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Inter-Party Agreement on Swedish Energy Policy
( unauthorized translation )
1. The goals for energy policy
2. Nuclear power
3. A programme for an ecologically sustainable energy system
4. The role of the State
5. Atomic liability
6. Extended cooperation on energy, environment and climate between the countries around the Baltic Sea
7. Climate policy
8. Energy taxation

The goals for energy policy

The goals for Sweden´s energy policy is to secure the long-term and short-term supply of electricity and other energy in internationally competitive terms. Energy policy shall create the necessary conditions for an efficient use of energy and a cost-effective supply of energy with a low negative impact on health, environment and the climate, and facilitate the transformation into an ecologically sustainable society. In this way a good economic and social development in Sweden is furthered.

Energy policy shall contribute to the creation of stable conditions for a competitive industry and for the renewal and development of Swedish industry. Energy policy shall also contribute to an extended cooperation on energy, environment and climate in the Baltic Sea region.

Sweden´s electricity supply shall be secured by means of an energy system which is based on lasting, preferably indigenous and renewable, energy sources and an efficient use of energy. Energy is to be used in the most efficient way with regard to the total resource endowment. Strict standards shall be applied with regard to safety, health and environmental care in the use and development of all kinds of energy technology. Nuclear power is to be replaced by energy conservation, conversion to renewable energ y sources and electricity production technology that is environmentally acceptable. The use of fossil fuels should be kept at a low level. Natural gas is the most advantageous fossil fuel and the existing natural gas grid should be utilized. The National rivers and the river sections which have been excluded by Parliament from exploitation will continue to be protected in the future.

Secure supplies of electricity at a reasonable price are important pre-requisites for the competitiveness of Swedish industry. Energy policy shall be designed so as to maintain this prerequisite. Increased production and economic activity are imperatives for employment and consequently for our future prosperity. On the basis of the policy for economic growth which has been adopted by Parliament, electricity consumption needed for industrial production should be allowed to increase during the next decade. A n efficient use of energy shall be promoted in industry as well as in other sectors of society.

The phasing-out of nuclear power and the transformation of the energy system

In 1980 Parliament stated (prop. 1979/80:170, NU 70, rskr. 410) that nuclear power should be phased out at a pace which is compatible with the need for the electrical power necessary to maintain employment and prosperity. Furthermore, Parliament stated that it should be established that the last nuclear reactor in Sweden should be closed down by the year 2010.

In 1991 Parliament adopted guidelines for energy policy (prop. 1990/91:88, bet. 1990/91:NU40, rskr. 1990/91:373). The energy system shall be developed by employing and maintaining cleaner and more environmentally friendly technology for supply, transformation, distribution and use. This is to be done on the basis of high cost-effectiveness. The beginning and the pace of the phasing-out of nuclear power should be determined on the basis of the results of the energy efficiency improvements, the supply of el ectricity from environmentally acceptable power production and the possibilities to maintain internationally competitive electricity prices.

A strategy for the continued transformation of the energy system is now laid down. It concerns in particular electricity production and a more efficient use of energy. The goal is that the energy system shall become ecologically and economically sustainable. Energy supply shall to a dominant part be based on renewable energy sources.

The guidelines for energy policy, as agreed in 1991, should be maintained. Both economic and environmental considerations indicate that the transformation and development of the energy system should take place during a period which is long enough to make it possible to achieve the goals set out in 1991. Problems will occur with regard to employment, prosperity, competitiveness and the environment, if all nuclear power production is to be phased out by 2010. According to the Parties, no fixed date should be set for the closing down of the last nuclear plant.Thereby, a sufficiently long period is granted for the transformation of the energy system. The transformation shall therefore start as soon as possible.

2. Nuclear power

In the following, a description is given by the measures which are to be undertaken in order to make possible a closing down of the first reactor by 1st of July, 1998, by the latest, and the second reactor by, at latest, 1st of July 2001.

A proposal for a law on the decommissioning of nuclear power plants should be submitted to Parliament in 1997, early enough to allow for a entry into force by 1st of January, 1998. The law should prescribe that permits to operate nuclear reactors in order to produce nuclear energy can be revoked by the government. Such decisions should be made on the basis that the reactors should be closed down in the order and at those points in time which are most beneficial in view of Parliament´s decision on the trans formation of the energy system and its implementation. The criteria should also imply that the decommissioning should start with those reactors which are least appropriate from a localization point of view.

The localization of the Barsebäck plant is inappropriate. Negotiations are to be opened with the owner of the Barsebäck plant on a closing down of a reactor before July 1, 1998, and a second reactor before July 1, 2001. The government will, immediately after the entry into force of the law, make a decision on the closing down of the nuclear reactors Barsebäck 1 and Barsebäck 2. A precondition for the closing down of the second reactor is that the resulting loss of electricity production can be compensated through new electricity production and a reduction of the use of electricity.

Vattenfall AB is to assist in making it possible to close down the Barsebäck plant according to the agreed schedule. Vattenfall will be assigned the task to, as one of its major duties, contribute actively to the transformation of the energy system. Following the government´s contacts with the main owners of Sydkraft, our understanding is that it is possible to close down the first reactor by July 1, 1998.

Measures are undertaken in the coming years, in order to compensate for the loss of electricity from the two reactors through more efficient use of electricity, conversion from electricity to other forms of energy, energy conservation and supply from other energy sources.

The necessary conditions are to be created in order to utilize the existing natural gas grid more efficiently.

A new long-term programme for transformation of the energy system is being implemented for the development of an ecologically sustainable energy supply. The programme aims at developing new energy technology for supply and conservation of electricity and other forms of energy.

The purpose is to realize an ecologically and economically sustainable energy supply which is to a dominant part based on renewable energy sources. The aim is also to provide Swedish industry and the society as a whole with electricity from ecologically sustainable energy sources at internationally competitive prices. Sweden should essentially be self-sufficient with regard to electricity.

Through the closing down of two reactors and by the implementation of the long-term programme, good conditions are created for new competitive alternatives for electricity production to be successively introduced into the Swedish energy system. In this way, the continued transformation towards an ecologically sustainable society can be realized at reasonable costs.

New electricity production capacity and a reduction in the use of electricity are prerequisites for the phasing-out of additional reactors. After the closing down of the Barsebäck plant, an assessment is to be carried out with regard to the development of electricity prices, investments, environmental effects, employment and the distribution of incomes, as well as the effects on the functioning of the electricity market etc. The effects of the energy policy programme shall be evaluated and, together with t he experiences gained from the closing down of the reactors in Barsebäck, form the basis for future decisions on the continued transformation.

Before the end of the next election period decisions are to be taken on the realization of the continued closing down of nuclear reactors.

3. A programme for an ecologically sustainable energy system

Short-term measures to reduce the use of electricity and to add new productive capacity

Special measures are to be undertaken in order to reduce electricity use and to realize an expansion of heat and power production based on renewable energy sources. The total outcome is expected to correspond to the annual production of electricity at the Barsebäck plant.

The measures include a reduction in the use of disconnectable electric boilers in the district heating system, measures for conversion and reduction of the power requirements in buildings with resistant electric heating systems, increased connection to district heating, an increased supply of new electricity production from renewable energy sources partly through an investment support scheme and technology procurement. Special efforts are made in order to develop the production of heat and power production in the south of Sweden.

Energy conservation is to be supported by means of information, advisory services and training in the efficient use of energy, and by the testing of products, equipment and energy systems. Advisory services in the municipalities and the training of e.g. municpal advisers shall be funded through state support. The market introduction of new, energy-efficient technology shall be accelerated by means of technology procurement. It is vital that also the industrial sector is embraced by the measures for a more efficient use of energy.

Methods are to be developed in order to make it possible to assess the efficiency and the results of the energy policy programmes. This is a task for the new energy authority.

A long-term programme for an ecologically sustainable energy system

A new energy policy programme is being introduced for research, development and the demonstration of ecologically and economically sustainable supply, transformation, distribution and use of energy. Cooperation between the state, industry and the research society is necessary.

The main purpose of the programme is to reduce the costs for utilizing renewable sources of energy, so that these can to a larger extent be used as economically viable alternatives to fossil fuels. Technical development and market development should be supported simultaneously. The measures should be directed primarily towards an increased use of biofuels, but also to technology related to wind power and hydro-electric power, heat storage techniques etc. In the longer term, the measures should also embrace technology for fuel cells and batteries, artificial photo-synthesis, as well as solar cells and solar heating within the framework of the energy research programme.

Energy conservation should be promoted primarily by technology development, information and training, measures to reduce the use of electricity for domestic and operational use in buildings and measures for increased energy efficiency in industry. Efficient global solutions should be promoted through system studies and through increased knowledge on the interrelationship between energy, the environment and economic growth.

Funding of the programme

The programme for energy policy which the Parties have agreed upon will entail an overall need for state funding of some 9 billion Sw.Crs during a period of seven years. The programmes are to be fully financed.The agreeing Parties should agree on appropriate mechanisms for funding.

4. The role of the State

A new, ecologically and economically viable, energy system is to be developed. Sweden´s electricity supply should continue to be based mainly on indiginously produced electricity.

The most important task for the State during the transformation period is to provide the framework within which undertakings and consumers are to act.

The state ownership of around half of the electricity production capacity through Vattenfall AB is an important asset. The main task of Vattenfall is to, with due regard to commercial principles, contribute to a Swedish supply of electricity which is ecologically and economically sustainable, and which provides industry and the rest of society with electricity at competitive prices. Resources which have been created within Vattenfall shall be used for the development of new technology for electricity produ ction and for investments needed for the transformation.

This alteration of Vattenfall´s role should be expressed in the Parliamentary guidelines concerning Vattenfall´s activities. Vattenfall AB should remain state-owned.

A new central energy authority is to be set up by 1 January 1998 at the latest, with responsibility for authority powers in the energy field. The authority will be assigned responsibility for carrying out the greater part of the energy policy programme, and will be given coordinating responsibility for the transformation measures. The new authority shall monitor the realization of the programme and provide the basis for an assessment of the measures and for the report of the effects of the closing down of the reactors in Barsebäck.

Affärsverket Svenska kraftnät (The National Grid Company) has the system responsibility for the Swedish electricity system. Svenska kraftnät also owns the major part of the international interconnectors, and has coordinating responsibility for foreign trade in electricity. The company has the central task of monitoring the significance of foreign trade for Swedish security of supply. To mitigate imbalances in the trade in electricity between the open Swedish market and the more closed markets of the rest o f Europe, state control should be strenghtened. The leading principle shall be that the state, through Svenska kraftnät, should own and administer future international interconnectors. Only Svenska kraftnät should be allowed to be granted concessions for future international interconnectors.

Statens kärnkraftsinspektion (SKI, the Nuclear Power Inspectorate) and Statens strålskyddsinstitut (SSI, the Swedish Radiation Protection Institute) are responsible for the tasks of monitoring nuclear safety and radiation protection. The closing down of the reactors at Barsebäck will initially call for increased efforts by SKI and SSI. The authorities should be provided with extra financial resources in order to monitor safety at the nuclear enterprise during the completion of the closing down process. It is of vital importance to keep up and strengthen the resources of the safety authorities in a long-term perspective, in order to maintain public control. The demands for the monitoring activities of SKI will increase when the planning of the final deposition of nuclear waste is successively transformed into concrete measures. SSI will also, to an increasing extent, be involved in this work.

These authorities must have at their disposal special resources in order to maintain and employ special competence in this field. The public control and the State´s overall responsibility for nuclear safety has to be maintained. The reinforcement of the resources deemed necessary should be financed by means of higher fees for the nuclear enterprises.

5. Atomic liability

The Swedish Act on Atomic Liability (1968:45) is based on international conventions. According to the law, if the economic compensation provided for by the law or by the convention system is not sufficient to fully cover the damage which has occurred, additional compensation can be granted through the state budget. No particular level of compensation is guaranteed, however.

The Parties are in agreement that the liability of compensation for the plant owners should be increased. The issue of increased liability for the nucler power companies is at present being studied by the Swedish Cabinet Office and the Ministries, and a proposal for a revised legislation is under way. The government intends to, during the current year, submit a Bill to Parliament on changes to the Act on Atomic Liability, aiming at an increased liability for the nuclear enterprises.

6.Extended cooperation on energy, the environment and the climate among the countries around the Baltic Sea

A well-functioning and environmentally designed energy supply is of fundamental importance for economi and social development in the Baltic Sea region. There is a large potential for cost-effective measures with regard to energy conservation, carbon dioxide emissions, acidification and nuclear saftey. The new situation in the Baltic Sea region gives Sweden the opportunity to actively participate in the development of a new energy system around the Baltic Sea. This will be beneficial to both our country and the other countries in the region.

Since the reform process in the Central and East European countries began at the end of the 1980´s, Sweden´s cooperation with those countries has formed an important part of Swedish foreign and security policy. It is of considerable interest to Sweden that the nations of Central and Eastern Europe can complete the present restructuring of their societies, and become integrated parts of a European community.

Parliament has granted one billion Sw.Crs. in order to develop the cooperation in the Baltic Sea region. A number of concrete projects are under way in the energy field. Sweden cooperates closely with both other countries of the region and international financial institutions.

An improved energy infrastructure in the Baltic Sea region would effectively contribute to an improved security of supply in Sweden and the rest of Europe. Sweden will actively engage in an integration of the national energy systems in the Nordic countries and the Baltic Sea region.

It is of great interest to Sweden to reduce the risks connected with nuclear power in the Baltic states and Eastern Europe, and to develop an energy system around the Baltic Sea which is secure, well dimensioned and ecologically sustainable. A programme for energy efficiency, conversion and measures to improve the environmental conditions in plants for electricity and heat production around the Baltic Sea is an important factor in the cooperation. These measures also form a strategic element in Sweden´s cl imate policy.

The efforts to improve nuclear safety in, inter alia, Russia and the Baltic states should be continued. SKI channels the Swedish support to nuclear safety in the Baltic States and Eastern Europe. The work to improve nuclear safety in these countries, which is sponsored by many countries, is of the utmost importance for safety in our neighbourhood. The purpose of the actions is above all to remedy apparent safety deficiencies in reactors which, from an energy supply point of view, cannot be closed down inst antly, and to strengthen the work of independent safety authorities in their work in calling for improvements and monitoring safety at these reactors. It is important that this work continues.

7. Climate policy within the field of energy

Emissions of carbon dioxide emerging from the combustion of fossil fuels affect the climate. Therefore it is vital to the largest extent possible to avoid fossil fuel combustion. This can be achieved through active measures for energy conservation and through the utilization of renewable sources of energy. Among the different fossil fuels available, natural gas gives rise to the lowest emissions of carbon dioxide.

The Swedish climate policy measures in the energy field have been centered on the following areas: On the one hand research, development and utilization in Sweden of energy-efficient technology for conservation and use of renewable energy sources, and on the other hand measures for increased energy efficiency and conversion to renewable energy sources in the Baltic States and Eastern Europe.

In spring 1993, Parliament adopted guidelines for the Swedish climate policy (prop. 1992/93:JoU19, rskr. 1992/93:361). A national strategy was laid down, implying that emissions of carbon dioxide from fossil fuels should be stabilized at the 1990 level by the year 2000, and should be further reduced thereafter, and that climate policy must be formulated in an international perspective and in the context of international cooperation.

The measures undertaken so far under the Climate Convention have proved to be unsufficient to achieve the aims of the Convention. Negotiations on further commitments and measures are now being held, with a time horizon beyond the turn of the century. Successful international cooperation presupposes an equitable distribution of commitments and costs. The differing points of departure and the conditions in the individual countries should, as well as the principle of a cost-effective distribution of measures according to the Climate Convention, be taken into account when determining the commitments within the framework of the Convention. Due regard should be taken, inter alia, to measures already undertaken and per capita emissions of gases which affect the climate.

Sweden should carry out cost-effective measures internationally as well as nationally. The demands for an equitable distribution of the cost responsibility and of cost-effectiveness have to be maintained. The Swedish climate strategy should be drawn up in such a way that the emissions of carbon dioxide in Sweden are limited to the greatest extent possible, with due regard to competitiveness, employment and prosperity. Production and use of alternative fuels shall be supported as parts of the efforts to red uce environmentally harmful emissions from the transportation sector.

The development towards an internationalized electricity market makes it necessary to coordinate to the greatest extent possible measures against emissions from electricity production. Sweden should make efforts to reduce emissions from sectors which are exposed to international competition, such as the energy-intensive industry.

Sweden should, as a member of the European Union, work towards a common climatic policy and should actively promote international cooperation in the climatic field. In particular, Sweden should engage in the development of efficient policy means within the framework och the climate policy of EU and the Framework Convention on Climatic Change. Sweden should also cooperate with other countries in the way envisaged by the Climate Comvention, through so called joint implementation. Sweden should promote the ad option of targets implying reductions of emissions after the turn of the century and leading to stabilization of primarily carbon dioxide concentration at a level that would prevent serious climate change.

8. Energy taxation Energy taxation shall create favourable conditions for the international competitiveness of Swedish industry. It shall be economically profitable to invest in the production of goods and services in Sweden, and it shall also be advantageous to invest in ecological energy technology, for example for efficient use of energy. The production tax on nuclear power shall be designed according to these principles. The taxation system should provide driving forces for energy conservation and conversion to renewable energy sources, while not negatively affecting the international competitiveness of the Swedish industry. The taxation scheme should encourage electricity production based on renewable energy sources. The environmental advantages of natural gas, as compared to oil and coal, shall be reflected.





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