The energy transition will require huge investments in grids and production over the next few decades. As new stakeholders establish themselves, the existing energy companies need to understand their roles, many of which are new to them.
– “As an energy company, we have to be involved in pushing for the construction of new infrastructure,” says Alf Engqvist, CEO of Göteborg Energi.
Sweden’s electrification is often likened to a paradigm shift. Securing the electricity supply and society’s demand for climate-neutral electricity result in forecasts pointing to the need for more than 100 TWh in additional capacity. Power transmission between northern and southern Sweden needs to be strengthened, existing facilities upgraded, offshore wind power maximised … the list goes on.
Svenska Kraftnät, the company with overarching responsibility for Sweden’s national grid, has investments of SEK 100 billion planned for the period 2022–2031, but there is room for everyone to do their part.
– “My understanding is that many municipal energy companies are wrestling with their role. They’re in the spotlight in a different way compared to perhaps ten years ago,” says Sara Bargi, a project manager at RISE and a strong proponent of Energiklivet, a special initiative to greatly accelerate electrification.
– “In the past, these companies have mostly been considered a source of steady income. Now, though, they’re expected to be climate heroes and solve the municipality’s environmental problems. Many of them have few employees and are perhaps struggling with their profitability. Today, they face many more challenges: customers disconnecting from the district heating network, IKEA selling solar panels, digital startups taking market shares. Their traditional revenue streams are no longer as reliable. Many of them are wrestling with which direction to take,” Sara Bargi explains.
Part of the necessary energy transition
Göteborg Energi CEO Alf Engqvist likens his company to a relatively traditional energy company in a larger municipality. The group encompasses many kinds of energy infrastructure – networks for gas, district cooling, district heating and fibre alongside gas and electricity trading.
– “As regards the electricity grid, we have a monopoly. Electricity, on the other hand, is traded in a completely free market. District heating is somewhere between the two.”
– “The greatest change now, having been focused on supplying the city with electricity and heating, is becoming part of the necessary energy transition. But this is a gradual process, for us and all energy companies,” says Alf Engqvist.
We’ll see more partnerships than before, and partnerships involving more investors
Collaboration as a strategy
The Gothenburg region is experiencing booms in construction and population. Major industrial companies are establishing operations in an already highly competitive market with leading industrial facilities in the automotive, engineering and petrochemical industries. The Port of Gothenburg is the largest in the Nordic region.
– “All of these industries need to complete the energy transition to survive. If they fail to do so, they’ll be out of the picture as there are others in the world who will be able to,” says Alf Engqvist.
Göteborg Energi’s strategy is centred on collaboration. This includes a project centred on carbon capture infrastructure in partnership with the Port of Gothenburg, Preem, Nordion Energi, St1 and Renova.
– “We’ll see more partnerships than before, and partnerships involving more investors. The investments are too great for a lone municipal company.”
– “However, we need to be involved in building new infrastructure for the transition, whether for hydrogen gas, carbon capture, the power grid or charging infrastructure. Not least to get the right connections between new and old infrastructure,” says Alf Engqvist and highlights one of Gothenburg’s assets as a larger city with varied energy use: the opportunity to involve different sectors and to leverage residual resources.
System effects of the transition
Sara Bargi at RISE says that the participants in Energiklivet have earmarked the system integration of heating, electricity and gas as a priority area. Matters get complicated when, for example, flows are altered by the energy transition.
– “Residual heat is often heat recovered from factories. What will happen to it when operations are transitioned? Will it disappear? Will it remain? We may see such system effects and perhaps need to find new collaborations to access new residual heat resources.”
