Market forces will drive energy transition in Sweden – energy minister

Market forces will drive Sweden's fossil fuel phaseout and ultimately determine the fate of nuclear energy, said the country's energy minister Anders Ygeman in an interview with Tagesspiegel Background. While political parties in the country have agreed not to take a political decision to exit nuclear power or to build new plants, two facilities will be shut down for economic reasons this and next year, and the price for wind and solar energy will continue to fall, Ygeman said. "Our conservatives want to subsidise nuclear power, the Greens want to end it. I believe that in the long term the market will answer this question," said Ygeman. Similarly, low electricity prices and a price on CO2 emissions were driving the energy transition in industry and transport, meaning a ban on combustion engine cars, for example, would be "as necessary as a ban on fax machines". Ygeman called German plans for a 10-euro-entry-level carbon price "low, also in a European comparison", but said it was important to now establish a system and make clear that prices would rise. "This signal is changing the dynamics in the management boards, in investments, in the purchase of cars, in the construction of houses. People will recognise the incentive," he said.

In September 2019, Chancellor Angela Merkel’s government coalition decided to introduce a greenhouse gas emissions trading system for transport and buildings, the economic sectors not covered by the EU-wide Emissions Trading System (ETS) for the energy sector and large industry. The proposal stipulates fixed allowance prices for the early years, with a low entry-level price of 10 euros per tonne of CO2 equivalents in 2021. In October, the government presented the first draft of the law to implement the proposal, which has to be decided by parliament. This means the pricing system or the at least the fixed prices could still be subject to change.