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Sweden

Sweden

GREEN GROUP CAMPAIGNS FOR ENERGY CHOICE

Wind power is likely to be a popular choice among consumers shopping in Sweden's newly deregulated electricity market. The country's powerful association for nature protection, SNF, has already published guidelines for identifying "green electricity." In future companies expecting to retain SNF's green stamp of approval for their products -- be they washing detergents or paper -- will eventually be required to buy clean power.

Anticipating a rise in consumer demand for green electricity as a result of SNF's influential campaigning, many of Sweden's utilities will be offering two options: normal electricity or green electricity at a higher price, although this price has yet to be specified. The eagerness of utilities to meet the new demand is not just because they fear the might of SNF. The opportunity to profit from the Swedish population's environmental zeal has not escaped their notice.

The greening of Sweden's electricity supply industry is just one of the adjustments now underway following deregulation of the market from the start of this year. From now on every customer -- theoretically -- has the right to buy electric power from any producer. The main distribution net will be managed by a separate state owned company, Svenska Kraftnät and local utilities will split their business into two, with one company for distribution and another for production and sale.

For the first five years small independent producers, defined as power stations of less than 1.5 MW, will be protected. Local utilities are obliged to buy all the power they produce and offer fair prices for grid connection and distribution. Without such protection, independents would have a hard time. Currently Sweden has a surplus of generating capacity, split equally between nuclear and hydro, and the price of power is one of the lowest in the world. There is no economic incentive to encourage investment in wind and other renewables, even though Sweden has voted to phase out all its nuclear plant.

As yet there is no way a consumer can specifically request to buy power from a particular source without paying for an extremely costly metering system. But a flexible approach has been adopted whereby the power industry can calculate the amount of power fed into the grid by green sources such as wind and hydro and demand a higher price. They are even allowed a 10% margin for power from "unspecified sources."

In previous green consumer campaigns, SNF has enjoyed considerable success. Many products are now extremely difficult to sell in Sweden unless their trademark is also accompanied by SNF's green stamp of approval. Demand for chlorine bleached paper disappeared entirely, requiring the entire Swedish paper industry -- the country's largest export business -- to change its production process. The detergent and soap market was subjected to similar treatment by SNF and now 80% of its products are officially recognised as green.

To retain the SNF stamp, though, companies will now have to start considering purchases of green electricity. SNF says it will gradually strengthen its demands for certification of products to include a requirement for the production process to be cleanly powered. Environmental image is so important in Sweden that many companies will choose to buy clean power to retain customer confidence in their products even before SNF obliges them to.

According to SNF's criteria, green electricity is hydro power, wind power and power from cogeneration plants fuelled by biomass. The organisation is now negotiating with several local utilities and power companies on green certification of some of the power they sell.

Aside from industry, large groups of domestic consumers are also likely to be a driving force in the demand for green choice. Sweden's two national associations for housing tenants, which together manage several hundred thousand apartments, are now negotiating with power companies for contracts. Many local associations have already expressed a desire for green electricity, while some have even invested in wind plant.

SNF's power is not restricted to within Sweden's borders. In an interview on German television, SNF's Sindre Magnusson suggested that German customers should demand that products imported from Sweden -- such as paper -- be produced using clean energy. Furthermore, Germans should refuse to buy Swedish goods produced using power from nuclear reactors or coal fired stations. It is with this strategy that SNF hopes to turn Sweden's heavy (energy intensive) industry to green electricity.

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