Yet another transition

According to the government's energy bill from spring 2024, Swedish electricity producers need to generate twice as much electricity, 300 TWh, by 2045, if the sustainability targets are to be achieved. Doubling electricity generation in 20 years clearly challenges companies and society enormously, but history has proven that it is possible. The fact is that during Vattenfall's first 70 years through to the 1980s, electricity generation doubled basically every ten years. So when Vattenfall presented a roadmap in the summer of 2023 for achieving the target of doubling electricity generation, it was far from being the first time.

When Vattenfall was formed in 1909, the clear goal was to offer cheap electricity to Swedish industry. This was to be achieved primarily by establishing three hydro power plants – Olidan in Trollhättan (commissioned in 1910), Porjus (1914) and Älvkarleby (1915). The year 1909 was also a year of investigations – preparations for Porjus and Älvkarleby were in full swing.  

Three years later, in 1912, Vattenfall generated just over 100 million kWh (100 GWh). Vattenfall's share of the country’s total electricity generation (1.1 TWh) was 11 per cent. By 1928, Vattenfall's share had increased to 35 per cent of Sweden's total electricity generation, which had quadrupled in 16 years to 4.4 TWh.

The Porjus hydroelectric power station was ready to be put into operation in 1914. Place: Porjus | Creator: Hans Blomberg

Extensive investigations

Before the three early establishments in Olidan, Porjus and Älvkarleby, Vattenfall carried out thorough investigations into the presumed application of the electricity and the needs surrounding it.

In preparing to decide on whether to build Älvkarleby, Vattenfall conducted extensive market research through letters and systematic inquiries to industries, cities, etc. The company also sent staff out to talk to prospective customers.

When this power station was planned, it was expected that industry would be the dominant electricity consumer. Vattenfall saw that within a sales area with a 150 km radius, there were around 70 ironworks of varying sizes, around 60 sawmills and 21 pulp and paper mills. There were a number of important industrial towns, such as Skutskär, Gävle, Sandviken and Hofors, north and west of Älvkarleby. Most of these places used steam, either partially or entirely, as their energy source. 

After Olidan, Porjus and Älvkarleby were completed, electricity sales increased sharply, especially during the First World War when domestic hydro power became a valuable asset. There was therefore strong optimism about continued expansion. Vattenfall planned additional power stations according to a master plan drawn up in 1917.  

However, after the end of the First World War, Sweden was hit by a major recession and industrial electricity consumption did not increase to the anticipated extent. But while electricity consumption in industry stagnated, it increased in other areas. The generation capacity that was previously intended for industry was suddenly available to electrify the transport system, i.e. the railways, and to offer cheap electricity to the public.

Once industrial operations regained momentum after the recession, Vattenfall again began to plan for new power stations to meet the expected and likely increase in the need for electricity. In a 1927 appropriation letter, Vattenfall stated that “since an increase of 8% may be considered quite normal, and greater increases may occur in some years, it follows that it is necessary to make immediate preparations for increasing power generation”. In 1929, Vattenfall presented its first multi-year plan spanning five years. The plan included not only new power stations, but also the expansion of existing ones, such as Porjus.

In the 1930s, Vattenfall expanded its power production northward, and a new power station was built at Stadsforsen, north of Sundsvall. Year: 2005 | Place: Stadsforsen | Creator: Hans Blomberg

More power from the north

When it was time for the next multi-year plan, the world and Sweden had suffered the stock market crash of 1929, and Sweden had also suffered the great Kreuger crash. This resulted in a reduction in total electricity consumption. But thanks to the multi-year plan, Vattenfall was able to complete its work programme at the desired pace – despite the change of government. Apart from this slump in the early 1930s, however, electricity demand continued to grow by 7–8 per cent annually.

When the plan was drawn up though, there were not many opportunities for expanding hydro power in southern and central Sweden. The time had therefore come to send power from Norrland to the south. The framework of the multi-year plan from 1934 consisted of three primary parts: building a new power station at Stadsforsen north of Sundsvall, gradually expanding Porjus, and establishing what was known as the Northern trunk line. As early as 1937, power could be transmitted from Porjus all the way down to Västerås. The first unit in Stadsforsen was put into operation in 1939. Due to a sharply increasing demand for power, Vattenfall had to supplement its multi-year plan with several new plants. Between 1928 and 1938, the total power generation in Sweden increased from 4.4 TWh to 8.2 TWh, i.e. almost double the amount. At that time, Vattenfall's share of the total generation was 31 per cent.

In connection with the fuel shortages during World War II, electricity consumption grew rapidly. According to the Elkraftutredningen diagram (SOU 1954:12), electricity consumption increased by approximately 50 per cent during the war years. And the trend would continue during the boom that followed the war. By 1950, consumption had basically increased by another 50 per cent, to just over 17 TWh.

In the 1951 fuel survey, the government's investigators stated in their report Fuel Supply in the Atomic Age (SOU 1956:46) that fuel imports threatened to overwhelm society, both in terms of trade policy and preparedness. The survey estimated that energy demand would double between 1955 and 1980 and that around a hundred nuclear power plants of 100 MW each would be built by 1980. During the 1950s and 60s, electricity consumption increased by around 7 per cent per year, which meant a doubling every ten years, even more than what the fuel survey predicted.

Up to 1970, all forecasts pointed to a continued rise in electricity consumption, but the trend broke in the mid-1970s. This was mainly due to the two energy crises during the 1970s. Total energy consumption fell by 10 per cent during the period 1973–1982. However, the share of electricity in total energy consumption increased.  
Since the start of official statistics in 1912, electricity consumption rose from 1.1 TWh to 101.0 TWh in 1983. This corresponds to an average increase of 6.5 per cent per year. Many electrical power engineers long believed that electricity consumption would continue to double every ten years. For example, in 1967 the Energy Committee believed that electricity consumption in the year 2000 would be between 350 and 500 TWh. The outcome was actually 147 TWh, which meant that since the mid-1980s it had only increased by around 50 per cent – clearly levelling off.

Since the beginning of the 2000s, electricity consumption has not increased at all, quite the opposite. Especially during the financial crisis of 2008–2009, electricity consumption in Sweden decreased. According to the Swedish Energy Agency, both domestic electricity generation and consumption also decreased significantly between 2022 and 2023. Generation decreased from almost 170 TWh to just over 163 TWh, or 3.9 per cent. Domestic consumption decreased from 136.6 TWh to 134.6 TWh, a decrease of 1.5 per cent. The decrease in electricity consumption was related to the sharp increase in electricity prices.

To secure power production for the future, Industrikraft discussed building two new nuclear reactors at Ringhals in the early 2020s. Place: Ringhals | Creator: Annika Örnborg

Industrikraft is formed

An initiative to increase electricity generation was taken in 2008 by forming Industrikraft AB with the forestry company Holmen's CEO Magnus Hall as chairman of the board. Magnus Hall would become CEO of Vattenfall four years later. In addition to Holmen, Industrikraft AB was backed by four other electricity-intensive companies: SCA, Boliden, Stora Enso and Eka Chemicals. Industrikraft was born out of concern for the future energy supply as the Ringhals 1 and 2 nuclear reactors were scheduled for decommissioning in the 2020s. Industrikraft instead began to discuss building two new nuclear reactors: Ringhals 5 and 6. The aim was formulated in the parties’ press release:

“Basic industry in Sweden is now joining forces with Vattenfall to secure future power generation and electricity availability at competitive prices. The aim is to secure industrial operations in Sweden in the long term. The collaboration is also based on our common understanding that there will be a shortage of baseload power when Swedish nuclear power plants reach the end of their service life.”

However, Vattenfall chose to end the project three years later. The argument then was that forecasts pointed to a surplus of electricity and low prices. And thus, no new nuclear reactors were built. Since then, the outlook has changed. In order to meet climate targets, industry and the transport sector in particular must transition to fossil-free energy.  Therefore, the Riksdag has set an electricity consumption target of 300 TWh in 20 years, corresponding to a doubling of today’s figures.

In late summer 2024, a new version of Industrikraft was presented – a collaboration between Vattenfall and a number of electricity-intensive companies in the manufacturing industry for investing in fossil-free power generation. Behind this initiative were Alfa Laval, Boliden, SKF, Stora Enso and the Volvo Group. The purpose of the collaboration was to investigate the conditions for joint investments in new electricity generation. The collaboration would cover issues such as a framework for co-investment, project identification and feasibility assessments pertaining to permits, grid connections and profitability.

Meeting the goal of doubling electricity consumption in 20 years is entirely possible – history has proven that Sweden has managed to do just that many times over.