Careful Not to Follow Sweden's Haste
August 8, 2019
Sweden and Washington State are very similar. Both have strong “green” movements and are quickly moving to eliminate all carbon-emitting fuels from cars and power plants. The caution for Washington elected officials is not to jam through hastily mandate programs which have significant unintended consequences such as has happened recently in Sweden.
Washington and Sweden are aggressively working to put more electric vehicles on the road. Transportation is Washington State’s largest source of greenhouse gas emissions, but our GHG levels are pale in comparison with China.
Last session our legislature reinstated the sales tax rebate on new electric vehicles. Electric car buyers are rebated up to $2,500 on new electric vehicles that cost less than $45,000. Washington State has a goal of registering 50,000 plug-in electric vehicles by 2020.
Volvo, headquartered in Gothenburg, announced that every car it makes from 2019 forward will have an electric motor, marking the historic end of cars that only have an internal combustion engine (ICE). That means a Volvo will either be a hybrid or battery operated. Volvo is now Chinese owned.
However, when it comes to generating electricity in Sweden, there is a significant glitch. In their quest to immediately end coal, natural gas and biofuel—carbon-emitting—fuels which generate a small, but vital, amount of its electricity, lawmakers passed a three-fold tax increase on those fuels. Reuters reports the tax hike makes them unprofitable to produce power and utilities from Stockholm Exergi AB to EON SE say they will halt or cut power production.
Sweden, a nation with just over 10 million people, gets most of its electricity from hydro, nuclear and wind power. About 10 percent is still generated in combined heat and power plants that mostly uses biofuels, but some older facilities still burns coal or gas.
Meanwhile, because of urbanization, demand for electricity in Swedish cities is starting to outgrow capacity and some utilities are forced to refuse new connections to avoid black outs. Reuters reported a bread factory in Malmo was denied a license to expand because it would consume too much power.
Given a reasonable amount of time, Swedish power providers may be able to re-route exported electricity (11 percent of output in 2019) to cities; however, it takes time to lay cable, build power lines and renegotiate contracts with foreign customers.
Sweden gets half of its electricity from hydro (39 percent) and wind (10 percent). The largest generator is nuclear (42 percent) which is a fuel that some activists want to phase out.
Hydro supplies 68 percent of Washington’s electricity, while coal and natural gas add 24 percent. Combined nuclear, wind and solar generation account for seven percent.
Here’s the point. Well thought out strategies are important. For example, after a carefully negotiated agreement signed in 2011, coal supplied electricity from the Centralia plant will begin to phase out next year and end in 2025. It provides adequate transition time.
Elected officials need to be measured in their deliberations and not act hastily to invoke edicts. Seemingly good spontaneous ideas often carry unintended consequences. That appears to be the case in Sweden with its three-fold increase in taxes on fossil fuels.
Just eliminating existing energy supplies without well-thought out replacement strategies is a recipe for chaos. A better strategy includes developing new technology which can be marketed in countries which expanding their electric grids.
China, which depends heavily on coal and natural gas for the preponderance of its electricity generation, is the world’s largest greenhouse gas emitter. It could benefit from that infusion of technology, but remember dealing with China takes time, patience and detail.
Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.