We met Annika Viklund, CEO of Vattenfall Electricity Distribution, to talk about her role in the Swedish Electrification Commission (Elektrifieringskommission) and the importance of the grid perspective when intensifying the electrification of the nation.
In October 2020, the Swedish Government appointed an Electrification Commission (Elektrifieringskommission) to identify measures that will increase the pace of electrification in the country’s industry and transport sector to support a sustainable environment.
The Commission will, among other things, shed light on financing issues, possible business models and how to secure the electricity supply for charging infrastructure.
Led by the Minister of Infrastructure, Tomas Eneroth, the Commission includes the Special Investigator for Electric Roads and 16 other expert members from businesses, interested organisations, research institutes, universities and colleges, municipalities and regions. Annika Viklund, CEO of Vattenfall Electricity Distribution (Vattenfall Eldistribution AB) is one of them. We met with her to talk about her role in the Commission and the importance of the grid perspective when intensifying the electrification of the nation.
Annika: It feels important and an honour – and it’s great fun. Almost a year ago, an industry colleague and I wrote an article in the national business newspaper Dagens industridiscussing the importance of having a Commission with the distinct purpose of promoting financing and investment in road electricity, as well as the importance of having an electrification strategy. I’m very happy that our input paid off and that I get to be a part of this advisory group to the Minister. It’s an important job for me to participate in this group, and it’s important to gather all the different stakeholders we represent to find the solutions we need in response to this rapid development.
Annika: I believe they have received input from many different players in the energy and transport industries, and they saw an advantage in gathering different types of expertise in Sweden to reach consensus around this question. I believe the reason why E.ON and Vattenfall are involved is because the electricity grid and its capacity for this type of transport are crucial for the Government to achieve its climate goals (including halving emissions for heavy transport in 15 years’ time). The Government need this competence to see the whole picture and we can provide real input from the electricity network side.
Annika: No, I’m rather happy about the group of members I have the privilege of working with. I think the Government has taken a very good approach by having such a breadth of representatives. I’m also glad to see they’ve taken a holistic approach and included flight transport and boat transport, and not only focused on road transport. I believe it all needs to be included.
Annika: No, when starting with something new it’s dangerous to rule something out too early, only to notice there are missing pieces later. This is a natural part of the development – you start wide and then narrow it down.
In five years, or maybe even in two years, we will know for sure what the right path is for heavy transport. I want to emphasise the importance of the Commission’s work in relation to the European system. Sweden is not an isolated island in this, and when it comes to transport in general, and heavy transport specifically, there must be a smooth connection to the entire European network. We know that there are other countries with different views on energy systems – but the function must be there. I think the Commission is well-equipped, in breadth and competence, to enable these important dialogues and solutions.
Annika: I think Swedish companies, stakeholders, and decision-makers have a fantastic focus on how to use the country’s electricity system in the best way to tackle climate change. Almost every producing company in Sweden has an electrification strategy, or similar, in place. To succeed in electrifying industry and the transport sector, we need a holistic approach and a joint roadmap for the whole of Sweden. The transition means a societal change that will require tough political decisions and extensive resources, and it is therefore crucial that we all agree on the way forward, for both production and distribution. I think it’s good that the Government have stated that “the time of pilots is over”, it is now time to act. It adds pressure and an expectation, which I believe is very beneficial for us.
Annika: From my perspective, the challenges can be summarised as time, resources and regulation:
Annika: I wouldn’t say divided opinions, but definitely different perspectives. I believe we have a good dialogue and when working together you learn that things might not be as easy as you first thought, and that there are several other perspectives to account for. We have the strength to make different contributions, and that’s what it takes to get the holistic view.
At the same time, we must also make progress. We are an advisory group, but we must still be very constructive, concrete and be clear on how we can contribute and when.
Annika: We, and companies like PA, have a very important job. I believe the discussion has stalled a little – we need to move away from choosing between the economy OR the climate. The climate goals are a must and they will be achieved in an economic way. I think it is very important that we leave behind the discussion about infrastructure being free. Instead, we must concentrate on having the infrastructure that enables the climate goals to be achieved.
Annika: This is exactly why we need the entire picture – how do we build an infrastructure that enables the electrification? And how can we best use our existing infrastructure to the maximum while avoiding peak loads at the wrong time? We need to make sure the solutions are affordable for the customer, and that involves finding solutions and functions such as flexibility.
Again, here we can benefit from the holistic view that the Electrification Commission can provide. As far as the Commission is concerned, an important part is to make sure we understand the patterns and behaviours, and not just the transport pattern. People will not make plans or change their behaviours based on where the capacity in the electricity grid is. Therefore, we need to be very familiar with where behaviours come from – how will the industries and companies plan, how will the transport companies plan and how will they think when optimising their operations?
Annika: The permit part is important here. A proposition will most likely be handed to the Government this spring. But one must not forget that the requirements for permits are growing continuously, such as in relation to biodiversity. This can be a challenge when looking to shorten these processes. We must, of course, safeguard these requirements but at the same time we must find effective processes. It’s a very difficult question but climate change must have a strong priority.
Annika: Yes, it’s definitely a bottleneck today. As an example, a local authority said to us at Vattenfall that the number of requests to build/expand the electricity grid have in some cases increased from two per year to 25 per week. So yes, I think more administrators are needed, but at the same time we need to utilise digitalisation and smart systems, so things can be handled more effectively than is done today.
Another aspect that I return to is the fact that the electricity grid is not a defined national interest, such as rail or road,
where you have a limit on how long a process can go on for. It is extremely important to safeguard democracy, but it’s not viable to have to wait for 10 years to get a transmission grid in place. I believe that will prevent the industry from investing, at least in Sweden, and it will start to look elsewhere.
Annika: This is according to the Clean Energy Package and the legislation around it. I think it’s incredibly important to be aware that there will be a great focus from Europe on these directives and packages. But at the same time, you must remember that the development is going so fast right now. If you identify a problem today and work on it for a couple of years, the problem might no longer be there when you’ve reached a solution. It’s important that you really focus on solving the right problems here and now.
I think it’s important to see that for everything that comes from the legislator, regardless of whether it’s from a Swedish or European perspective, you have to make sure you solve the problem that’s relevant. The system is changing so fast, so we need to move with agility here – to prevent the legislation from regulating the wrong things.
Annika: Cementa is one example, but it can also be other players who require up to 10 times the available capacity.
I think the important discussion to have here is how to finance this type of change. Is it the individual customer alone that should finance this – or can the state take on some of these investments to enable the transition? If we are to reduce our emissions by 2030, things needs to happen fast.
Annika: This is partly what the Swedish Transport Administration and the special investigator are looking at, so I will not pre-empt their work. But it is important to consider it from the user perspective as I mentioned earlier.
As the Transport Administration are also emphasising, we need to align the development in Sweden with European development and, for example, look at countries such as France and Germany where they are working very hard on it already.
Annika: I want to circle back to what we discussed earlier, the importance of talking about transport in general, including electrification of harbours, airports, regional flights etc. During this pandemic, we haven’t travelled as much, but I’m sure there is a large pent-up desire for travel among many. Humanity has evolved through movement across the globe, and people and goods will need to move. Even if we are not moving so much right now, goods and food still need to be transported to shops or to homes – and this will not change. At the same time, I believe it should be a certainty to be able to travel in a climate-smart way.
Investors want to invest in companies which are going fossil-free. We talk about a fossil-free future at Vattenfall, and that needs electrification. Anna Borg, our CEO, said: “We are climate workers and our job is to find solutions to this.” We need to find solutions to the needs of companies and society. Our needs will not change, people and goods have been moving across the globe for thousands of years and will continue to do so. It is our job to make sure we can do this in a climate-friendly way.
I think we, and players like PA, have a very important job here – we have to provide the vision and explain how we work towards it. We need to explain what the big plan is, what it is that we want to do and how we can achieve it – in terms of climate development and climate work.
At Vattenfall, we have a clear strategy of being fossil free within one generation, but we need help and support from players like PA and other companies in the market to describe the facts and find the right technical solutions.
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