycling sys-tem for the metals and chemicals used in the batteries.

The potential of metalsThe future availability of the metals is an is-sue that is also discussed in the literature. Most lithium is found in water-soluble salts, mainly in Bolivia, Chile, Argentina and China (Gunnar Hovsenius, Elforsk, 2009). The majority of pro-duction takes place today in Chile and Argen-tina. Cobalt can be found in relatively low con-

centrations in the Earth's crust and is extracted as a by-product of other metals being extracted. It comes from countries that include the Congo and is viewed as a conflict mineral. Large nickel resources can be found primarily in Australia, Brazil, Indonesia, Cuba, Canada, Russia and South Africa. Large resources of manganese are also found in South Africa and the Ukraine.

Environmental issues relating to hydropower storageThe expansion of hydropower has brought about major changes to the water system, dur-ing the construction phase as well as the opera-tional phase. It has resulted in damage to biodi-versity at a local and a water system level, due to large physical changes that affect nature's normal functions. Expanding the storage capac-ity of existing reservoirs will most likely have limited impact on the water system, apart from any existing impact, but it does depend on what form it takes, whereas new reservoirs can cause significant damage to the aquatic environment. The benefits from an environmental perspec-tive are low greenhouse gas emissions and good regulation characteristics, which means that hy-dropower can help introduce more intermittent generation into the system.

Some other countries, for a long time, have had energy storage in the form of pumped stor-age hydropower plants, where water can be pumped up to a reservoir at a higher altitude and then used to produce electricity. Sweden currently has two large pumped storage hydro-power plants that generate approximately 100 MW in total. These contribute to more inter-mittent generation in the system. The potential for pumped storage hydropower, on a large or small scale, has not been investigated in the current electricity system. It is interesting it terms of energy storage and as a regulator of in-termittent generation, but it is difficult to assess its environmental impact. If pumped-storage hydropower plants were expanded within the framework of existing water regulations, the impact on the environment would be limited. If completely new and large areas of land and water had to be used, the consequences could be significant.

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Environmental issues relating to power-to-gas storageThe concept of power-to-gas combines streams of carbon dioxide from industrial processes with hydrogen produced via water electrolysis (using renewable electricity) to produce gas. The reac-tion is a chemical conversion of carbon dioxide to methane using electricity. Power-to-gas can be used to regulate (consume) the excess power generated by wind, for example. The gas that is produced can be stored and used for power gen-eration or to replace fossil fuels in the transport sector. The carbon dioxide, which is a raw ma-terial in a power-to-gas process, can be reused from industrial processes.

As power-to-gas plants only currently exist as demonstration plants, primarily focused on producing fuels for the transport sector, it is difficult to make an environmental assessment of the technology. The main factor influenc-ing the direct emissions from the production of fuel is the electricity mix that is used (Walker, 2015). As it would mainly be used in Sweden to produce fuel from excess electricity produced from renewable resources, the impact would be minimal. From a life-cycle perspective, the pro-duction of fuel by power-to-gas can benefit the environment because it reduces the amount of carbon dioxide released into the atmosphere by using residual streams of CO2 from industrial processes (Audi, 2014).

Electromagnetic fieldsMagnetic fields from power lines and radio waves from mobile phones are examples of elec-tromagnetic fields. Several combined studies of research have found that there are no known health risks from low-level exposure to elec-tromagnetic fields, according to the Swedish authority’s reference values (Swedish Radiation Safety Authority). There are two identified ar-eas where adverse health effects from exposure to electromagnetic fields cannot be completely ruled out. These are exposure to magnetic fields, for example from power lines and electrical ap-pliances, and radio waves from mobile phones. Really strong electromagnetic fields can pose a health risk and interfere with the body's nerve signals, but this requires magnetic fields that are hundreds of times stronger than those found in the largest power lines (Swedish Radiation Safety Authority, 2013). As the importance of large-scale hydropower in the north of Sweden increases in three of the four generation alterna-tives, it will become increasingly necessary to transmit power from north to south (Electric-ity Distribution and Transmission Work Group, Electricity Crossroads, 2016). An increase in the number of power lines would increase the risk of more humans and animals being exposed to electromagnetic fields, which could be a source of concern even if no health risks actually exist.

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7. Economic valuation of environmental impacts

Electricity generation can have many different types of negative impact on the climate and en-vironment. Negative effects on the environment in the form of pollution of air, water and soil, have an impact on human health, the ecosystem and biodiversity. Electricity can also contribute to the depletion of resources, such as water, met-als, fuels, crops etc. There are also other exter-nal effects from electricity generation, such as noise and the risk of accidents. Different elec-tricity generation techniques give rise to differ-ent external impacts and to varying degrees. A study conducted by Ecofys in autumn 2015 estimates the monetary value of environmental impacts from the four generation alternatives for Sweden in 2050. The study is based on a model from work carried out in a study on Subsidies and costs of EU energy (Ecofys, 2014) by Eco-fys on behalf of DG Energy in 2014. The main aim of the EU study was to quantify the extent of public interventions in energy markets in the EU. One reason that governments have to inter-vene in energy markets is that the market does not adequately include all external costs such as environmental damages, in its energy prices. We would like to emphasise that the methods for valuing external costs come with high de-grees of uncertainty, and that calculations are only designed to identify the order of magnitude of the external costs that arise from electricity generation.

In Ecofys’ analysis on the environmental costs, the depletion of finite resources (certain metals and energy resources, such as uranium), was also costed. It is debatable whether this is an aspect that needs to be included in this

type of environmental economic analysis, or whether the price of finite resources will rise as they become scarcer and as result they would be replaced by alternatives. Most of the econo-mists interviewed, from academia and national authorities, believe it is wrong to include the depletion of energy resources and metals in an analysis of external impacts. In this context, it is important to note that Ecofys’ studies often form the basis for studies by the European Com-mission and that they take these aspects into consideration in their analyses. The results of the valuations and quantifications conducted in 2015 are included here but exclude the costs of the depletion metals and energy resources, see Figure 9.

The calculations are based on various as-sumptions and for some key variables sensitivity analyses have been conducted. Ecofys has used, in the base case, a carbon dioxide price in 2050 of 500 SEK/ tonne. For bio-CHP, 52 percent of the impacts have been allocated to electricity.

The sensitivity analysis shows that the results are affected by changes in key variables, but in most cases the effects are small and similar for all the alternatives. The Bioenergy and Hydro-power alternatives show a very low sensitivity to changes. The Solar and Wind alternative is most sensitive in the variable on technology improve-ments, which is linked to the relatively high as-sumptions that the environmental and climate impacts of these technologies will improve, par-ticularly for solar cells. (Ecofys, 2015).

It has also been shown that Ecofys’ figures relating to biomass were mainly based on data relating to Central Europe. In their 2014 analy-

38

sis, they did not have any data on wood chips, which means that earlier analyses of biomass might contain misleading data.

The calculations show that the alternatives will result in an environmental cost in the range of three to seven billion SEK per year, see Fig-ure 9. The New nuclear alternative results in the highest external costs. The More bioenergy and More hydropower alternatives have roughly the same costs, with hydropower alternative hav-ing the lowest external costs. The More solar and wind alternative has slightly higher external costs.

The cost of toxicity to humans is relatively high in all of the alternatives. In all of alterna-tives, except nuclear power, it is mainly solar, wind and bioenergy that are the source. In the New nuclear power alternative, the cost of tox-icity from nuclear power is also added to the toxicity from solar, wind and bioenergy, which are also included in this alternative. Toxicity re-fers to different types of pollutants that cause ill health, reduce the statistical life expectancy and generate a social cost/loss.

According to the Ecofys report, hydropower is one of the forms of energy with the least exter-

nal environmental costs. This is because the im-pacts on biodiversity are not fully taken into ac-count in the model/report. The model does not, for example, take into account the direct impact that hydropower has on wildlife through dam construction, migration barriers, hydromor-phological changes, alterations to rivers etc. The study looks at some parameters relating to land use, but compares hectares for each unit of elec-tricity produced against average land use, which does not reflect individual local environments. Neither does it address the water used by hydro-power plants and the thousands of hectares of running water ecosystems that are degraded to lake-type systems and often dry furrows.

The overall results show that toxicity to hu-mans, particle formation and climate change have the greatest individual impact. The remain-ing 13 categories of environmental impact4 are combined together under ’other impacts’ and are relatively small except for in the nuclear alterna-tive, where the impact from nuclear power ac-cidents and ionising radiation are higher. It may be noted that the impacts that fall within the ’climate change’ category are relatively low in all the alternatives, but considering the nature

Figure 9: External costs per alternative and year [billion SEK]. Source: Ecofys Externality costs of power generation in 2050 scenarios for Sweden per year. Processed by Climate and Environment Work Group

Monetary effects of external impacts per alternative (2014 SEK billion)

0 1 2 3 4 5 6 7 8

More hydro power – Average

More bioenergy – Average

New nuclear power – Average

More solar and wind – Average

Other

Climate change

Particle formation

Toxicity to humans

39

of the alternatives and choice of generation tech-nologies that either have low-carbon emissions or are considered to be climate neutral, this is not so surprising.

The Ecofys report doesn’t fully consider the impacts on ecosystem services, ecosystems and biodiversity and the results may be different if these factors were also taken into account. How-ever, these factors are more location-specific, and need to be assessed based on where and how the resources are used.

Particle formation contributes significantly to the external costs of bioenergy. Further tech-nological developments to reduce particle for-mation and emissions will most likely lead to a future reduction in the external costs resulting from the combustion of biofuels.

According to Ecofys’ estimations, solar cells have the second largest external environmental costs of all the types of energy included in the study. This is because the manufacturing of so-lar cells is energy-intensive and takes place in countries where electricity generation has sig-nificant negative environmental impact, such as China, Taiwan and Malaysia, in addition to the fact that efficiency is lower in Sweden. In the

calculations, an assumption has been made on an improvement of the environmental impact of 1 percent per year for solar cells (Ecofys, 2015).

Nuclear power is also affected by the fuel mix in the countries of manufacture. This is one of the reasons for the higher external environmen-tal costs for nuclear technology in the Ecofys report. The Ecofys report states that imports of electricity have higher external environmental impacts than all other types of generation apart from nuclear and solar power. The fact that the Northern European energy system will have reduced its dependence on fossil fuels has also been taken into consideration.

Figure 10 above shows the external costs per MWh5 of the different technologies that are in-cluded in the alternatives. The size of external costs for coal-fired and natural gas-based elec-tricity generation is also shown for reference. All the technologies in the various alternatives have relatively low external costs compared to fossil fuels. For example, a coal-fired plant has exter-nal costs of 1,650/MWh and a natural gas-fired power plant 400 SEK/MWh6 (Ecofys, 2015).

Figure 10: Comparison of external costs in SEK per MWh of electricity for different generation technologies

0

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s

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asCoal

External costs in SEK per MWh electricity for different production technologies

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8. Impact on Sweden’s current environmental quality objectives

To get a more systematic assessment of the im-pact on Sweden’s current environmental qual-ity objectives in the time frame 2030–2050 and to be able to generate a weighted assessment amongst the various experts in the Climate and Environment Work Group, we have used a semi-quantitative analysis model for expert panels. The results matrix below shows the combined results of the expert panel’s assessments for the four generation alternatives. The starting point was to assess how the environmental quality ob-jectives will have changed compared to today’s electricity system.

For the four generation alternatives, the ex-pert panel assessed how each of the environ-mental quality objectives will be impacted in the time frame 2030–2050. The assessments are graded on a scale of minus 3 to plus 3, excluding a zero value, where minus 3 is the most negative impact on the objectives and plus 3 is the most positive impact on achieving the objectives. The expert panel consisted of ten members of the

Work Group. The results were aggregated and are as follows:

more solar and wind and new nuclear are overall expected to result in the most positive impact on the environmental quality objectives. The more hydropower option was judged to re-sult in the least positive environmental impacts.

reduced climate impact and clean air are ex-pected to be positively impacted, except in the More bioenergy alternative, where no change is expected and there is even a deterioration in the case of clean air. More bioenergy means in-creased combustion processes and climate neu-trality is only achieved over time, as emissions and growth do not occur simultaneously.

a non-toxic environment and a safe radiation environment are expected to be affected posi-tively in all the alternatives except the New nu-clear power alternative, where the score is most

Table 2: Explanation of the arrows

Minus 5 to plus 5 Unchanged horizontal arrow

Minus 6 to minus 10 Some deterioration downward oblique arrow

Minus 11 to minus 20 A clear deterioration downward arrow

Minus 21 and more A sharp deterioration two downward arrows

Plus 6 to plus 10 Some improvement upward oblique arrow

Plus 11 to plus 20 A clear improvement upward arrow

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likely to have been influenced by the very exist-ence of new nuclear power plants.

flourishing lakes and streams are adversely affected by the More hydropower alternative. Biodiversity is heavily impacted.

a balanced marine environment, flourishing coastal areas and archipelagos are affected negatively in the More hydropower alternative. Here, again, it is the impact on biodiversity and natural and cultural values that come into play.

sustainable forests are slightly positively im-pacted or remain unchanged except for in the More bioenergy alternative, where the score is affected by maximised extraction of biofuels and forest residues that have negative effects on biodiversity and cultural values.

a magnificent mountain landscape is nega-tively affected or remains unchanged for all of the alternatives except for New nuclear power, where the impact is expected to be slightly posi-tive. The negative aspects relate to biological diversity, recreational value and natural and

cultural assets that are assumed to be impacted negatively, mainly by wind power.

a good built environment is expected to be af-fected positively or remain unchanged in all of the alternatives, particularly in the More solar and wind alternative. Opportunities to integrate solar cells into the construction of both new and existing buildings contribute to greater resource efficiency, as no new land is required for electric-ity generation. Furthermore, solar cells have a small direct impact on the environment.

a rich diversity of plant and animal life is impacted positively by More solar and wind, as well as New nuclear power. More bioenergy and More hydropower both have a negative impact on biodiversity.

The conclusion of the expert panel's assessment is that the More solar and wind and New nuclear power alternatives have the most positive impact on the environmental quality objectives. The main reason for this is that the negative impacts on biodiversity in the More bioenergy and More hydropower alternatives are particularly strong.

Table 3: Results of the expert panel’s assessments

Generation alternatives 1 2 3 4

Environmental Quality Objective

More solar and wind

More biopower

New nuclear power

More hydropower

1. Reduced climate impact

2. Clean air

4. A non-toxic environment

6. A safe radiation environment

8. Flourishing lakes and streams

10. A balanced marine environ-ment, flourishing coastal areas and archipelagos

12. Sustainable forests

14. A magnificent mountain landscape

15. A good built environment

16. A rich diversity of plant and animal life

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9. Tomorrow’s climate and environmental challenges and opportunitiesCLIMATE CHANGE

All of the four alternatives developed by the Electricity Production Work Group are based on the premise that the electricity system will become fossil-free. This means that the same amount of climate-neutral electricity is pro-duced domestically as is consumed domestically each year. In spite of this, all the alternatives have an impact on the climate. Figure 11 below shows that New nuclear power is the alterna-tive that has the lowest cost on climate change (Ecofys, 2015). This is because there are large indirect emissions in the solar and wind energy manufacturing chain, which might change if manufacturing is moved to other countries or

if the global energy system moves towards an energy mix that contain less fossil fuels.

In Paris in December 2015, world leaders agreed to strive to keep global warming at a maximum of 1.5 degrees, which means that the world's energy system should be free of fossil fuels around 2040. The assumption made in the Ecofys report is therefore conservative. Accord-ing to the Paris agreement, the Intergovernmen-tal Panel of Climate Change, IPCC, will present a new report in 2018 on what the 1.5 degree tar-get means. In an IEA report, an interim analysis shows that it is possible to reduce emissions at a faster rate despite the underlying assumption

Figure 11: The costs of climate change for the four alternatives according to Ecofys

Monetary effects of climate change (2014 SEK billion)

0,0 0,2 0,4 0,6 0,8 1,0

More solar and wind – Average

New nuclear – Average

More bioenergy – Average

More hydro power – Average

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that there will continue to be a strong depend-ence on fossil fuels in the energy mix in Europe (IEA PVPS, 2015). Other studies show lower emissions for newer types of solar cells (Inter-tek, 2015) and, taking this into consideration, it should be possible to achieve a greater reduction in future systems, together with the fact that the lifespan of the panels is likely to be longer than

the 30 years that is commonly used in LCA cal-culations.

Biomass will be increasingly important but creates challenges for biodiversity In all of the generation alternatives, there is an increase in electricity from bio-CHP of between 18 and 58 TWh per year. The question is whether

Millions of cubic metres

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Figure 12: Historical growth and logging as well as future logging potential. Source: Swedish Forestry Agency

Figure 13: Round timber balances. Source: Swedish Forestry Agency

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domestic forest residues can meet this demand and if extraction can be sustainable in the long term. It is our opinion that forest volume will increase in the long term. Over the last hundred years, the volume of forest in Sweden has dou-bled from 60 to 120 forest cubic meters, without any changes to the amount of land that is used, see Figure 12 too. The growth and volume of wood has increased as a result of more intensive forest management and the felling rate is less than the forest growth rate.

Specifically, this means, according to the Swedish Forest Agency, that the annual amount of forest that is felled could increase from the current 80 million cubic meters to a maximum of 100 million cubic meters, from now until the end of the next decade, without felling exceed-ing growth. In addition, there is the potential to use more logging residues to produce ener-gy, equivalent to 30 TWh of electricity, which is three times more than the current volume (Svante Claesson, Karl Duvemo, Anders Lund-ström, Per-Erik Wikberg, 2015).

In its study, the Swedish Forestry Agency fore-casted logging volumes for a number of differ-ent scenarios. The calculations have taken into account increased growth due to the predicted warmer climate. However, in the calculations, they have not been able to take into account any increase in damage to the forest caused by changes in pest infestations. The following chart shows that if the logging volume is kept at 90 percent, the percentage of forest that is felled in relation to the amount of forest that is available to fell, is similar to what is felled today.

Determining how much wood can be extract-ed without exceeding growth is only one aspect of sustainable forestry, see Figure 13 (Svante Claesson, Karl Duvemo, Anders Lundström, Per-Erik Wikberg, 2015). The difficult environ-mental question is whether the forestry sector takes biodiversity into consideration enough. One issue that usually arises in discussions is about ash recycling to reduce acidification and whether additional provisions should be made, for example, to reduce the number of red-list-ed species. The Swedish Forestry Agency cur-rently maintains that it is difficult to meet the environmental objective of "sustainable forests"

with existing control mechanisms. The diagram shows the gross usage and the actual extraction in 2013 compared to the potential annual ex-traction in SKA 2020–2029, including additional logging on other types of land and the felling of wind falls and dead wood.

Energy companies are just one of several in-dustries that use forestry raw materials. Other industries use the raw material for paper, pulp, cardboard and sawn timber. The use of biofu-els is increasing and new innovative products based on forest resources are being developed in sectors such as the chemical industry. Those in-volved in the conservation of nature and cultural heritage are also making more claims, in terms of access to forests for outdoor recreation and conserving biodiversity and cultural values. It is clear that trade-offs must be made if all of soci-ety’s needs are to be met. In addition, there is an important connection between forest products being used by industries and the economic ben-efits of using forest residues in the energy sector and for biofuel production.

Forest waste and residues from the forest industry work well as fuel in district heating plants for the generation of both heat and elec-tricity. There are no special quality requirements in terms of moisture content, and different types of residues can be used, even tree stumps, if nec-essary. In its SKA15 report, the Swedish Forestry Agency says that the amount of branches and tops that can be extracted could triple and still meet environmental requirements. However, it would be the north of Sweden which would sup-ply this increase in volume, which would mean that an efficient transport chain would be need to be set up (from both an environmental and cost point of view), if this volume is to be uti-lised for energy purposes. The question of how much biomass residue should be used for energy or, alternatively, be left in the forest, is an eco-nomic one.

The volume of branches and tops that are chipped today amounts to about 5 million cubic meters, equivalent to 9.7 TWh of energy, which is used for CHP generation. In addition, the volume of firewood that is extracted and delivered for energy purposes amounts to around 6 million cubic meters, equivalent to 14.5 TWh (Staffas

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Louise, Hansen Karin, Sidvall Anders, Munthe John, 2015).

In Sweden, the vast majority of forest is certi-fied under FSC or PEFC. A new ISO standard for biomass has also been developed. These types of certification are an important way of raising

standards in the forestry industry. However, there is disagreement on whether these require-ments are adequate enough. Despite the high percentage of certified forest land in Sweden, the responsible authorities say that that the en-vironmental objective of ’Sustainable Forests’

Table 4: Carbon dioxide emissions at different periods of time

Grams of CO2/MJ fuel 20 years 100 years

Coal 106 106

Fossil gas 69 69

Branches and tops 21–33 7–10

Stumps 66 8–31

FSC: The Forest Stewardship Council is an independent international membership organisation that promotes responsible management of the world's forests. The Swedish FSC is an independent organisation within the International FSC framework. Members of the FSC consist of environmental organisations, social organisations and businesses. Together they develop standards for forest management and traceability. In addition to international agreements, national and local laws, owners of FSC certified forests adhere to the FSC’s special rules worked out together by three chambers (social, economic and environmental). Of Sweden's 22.5 million hectares of productive forest land, 12 million hectares of forest is certified by FSC. For many years, environmental organisations have criticised the FSC and how certification works in practice in Sweden. Above all, they criticise the organisation’s monitoring capabilities. Three environmental organisations have withdrawn their membership of the Swedish FSC.

PEFC: the Swedish part of Programme for the Endorsement of Forest Certification was set up in 2000. The standard has been revised twice and the current one is valid until 2017. The Swedish PEFC offers forest, contractors and traceability certification. In Sweden, a third party certifier, approved by the accreditation body SWEDAC, carries out an audit to ensure compliance with PEFC standards. In Sweden, 11 million hectares of forest is certified under PEFC. Overall, around 10 percent of the world's forests are certified today. The majority of them are certified according to PEFC. There is approximately 7 million hectares of forest in Sweden that has duel certification. In total, approximately 70 percent of productive forest land is certified and about one million hectares of forest land is protected for conservation purposes. 15 years ago, only 40 percent was certified. Today, certification affects 40,000 forest owners (Almgren, 2015).

The Global Forest & Trade Network is a WWF-led partnership of more than 300 companies, environmental organisations, contractors and others, in more than 30 countries around the world. Its aim is to create a market for sustainable forest products.

Examples of certifications and quality standards

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will not be achieved by 2020. Conflicts arise between production and environmental objec-tives as well as between targets for renewable energy and biodiversity. They will be difficult to meet within the set time frame, but are obvi-ously important for achieving a sustainable for-est industry.

At the Work Group’s seminar on biomass and sustainable forestry, it came to light that very few energy companies have traceability require-ments to track the origin of forest residues.

The climate impact of biofuels Biomass is part of a biological cycle in which carbon atoms circulate between photosynthesis and combustion/decomposition. In the short term, biomass releases carbon dioxide during combustion and the amount of carbon dioxide in the atmosphere increases. In reviewing this problem, you cannot ignore the timing of the emissions from bioenergy. Theoretically, extrac-

tion and combustion are carbon neutral. But in reality, this is not the case. The use of bioenergy can significantly affect forests’ carbon storage and the carbon dioxide content in the atmos-phere. But branches and tops that remain on the ground still release climate gases in the short term. See Table 4, where carbon dioxide emis-sions have been calculated at different times.

Emissions and growth do not take place si-multaneously and it is therefore important to re-member that there is a time aspect and the main thing is to ensure that replanting takes place after extraction. In managed forests, stocks of timber are built up over about 70 years, most of which is then felled to be used for wood and en-ergy, replacing other materials and fossil fuels. In an unmanaged forest, a carbon store is also built up, but it is preserved and continuously kept at the same level and therefore is not used to replace other materials (Zetterberg and Chen, 2014). It appears that it is essential to take sub-

0

200

400

600

800

1000

1200Substitution effects

Biomass/carbon storage in trees

300 250200150100500

Carbon per hectare

years

Carbon storage in the ground

0

200

400

600

800

1000

1200Biomass/carbon storage in trees

Carbon storage in the ground

300250200150100500

Carbon per hectare

years

Figure 14: Impact on the climate of a managed and unmanaged forest, respectively, showing that a managed forest is better than an unmanaged one. Figure based on data from Eriksson et al.

Conditions:

Managed forest. Planted, cleaned, thinned and felled at regular intervals over 300 years.

In a managed forest, timber stock is built up over a 70 year period, which is then mostly extracted. Wood and biomass are used to substitute other materials and energy sources that impact the environment.

Unmanaged forest. Allowed to grow freely for up to 300 years.

In the unmanaged forest, timber reserves are only built up once and then change slightly over time. The trees act as carbon sinks, but in the unmanaged forest, the substitution effect is completely lost.

UNMANAGED FORESTMANAGED FOREST

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stitution effects into account in the calculations and in order to have a positive impact on the climate, the fossil fuels or materials that cause greenhouse gas emissions need to be replaced (for example, concrete can be replaced by wood as a building material).

In a landscape of managed forests, there are forests of all different ages, from newly planted forests to mature forests ready for felling and clearings. When felled, the forest loses carbon but new carbon dioxide is reabsorbed by new tree growth, see Figure 14 above with refer-ence to Lars Z /Erik Ericsson/Mattias Lun-dblad. As long as extraction does not exceed growth, the amount of carbon stored in the soil is maintained, and there is a balance between the carbon that is lost and the new carbon diox-ide reabsorbed by the trees. If growth exceeds extraction there is a net absorption of carbon dioxide and the forest acts like a carbon sink.

Views on sustainable biomassThe EU is currently developing sustainability criteria for solid biomass sources. However,

there are several environmental organisations and policy makers in Brussels who believe that the use of biomass is generally not sustain-able (BirdLife International, 2010) (Action-Aid, 2015). They argue that biomass should be included in the emissions trading system and biomass combustion should be taxed in the same way as fossil fuels. In Sweden, if there was such a change in approach to how the for-est is used, many climate measures would come to naught, since the replacement of fossil fuels by biomass will have less advantageous finan-cial profitability/will be much more expensive It is therefore important that the entire forest sector works together to ensure that the sus-tainability requirements set by the European Commission are reasonable and manageable. It is vital that any sustainability requirements are imposed on all biomass production regardless of its intended use. The starting point should be the international standardisation work that is currently being undertaken.

VALUATION OF BIODIVERSITY

Biodiversity is defined as the variability among living organisms from all sources. This includes diversity within species, between species and of ecosystems. All electricity generation and elec-tricity distribution/transmission has an impact on biological diversity in one a way or another. The impact can be both positive and negative.

Wind power can affect individual birds and bats, but not species as such. Offshore wind and wave power can improve the living con-ditions for fish and other marine species. Hy-dropower affects the ecosystems of lakes and rivers in a number of ways, such as through direct impact on plant and animal life during the construction of dams; migration barriers; changes to the flow of water and fluctuating water levels; and hydromorphological changes. The warm water discharged from nuclear pow-er plants can affect aquatic plants and animals

in the discharge area. Biomass CHP can affect biodiversity through the deforestation that oc-curs during the extraction of biomass. Power lines used in electricity distribution/transmis-sion have been shown to act as safe havens for certain threatened species that need open heathland, or its equivalent, and therefore con-tribute positively to biodiversity, although they may have negative impacts on forest-dependent species (Svenska Kraftnät, 2015).

Electricity generation also affects a number of ecosystem services. Ecosystem services are the products and services that natural ecosystems provide to humans and which contribute to our well-being (Swedish Environmental Protection Agency, 2015). Some examples of ecosystem services are pollination, food, bio-energy and drinking water.

All renewable power sources help to limit

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the impact on the climate but global warming continues. Climate change is potentially one of the main causes of biodiversity loss and changes in ecosystem services. A rich biodiversity could lessen the adverse effects of climate change. Taking into consideration the importance of ecosystem services to tackle climate change, it is vital that everything possible is done to preserve biological diversity and improve the resilience of the system. According to studies of planetary boundaries, (Steffen, 2015), biodiversity loss is an area that is at least as acute as climate change. We cannot solve one environmental problem by creating another, but we have to choose courses of action that result in as little damage as pos-sible on the climate, biodiversity and other envi-ronmental qualities.

One of the limitations with the studies and analyses that calculate the external effects asso-ciated with impacts on biotopes, is that effects, such as biodiversity, have not been fully quan-tified, for example in the Ecofys report, SvK’s tools or Vattenfall’s LCA for electricity networks.

For example, the section on hydropower in the Ecofys report doesn’t take into consideration the direct impact of hydropower on wildlife through dam construction, migration barriers, hydromorphological changes, alterations in flow rate etc.

It has therefore proved to be very difficult to evaluate biodiversity using the different analyti-cal tools. Further knowledge is required of how to carry out a valuation in a systematic way, particularly around biodiversity in connection with biomass extraction and the impact of hy-dropower generation.

Red-listed species and biodiversity go hand in hand. In Sweden, the red list is created by the Swedish Species Information Centre at the Swedish University of Agricultural Sciences in Uppsala. In 2015, 4,273 of the 21,600 assessed species were classified as red-listed, of which 2,029 species are endangered. Out of Sweden's approximately 60,000 native species, 21,600 (36 percent) have been assessed in the work with the 2015 Red List.

The results for 2015 do not show any noticeable change in the overall level of biodiversity in Sweden during the last 15 years. The rate at which species diversity is lost has neither increased nor decreased.

According to the Swedish Species Information Centre, the factors that affect the most endangered species in Sweden are logging and encroachment, both of which pose a threat to about 30 percent of the red-listed species. The extraction of old forest growth or previously extensively managed forests are one of the main reasons that a forest species ends up on the Red List.

Red List criteria are designed to evaluate the risk of the species going extinct in Sweden. The evaluation is done using internationally accepted criteria based on multiple risk factors. These include if the species is rapidly decreasing in number, if its area of geographical distribution is shrinking or is heavily fragmented, or if the species' population is very small and therefore more sensitive to inbreeding or unpredicted adverse events. The possibility of strengthening the species or reintroducing it from neighbouring countries is also considered in the risk assessment.

Red listing of species

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RESOURCE USE

Energy efficiency in various sectors is important from a systems perspective and affects the use of resources, for example, through the technologi-cal development of products and in the electric-ity system itself, as well as in the transport sec-tor when electricity replaces fossils fuels because electric power is considerably more efficient.

More efficient energy useMore solar and wind is the alternative where it is most difficult to manage the power balance dur-ing the year based on the assumptions made in the Production Group's alternatives. It is there-fore important to look at ways to reduce the need for imports of fossil-based energy and sup-plementary systems that could have significant environmental impact, such as batteries, reserve power and transmission capacity. It would be in-teresting to study how major investments in user flexibility and energy efficiency improvements might help to maintain the power balance in this alternative. The Work Group has not been able to do any calculations on this but still want to highlight the opportunity and the need for this to be investigated further.

One assumption made in the Electricity Pro-duction Work Group’s alternatives is that power demand is proportional to electricity demand, which means that the demand for electricity for heating is not expected to change much in pro-portion to the total electricity demand. Import-ed and reserve electricity is often needed during cold winter days. According to the work group’s calculations, the different forms of electric heating currently account for up to 25 percent of power demand. It is possible to reduce the need for electricity for heating by expanding the district heating network, which also contributes with foreseeable electricity in the form of CHP. Increased investment in energy efficiency im-provements, such as insulating buildings heated by electricity, and converting direct-acting elec-tricity and air/air heat pumps to systems that use less electricity during the coldest days, for example geothermal, are other options if it is not possible to expand the district heating network.

Demand Flexibility is assumed to be 10 per-cent in all of the alternatives, which is based on current economic conditions. Studies show that the cheapest and least polluting way to achieve a power balance in a system with a lot of intermit-tent power, is to increase the incentives for de-mand flexibility. Advances in digitisation make it possible to interact with both small and large customers. According to the Electricity Use Work Group, it is difficult to assess how demand flexibility will develop, but the future potential for demand flexibility is expected to be between 3,000–4,500 MW, depending on the varaktighet, which constitutes more than 10 percent of the maximum power demand of 28 GW in the av-erage scenario. Demand flexibility is an aspect that needs to be studied in more detail from an environmental perspective.

Assumptions about technology choices can also affect the need for supplementary sys-tems. In the More sun and wind alternative, it is onshore wind power that increases the most, primarily in northern Sweden. Onshore wind power is currently cheaper than offshore, but has a low power factor. The localisation in northen Sweden increases the need to expand transmission capacity, which has a financial and environmental cost. An expansion of offshore wind would therefore be attractive as the need for supplementary systems also decreases, com-pared to the More solar and wind alternative.

Digitisation and the Internet of Things The introduction of the Internet of Things (IoT) in future electricity systems can result in energy efficiency improvements and reduced environ-mental impact. In the IoT, electricity producers are able to communicate with individual user's devices and thereby reduce use at times when power peaks might arise. This assumes that there will be incentives (e.g. economic or envi-ronmental) for users to control their electric-ity use by allowing the supplier to briefly limit their electricity use or by having a system that responds, for example, when the price per kWh at a certain time is high. For this to work, the

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charged electricity price must vary on a "minute by minute" basis.

There is potential to use the IoT to make more efficient use of Sweden’s electrical system. If pow-er peaks can be avoided, operational security in-creases, i.e. the risk of blackouts reduces and, as a result, the need to deploy reserve power, which often has a negative environmental impact.

The technology already exists, but many things need to be in place for the potential of IoT to be realised (for example, you must have real-time electricity prices and electrical devices that can be controlled locally or by the electric-ity producer).

Calculations show that if about 30 percent of the load on the electricity grid was controlled re-motely and up to 30 percent of electricity gener-ated by wind, it would be possible to achieve an 8 percent reduction in the expected peak load. These kinds of results can hopefully encour-age electricity suppliers and grid operators to develop systems that allow electricity use to be meaningfully controlled in practice. (Greentech Media, 2015).

A large portion of a household's electricity bill currently consists of fixed costs. Innovative business models and innovative policies could increase users' ability to play a role and even in-crease the incentives to do so.

Land for wind powerThe technological potential of onshore wind power is very large, almost 160 TWh (Electricity Production Work Group, Electricity Crossroads, 2016). From an environmental perspective, it is important to consider how wind power results in changes to the landscape. In the planning and construction of wind power, a distinction is made between exclusion zones where build-ing is not allowed, areas where it is not possi-ble or not allowed to expand, and areas/zones of conflicting interests, where there are other public interests and particular difficulties in ob-taining building permits. This does not include private interests. Examples of land-based exclu-sion zones are urban areas, marshes, lakes, riv-ers etc. and at sea, in shipping lanes and there is the restriction of a maximum water depth of 40 meters. Conflict zones/areas include areas

of national interest used for commercial fish-ing, cultural heritage, nature conservation, rec-reation, communications, defence, and certain designated geographical areas, which, accord-ing to the Swedish Environmental Code, must be protected against actions that may damage corresponding interests (Peter Blomqvist, Mats Nyborg, Daniel Simonsson, Hakan Sköldberg, Thomas Unger, Elforsk, 2008).

In Sweden, it is municipalities that have most responsibility for the planning of land and water areas and according to the Planning and Build-ing Act, the various interests in society must be weighed up against each other. Sweden has no national planning, but the government can influence regional planning by setting national targets and highlighting claims in the national interest. The Swedish Energy Agency is tasked by the government to identify areas on land and at sea that have particularly good wind condi-tions and are areas of national interest for wind power. Today there are over 300 areas of na-tional interest for wind power, of which only 30 are at sea and in lakes. In total they cover more than 1.5 percent of Sweden's surface, including Swedish waters (Swedish Energy Agency, 2015).

Currently, wind turbines are mainly located in southern Sweden, in the coastal areas along the west coast and Skåne, as well as on the islands of Öland and Gotland. There are also a lot of wind turbines adjacent to the Vänern and Vät-tern lakes. In recent years, wind turbines have also been built in wooded areas. The likelihood of wind power for electricity generation being expanded and new wind turbines being built is high (Electricity Production Work Group, Elec-tricity Crossroads, 2016):

• Continued expansion on land with an increased share in forests and colder locations as technology and knowledge about these develop. Expansion will largely take place in northern Sweden.

• Coastal areas and other areas that have already largely been utilised will see a generation shift. Older wind turbines in good locations will be replaced with new, more efficient wind turbines.

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• In the longer term, it is likely that even larger offshore wind farms will be built. In the short term, these are expensive relative to other alternatives.

Much of the research on the environmental im-pacts of wind power has been based on how in-dividual types of animals such as birds and bats are affected. But not much is known about how water conditions are impacted when roads and power lines are built up to the large wind farms. Nor about how animals are affected by the bar-riers that arise when different areas are split off from each other.

Increasing hydropower’s capacity – new water regulations needed When hydropower was being expanded in Sweden, the main objective was to produce as much electricity as possible. This means that the plants have been designed to create the maxi-mum amount of energy, not power. Hydropower

in Sweden therefore needs to be updated and modernised so that it can continue to serve as the backbone of the Swedish electricity system. However, today's water regulations make this difficult to achieve because the process takes a long time to obtain modern and upgraded ap-provals, is very expensive and has an unpredict-able impact on generation volumes. If the aim is to increase hydropower’s capacity utilisation, measures to increase flexibility need to be pri-oritised, i.e. the ability to increase or decrease generation in order to contribute to the balance in the electricity system. The benefits of invest-ing in new or modernising existing hydropower plants are limited if they do not contribute to increased flexibility.

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10. Appendices

METHODOLOGY

METHOD FOR THE QUANTIFICATION OF NEGATIVE EXTERNAL IMPACTS

There are several methodologies that can be used to quantify and value the external costs of cli-mate and environmental impacts. One method is based on the assessment of the damage caused by external impacts, the so-called "damage cost approach". The aim of this method is to assess the total societal cost associated with energy generation. Electricity generation in Sweden in 2050 may lead to negative external impacts in terms of pollution that spreads through air, wa-ter and soil and has an impact on human health, ecosystems, biodiversity and the depletion of various assets such as water, metals, fuels, crops etc. There are also other external impacts from energy generation and transportation, such as noise and the risks of accidents. The estimates of the external costs of electricity generation in Sweden that are presented here are based on a background report carried out by Ecofys in No-vember and December 2015. We want to stress that methods for valuing the external costs come with high degrees of uncertainty, and that the calculations are only designed to identify the or-der of magnitude of the external costs that arise from electricity generation.

In the model, the depletion of metals and en-ergy resources are regarded as external impacts. There are opposing views on whether this type of depletion should be considered "external im-pacts". The Ecofys study adopts a broader defi-nition of external impacts.

The concept of "external impacts" and the valuation of these impacts originate in the na-tional economy. The owner of a resource is ex-pected to be aware of, and take into considera-tion, that the extraction of the resource today affects the value of (that is, the price of) the re-

maining stock of resources in the future. The value of not depleting the resource, or alterna-tively, the cost of preventing a future shortage, is called "resource rent" and is assumed to reflect the market price of the resource in question. If the resource owner, such as the company's resource rent differs from society's valuation of not exploiting the resource, the resource is not correctly priced and society can choose to strengthen the price signal through taxes, for example, to better reflect the resource’s scarcity and any associated external cost. In neoclassical economic literature that deals with the use of finite natural resources, depletion (of, for exam-ple, energy resources) is generally not associated with any external cost.

To estimate the external costs of the project’s four different generation alternatives, Ecofys used its External-E tool and approach devel-oped in the study on Subsidies and Costs of EU projects (Ecofys, 2014) by Ecofys for the EU in 2014. The tool integrates (1) a life-cycle assess-ment of the external impacts, which covers the entire value chain and the whole life-cycle of the production plant, (2) actual generation and ca-pacity data that aggregates most of the external impacts at Sweden’s level and (3) methodologies for valuing the external impacts in monetary terms. For each individual production technol-ogy, all the external costs, including electricity use in the supply chain’s upstream processes have been taken into consideration. However, in the total combined national generation port-folio, the external impacts that would otherwise be counted twice have been removed to avoid any double counting.

External costs for different generation tech-nologies have been calculated for the four differ-ent generation alternatives with a low, a medium and a high value for each alternative.

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Categories of environmental impactThe life-cycle assessment comprises a total of 18 environmental impact categories, see the table below. These categories summarise the impact of several parameters. One example is ’climate change’, which is measured in the unit "kg CO2 equivalent". This category includes all the effects of greenhouse gases on climate change. Another example is the category ’particle formation’ with the unit "kg PM10 eq", that in addition to PM10 emissions, also includes the impact of NH3, SO2 and NOx. The table below also presents the ex-ternal costs that arise for each of the quantifica-tion methods in each category.

An external cost analysis has been carried out for various categories of generation technologies in the four different main alternatives, including processes both upstream and downstream of the

supply chain. A significant part of the external costs associated with renewable power genera-tion technologies are from upstream processes, such as fuel for transport and electricity use in manufacturing. Out of the cost categories, climate change, depletion of energy resources, particle formation, toxicity to humans and the depletion of metals are the categories that have the highest external costs.

Generation technologiesData for the quantification of the environmental impacts consisted of 12 future electricity genera-tion alternatives for Sweden in 2050 that have been developed by the Electricity Production Work Group as part of the Electricity Cross-roads project. The alternatives consist of four different sets of electricity generation technolo-

Table 5: Categories of environmental impacts included in the model

Category of environmental impact Unit 2014 EUR per unit 2014 SEK per unit

1. Climate change kg CO2 eq 60.0 560

2. Depletion of the ozone layer kg CFC-11 eq 195 1830

3. Soil acidification kg SO2 eq 0.23 2.2

4. Eutrophication of freshwater kg P eq 0.24 2.3

5. Eutrophication of sea water kg N eq 1.88 17.6

6. Toxicity to humans kg 1.4-DB eq 0.08 0.7

7. Photochemical oxidant formation kg NMVOC 0.00 0.04

8. Particle formation kg PM10 eq 27.43 257.6

9. Toxicity to the ecosystem/land species.yr 4.29E+07 4.03E+08

10. Toxicity to the ecosystem/freshwater species.yr 2.29E+06 2.15E+07

11. Toxicity to the ecosystem/marine environment species.yr 9.56E+03 8.98E+04

12. Ionising radiation kBq U235 eq / kBq 0.00 0.02

13. Use of land for agriculture m2a 0.10 0.9

14. Use of land for cities ma 0.10 0.9

15. Natural land conversion m2 3.7 34.4

16. Depletion of water m3 0.005 0.045

17. Depletion of metals kg Fe eq 0.07 0.7

18. Depletion of energy resources7 kg oil eq 0.05 0.5

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gies called More bioenergy, More hydropower, More solar and wind, and New nuclear power. For each alternative, three different generation levels have been defined: low (140 TWh), medi-um (160 TWh) and high (180 TWh) (Electricity Production Work Group, Electricity Crossroads, 2016), which correspond to three different lev-els of usage. Table 6 above shows all these al-ternatives broken down by different electricity generation technologies. The three levels – low, medium and high – correspond to three different levels of demand.

Data on the impact of each technology on cli-mate change has been supplemented with data from the Swedish LCIAs (Life-cycle impact as-sessments) by the Swedish Environmental Insti-tute (IVL). Specifically for biotechnology, where branches and tops are used as fuel, Sweden-specific LCIA data from IVL has been used, to give as representative a picture as possible of the environmental impact.

To assess the impact on the ecosystem, a spe-cies loss model has been used but the model does not fully capture biodiversity. Impacts, such

as disruptions to waterways caused by dams, namely for hydropower, and from noise or from increased water temperature, i.e. from cooling water, are not included in the quantified results.

Although the impacts and estimates are fo-cused on Sweden, it is unlikely that all the im-pacts will occur in Sweden. Rather the results reflect the global impacts of the different alter-natives in the Swedish electricity system. For example, for solar cells made in China but used in Sweden, most of the external environmental impacts occur locally in China. These types of underlying uncertainties and limitations are de-scribed in more detail in the Ecofys report.

The estimate of the external costs for nuclear power differs from the other technologies be-cause of the difficulty of estimating the costs of accidents. All types of energy sources and energy generation have an associated accident risk. For example, there have been accidents in coal mines (mostly outside the EU) as well as accidents in conjunction with the extraction of gas and oil. As for nuclear power, the possible consequences of an accident are much higher than for other

Table 6: The electricity generation technologies that are included in the respective alternatives

Alternative (TWh)

Technologies for electricity generation

More solar and wind More hydropower More biopower New nuclear

Low Med High Low Med High Low Med High Low Med High

Hydropower, dams 32.5 32.5 32.5 42.5 52.5 62.5 32.5 32.5 32.5 32.5 32.5 32.5

Hydropower, run-of-river 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5

Wind, onshore 40 55 70 30 35 40 30 40 50 20 20 20

Solar PV on roofs 10 15 20 5 5 5 5 5 5 5 5 5

Nuclear plants 0 0 0 0 0 0 0 0 0 30 50 70

Total CHP: consisting of 25 25 25 30 35 40 40 50 60 20 20 20

Biomass-CHP (electricity) 23 23 23 28 33 38 38 48 58 18 18 18

Waste-CHP (electricity) 2 2 2 2 2 2 2 2 2 2 2 2

Total generation (TWh) 140 160 180 140 160 180 140 160 180 140 160 180

Capacity net (GW) 5.3 6.8 8.4 2.4 1.0 -0.4 2.2 1.7 1.1 3.5 3.1 2.7

Operating flexibility (GW) 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Imported hours (h) 200 400 700 200 400 700 200 400 700 200 400 700

Required export (-ve) / Import (+ve) (TWh)

0.5 1.5 3.8 -0.1 -0.8 -2.4 -0.2 -0.5 -1.3 0.1 0.0 -0.2

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energy sources. Although the likelihood of an accident occurring is considered to be low, the consequences can be significant. The type and extent of the accident (a meltdown or a critical accident), as well as how often an accident oc-curs, affects the estimated size of the negative external impacts.

Sensitivity analysisThe calculations are based on various assump-tions and the sensitivity of some key variables has been tested. Table 7 above shows the varia-bles that have been analysed and how they vary.

Ecofys has assumed in the base case scenario a CO2 price in 2050 that is half of today’s Swed-ish CO22 tax level. Although literature on the damage costs of greenhouse gases suggests this low level, it is interesting to put €60/tonne in a Swedish context.

EXPERT PANEL’S ASSESSMENT OF SWEDEN’S ENVIRONMENTAL QUALITY OBJECTIVES

To get a more systematic assessment of the im-pact on Sweden’s environmental quality objec-tives in the time frame 2030–2050 and to be able to generate a weighted assessment amongst the Work Group, we have use the TEQUILA analysis model for expert panels. It is inspired by the Del-

phi method and has been developed as part of the EU programme ESPON88 to scientifically and practically evaluate and discuss the impacts of policies. In brief, panels of experts systematical-ly make assessments using pre-defined criteria in one or more stages. The aim of the expert panel is to provide quantitative estimates of how much impact the various generation alternatives will have on the Swedish environmental quality ob-jectives. In order to "force" the Delphi panel to have a viewpoint and not too easily end up with a middle-of-the-road i.e. "neutral" assessment, a scale of minus 3 to plus 3 is used without a zero value. For the four generation alternatives, the expert panel assessed how the respective envi-ronmental quality objectives will be impacted in the time frame 2030–2050. The assessments are graded on a scale of minus 3 to plus 3, without a zero value, where minus 3 is the most negative impact/conflicton the area/objective and plus 3 is associated with a positive impact/enhance-ment on the area/objective. The expert panel consisted of ten members of the Work Group. The results were then discussed by the Work Group and any changes and adjustments that need to be made in other sectors were discussed. The panel then carried out the assessment again.

Table 7: Variables in the sensitivity analysis

Variable Unit Base case Low High

Climate cost euro/tCO2e 0.00 - 60.00

Climate cost “internalised” euro/tCO2e 60.00 30.00 180.00

Energy resource price euro/kg oe 0.049 0.024 0.155

Bio-CHP – distribution of impacts

% share of electricity

52 30 70

Toxicity to humans euro/kg 0.08 0.04 -

Technology improvements (climate and environmental impacts)

yearly % Varies per technology

0 % -

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ABBREVIATIONS AND TERMS

LCALife-Cycle Analysis.

LCILife-Cycle Inventory.

LCIALife-Cycle Impact Assessment.

COP 21Conference of Parties; an annual meeting that takes place within the UN Framework on Climate Change (UNFCCC). COP21 took place in Paris and is also known as the 2015 Paris Climate Conference.

SDGSustainable Development Goals.

External impactsExternal impacts/effects (externalities) can be described as economic transactions that affect the benefit to third parties. Externalities can be positive or negative. An example of a negative externality is pollution. An externality leads to market failure when prices in one market do not accurately reflect the true cost of produc-ing a product or service. (Sustainability Guide, 2014)

FOOTNOTES

1. Ecofys is a Dutch consulting company, www.ecofys.com, which specialises in renewable energy.

2. Swedish Parliament: Regulation (2009: 689) on grants for photovoltaics, 2009.

3. The Swedish Energy Agency: Grants for photovoltaics, taken from https://www.energimyndigheten.se/Hushall/Aktuella-bidrag-och-stod-du-kan-soka/Stod-till-solceller/ 24 July 2015.

4. Depletion of the ozone layer, Acidification of the soil, Eutrophication of freshwater, Eutrophication of seawater, Photochemi-cal oxidant formation, Toxicity on the ecosystem/soil, Toxicity on the ecosystem/freshwater, Toxicity one the ecosystem/marine environment, Ionizing radiation, Use of land for agriculture, Use of the land to cities, Natural conversion of land and Depletion of water.

5. This includes costs for the depletion of met-als and energy resources in order to get an accurate comparison.

6. Based on the average Swedish power plant in 2012.

7. The future value of resources is difficult to assess and may differ between the various resources. So, for example, the fuels that do not have many alternative uses, may have a lower value in the future than they have today.

8. The TEQUILA model, developed by Robert Camagni for ESPON (European Spatial Plan-ning Observation Network), ESPON Project 3.2: Spatial Scenarios and Orientations in relation to the ESDP and Cohesion Policy, 2006.

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SEMINARS

Additional information as well as presentations from seminars can be found on IVA’s website www.iva.se.

The future electricity system solves environ-mental problems and creates new ones27 August 2015Lars-Erik Liljelund, fd GD Swedish Environmental Protection Agency, SEIDag Henning, Swedish Environmental Protection AgencyNina Weitz, SEIJenny Godhe, IVL Swedish Environmental Research InstituteSvante Axelsson, Swedish Society for Nature ConservationCecilia Kellberg, Swedish EnergyKarin Jönsson, E.ON Anton Steen, Energy CommissionHelle Herk-Hansen, VattenfallRichard Almgren, The environmental objectives from a business perspective

Competition to create sustainable forests 9 November 2015Magnus Fridh, Swedish Forest AgencyMårten Larsson, Swedish Forest Industries Federation

Ingrid Bodin, PreemNils Hannerz, IKEMPer Ytterberg, FortumEmmi Jozsa, Swedish Energy AgencyGöran Örlander, SödraLars Zetterberg, IVL Swedish Environmental Research InstituteMikael Karlsson, KTH and adviser 2050Gunilla Andrée, Energy Commission SecretariatLars Strömberg, Vasa värme

Hydropower and biological diversity 25 January 2016 Erik Brandsma, Swedish Energy AgencyJesper Nyberg, Svenska KraftnätIngemar Näslund, Swedish University of Agri-cultural SciencesClaes Hedenström, hydropower VattenfallBirgitta Adell, hydropower FortumEllen Bruno, Swedish Society for Nature Con-servationMattias de Woul, WWF

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HEARINGS

Climate change and possible impacts on Sweden’s electricity supply in 205013 April 2015Erik Kjellström, SMHI.

Environmental Management in Industry25 May 2015Annika Helker Lundström, National Environmental Coordinator for Industry

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