The grass is green-ish on the Swedish side (part I) 

They say the grass is always greener on the other side. When it comes to energy efficiency, the grass has indeed historically been ‘greener’ in Scandinavian countries than in other places in Europe: their high ambitions regarding energy efficiency in buildings have contributed to the general notion that they are leaders in this field. In energy efficiency, looking into the neighbour’s garden and noticing the grass is greener triggers more than just jealousy, according to US energy efficiency company Opower. It prompts people to take action in their own back garden and reduce their own energy consumption. People’s interest in saving energy is awakened by their curiosity to find out how much more they can save compared to their neighbours.Similarly, and on a much wider scale, energy-efficiency leaders like the Scandinavian states can incentivize other European states to reduce consumption too. European Energy Review looks at one of the most climate-friendly and energy-conscious countries of all, Sweden, and asks whether the grass is indeed green enough on their side to incentivize the less ambitious states to walk their way.

(c) Bengt Nyman
When it joined the European Union in 1995, Sweden vowed to be part of the group of 'green' member states together with Denmark, Austria, Finland, The Netherlands and Germany. The country was from the beginning seen as one of the 'leaders' in EU environmental policy-making. Just three years after Sweden's accession, The Journal of European Policy wrote that Sweden, already exemplary in environmental policies, "wanted more".

"[The Swedish government] linked the room for national policies to the ambition of showing a ‘good example’ to other countries," the study wrote. "The government emphasized the need to combine the example strategy with more constructive pushing within the Union[..].With its ‘good example’ ambitions, Sweden may be regarded as Germany’s most obvious successor".
Austria and Finland, as well as the ‘old’ members Germany and the Netherlands, acknowledge the relevance of national experiences as examples of practicable, feasible policy alternatives during negotiations about specific measures in Brussels. Contrary to Sweden, however, they hardly regard them as vehicles to instigate new policies at the EU level," the report continued.

Eighteen years later, Sweden has kept its ambition - it is still one of the greenest states in the EU – but more recently, experts claim, it has started to lose its claim to fame – at least in energy efficiency.

Nora Smedby, a Phd student of Lund University whose work focuses on local governance for energy efficiency in new dwellings, agrees. “Countries like Germany and Austria appear to have been better at promoting very low energy houses, such as passive houses, at least as compared to Sweden where the progress has slowed down significantly in last years,” Smedby told European Energy Review.

The European Union agreed on a common energy efficiency binding law last year (June 2012)

In Denmark, energy retailers make more money out of selling energy efficiency services than they do from selling energy
after a long, tactful negotiating process led by the Danish presidency. The Danes said they “fought like lions” - in the words of Danish Climate and Energy Minister Martin Lidegaard - for the directive to take shape during their turn at the helm of the EU. But this was not a surprise – the Danes are known for being the most energy-efficient in Europe. In Denmark, energy retailers make more money out of selling energy efficiency services than they do from selling energy.

Unlike Denmark, Sweden did not lead by example during the negotiations on the EU's first-ever Energy Efficiency Directive. Breaking from the image it had created for itself when it first joined the bloc, Sweden this time did not seek to form a 'green alliance' with other states and to put pressure on the adoption of a binding end-user energy saving target.

"Sweden was neutral to positive during the EED negotiations," Brook Riley of green NGO Friends of the Earth Europe told European Energy Review. "They have a rather bizarre position of being pro efficiency, but anti binding targets. For most countries this would mean not doing any efficiency at all, but Sweden seems a bit different. Perhaps this is due to their very strong support for renewables - it is easier to increase the share of renewables if you reduce overall energy consumption," Riley said.

Swedish public housing bodies warned that the new law would “bring energy poverty to Sweden”.

“Heating is normally included in the rent in Sweden, which is not the case in many other Member States,” they wrote in an article ahead of the EED final round of negotiations. “If the cost is charged directly to the tenant – for payment according to actual consumption – it would eliminate any incentive for the property owner to take general energy efficiency improvement measures, such as installing additional insulation and replacing windows. This could also cause the problem of energy poverty, non-existent in Sweden today, to emerge.”

One of the articles Sweden did not throw its weight behind was the one requiring each member state to implement an energy efficiency obligation scheme for energy companies, ensuring annual energy savings equal to 1.5 % of their energy sales, or take other measures to achieve an equally-sized energy saving. But this reluctance was due to national specifics - previous analyses have shown that the obligation scheme is not a cost-efficient means to achieve the required energy savings in Sweden and the country has decided to base its savings on other mechanisms.

Lack of economic incentives

“Sweden has slowed down compared to what it did before [on energy efficiency],” Nils Borg, Executive Director for the European Council for an Energy Efficiency Economy (eceee) also told European energy Review, adding that government funding for energy efficiency has been decreasing.

“There is a consensus between municipalities that it [energy-efficient refurbishment] is needed, but they say they have no cash,” Borg said. This is despite the fact that since 2010, municipalities and county councils have been able to seek energy efficiency support from the Swedish Energy Agency.

Sweden is in many ways an “energy efficiency leader”, who has done generally very well, especially in terms of energy-efficiency requirements for technology,

Sweden is still one of the greenest states in the EU – but more recently, experts claim, it has started to lose its claim to fame
setting up a working municipal network and pursuing interesting projects in the private sector. Sweden is still one of the greenest states in the EU – but more recently, experts claim, it has started to lose its claim to fame. “We are very much trapped in an economic view and like this we are going nowhere,” Borg said, explaining that the rationale is that energy efficiency measures are welcome, but only as long as there are economic incentives in place.

“Regarding building codes, some say they just ramp up costs,” Borg said. “There’s also a lot of focus on the first costs,” he said, referring to the fact that energy efficiency investments require substantial initial capital and the return on investment is usually long. Borg also said there are too many split incentives when it comes to refurbishing houses in Sweden. “We have [energy efficiency] investment rebates, but only private owners are allowed to access them. […] If the building one lives in is owned by an association, the tenants in the apartments of that building do not qualify for energy efficiency refurbishments,” he said.

Part II of this article appeared 19th December 2013