SE Success
Summary of Swedish Success
Summary
Supply of heat to buildings in Sweden is:
+near fossil-fuel free,
+affordable,
+competitive,
+deregulated,
+safe, reliable and security of supply.
We started to decarbonize, decouple CO2 emissions (decreasing) from GDP growth half a century ago, after the oil embargo 1973.
History of DHC in Sweden
District
heating (DH) started in late 1940s, expanded 1960-1980, with pipe networks still in operation. When cities expand, district heating and cooling expand. After the oil
embargo and price increase in 1973, Sweden decided to break the dependency on
oil of the heating sector. While many countries replaced oil with gas, expanded
natural gas grids, Sweden took another pathway: District Heating and Electric
Heating (gradually heat pumps). In the 1970s, we started a transformation that
many countries are planning for the coming decades. District Heating has about
60% market share, almost 100% in urban areas, 60 TWh of totally 100 TWh heat consummption.
District cooling started to expand in the 1990s and is still expanding, with large networks in all major cities.
World Class Achievements
Today, 2023, the entire supply of heating to buildings in Sweden is near decarbonized, almost zero fossil fuels used (less than 2% of total). We have a fast-shrinking gas grid in the south-west of Sweden, and some individual oil boilers. No coal is used, and even fuel for peak production is renewable.
Dense areas in cities are supplied by district cooling or by geothermal free cooling, reducing the risk of urban heat-island problems.
Enablers to Success
Technical Systems
The backbone in the Swedish energy system is fossil-fuel-free electricity, integrated with District Heating (DH) and large portion of sector coupled Combined Heat and Power.
DH is very diversified, capturing surplus heat otherwise wasted, energy-from-waste, geothermal, solar and biomass. Heat pumps capturing heat from sewage treatment plants have been used for many years, connected to all major treatment plants. In the past decade, several data centres deliver waste heat to DH. Since decades, there are no waste land filling in Sweden. Energy from waste and biomass is efficiently converted to heating and power, with minimum air emissions and very small energy losses due to flue gas heat recovery.
Almost 100% of all towns and cities in Sweden have a District Heating network and in many cases several cities are interconnected in large networks, making the supply more optimized. The largest interconnected networks in the world are in Sweden.
District Cooling is supplied in all major cities, sourced from heat-driven-cooling (absorption), free-cooling from sea or boreholes, and from heat pumps (chillers) where condenser side heat is reused.
Market design
The Swedish electricity and heat market was deregulated in 1993. The cooling market has never been deregulated. District heating is not protected by any monopoly policies in regards to obligation to connect, to pricing or to ownership. A building owner is not obliged to connect to District Heating or Cooling, but incentivised by favourable commercial offer. The heating and cooling market is competitive, with District Heating and Heat pumps as alternative, which has led to higher customer focus. There is a variety of ownership of Swedish District Heating systems, large international companies, municipality-owned but also private owned.
The market design makes the heat market financially healthy and in balance. Most District Heating companies are profitable and deliver significant dividend to their owners. Return on Capital Employed (ROCE) is important, as for all business, which also make asset management crucial (see Concepts).
A deregulated domestic market, open and inviting international technology suppliers, has shaped the Swedish technology suppliers to compete.