The main focus of my last blog post was the dramatic (and rapid) decrease in large-scale wind and solar-based electricity production costs, and the ensuing consequences. Now, ten months later, it’s time for an update on what is happening today on the energy/utilities front.
In this blog I’ll take a look at the situation in Sweden. Now, Sweden (as well as Norway and Finland) is a bit of a special case since electricity production is already almost 100% fossil free, with wind power being the lowest-cost alternative for new sites. Compared to many other countries, Sweden is thus very well-positioned to meet the proposed EU goals of zero carbon footprint by 2050. The main challenges for us Swedes is to minimize carbon footprint in transportation, heavy industry, and heating.
Globally, we are rapidly reaching the point where the total cost for renewables is lower than fossil-based production, i.e. when factoring in the significant costs of upgrades in the distribution network, large capacity storage, etc. The intermittent character of wind/solar requires pretty big investments in the electricity distribution grid, as well as new processes and market mechanisms in order to handle peak loads in a smart way*. So, just looking at production costs is not enough.
I recently spent a few days at Almedalen, Sweden’s annual open political festival that takes place in the charming medieval city of Visby, on the Baltic island of Gotland. The week-long event has taken place during the first week of July for fifty years, and it’s a space where not just national politicians gather but where all actors in Swedish society – municipalities, NGOs, media, public and private enterprise – meet to discuss, debate, and maybe even decide on societal issues. The event also includes the full range of stakeholders in the energy sector, from the ministerial level to large and small utilities to entrepreneurs and innovators. While there, I met with a number of people in the industry and listened in on several energy-related seminars.