ARTICLE IN PRESS

Energy Policy 33 (2005) 1445–1459

Industrial DSM in a deregulated European electricity market—a case

study of 11 plants in Sweden
. G Karlsson
Louise Trygg*, Bjorn
.
Department of Mechanical Engineering, Division of Energy Systems, Linkoping .
Institute of Technology, Linkoping S-581 83, Sweden

Abstract

In 2004 Sweden will become part of a common European electricity market. This implies that the price of electricity in Swedish
will adapt to a higher European electricity price due to the increase in cross-border trading. Swedish plant is characterized as more
electricity-intensive than plant on the European continent, and this, in combination with a higher European electricity price will lead
to a precarious scenario.
This paper studies the energy use of 11 plants in the municipality of Oskarshamn in Sweden. The aim is to show how these plants
can reduce their electricity use to adapt to a European level. We have found that the plants could reduce their use of electricity by
48% and their use of energy by 40%. In a European perspective, where coal-condensing power is assumed to be the marginal
production that alters as the electricity demand changes, the decrease in the use of electricity in this study leads to a reduction in
global emissions of carbon dioxide of 69,000 tonne a year.
Electricity generated in Sweden emits very low emissions of carbon dioxide and have thus consequently very low external cost.
The freed capacity in Sweden could therefore replace electricity generated with higher external cost and as a result lower the total
external cost in Europe. The emissions from the saved electricity could also be valuable within the EU emissions trading scheme, if
the emissions calculation is done assuming the marginal electricity is fossil fuel based.
r 2004 Elsevier Ltd. All rights reserved.

Keywords: Deregulated electricity market; Electricity reduction; Global emissions

1. Introduction shown in Table 1 are the electricity markets in the UK,

The EU has prescribed common rules for the internal
market in electricity in its EU Electricity Directive (96/
92/EC). The objective of the directive is to open up the
electricity market through the gradual introduction of
competition, thereby increasing the efficiency of the
energy sector and the competitiveness of the European
economy as a whole. Full opening of the energy markets
is a key factor in improving Europe’s competitiveness
and the welfare of the citizens. Electricity is the most
important secondary source of energy in the European
Union and the electricity industry is one of the largest
sectors of the economy in Europe. Annual production is
some 2500 TW h, generating turnover of around EUR
150 billion (COM 125, 2001).
Deregulation of the electricity market has begun in
the countries within the EU region, but the degree of
market opening differs between Member States. As
*Corresponding author. Tel.: +46-13-281000; fax: +46-13-281788.
E-mail address: loutr@ikp.liu.se (L. Trygg).
Norway, Sweden, Finland and Germany already fully
open to competition, i.e. both industrial and domestic
consumers can choose their electricity supplier. Market
restructuring is well advanced in Denmark, too, but
other EU countries have not progressed as far.
According to an amended EU proposal, all plants
should be free to purchase electricity from the supplier
of their choice within the EU region from 1 January
2004 (COM 304, 2002) when the electricity markets
between the countries will be deregulated. This means
that all countries will gradually participate in a common
electricity market that will permit producers and
distributors to sell electricity to customers anywhere in
the EU. In the Communication concerning ‘Completing
the internal energy market’ (COM 125, 2001), it is
concluded that, to date, the effects of the market
opening have been positive, with regard to both the
development of the market as such and the impact of
market opening on related important policy fields, such
as public service objectives, environment and security of
supply. The intention of the Electricity and Gas

0301-4215/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2004.01.002
 ARTICLE IN PRESS
1446 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459

Table 1 Electricity price

EU electricity market opening—2000

Country Electricity market Continental electricity price

opening (%) Deregulated and
competitive
European
Directive—min 30 electricity market
Austria 30
Belgium 35 Before deregulation in Swedish electricity price
Denmark 90 Sweden, Norway and
Finland
France 30
Germany 100
Greece 30 Deregulated Nordic electricity market
Ireland 30
Time
Italy 35
Luxembourg 40 Fig. 1. A probable scenario for the progress of electricity prices in
Netherlands 33 Sweden. Source: Dag (2000).
Portugal 30
Spain 54
Sweden 100
United Kingdom 100 a European ‘‘equilibrium’’ electricity price. A single
EU—average 66 European market with higher marginal cost for elec-
Source: COM 125 (2001).
tricity generation will thereby lead to higher electricity
prices in Sweden. Based on the argumentation above, a
most possible scenario of how the electricity price may
Directives is the creation of one truly integrated single develop in Sweden when facing a deregulated European
market, not 15 more or less liberalized but largely electricity market in the long term is described in Fig. 1.
national markets. It is therefore encouraging that cross- Sweden is characterized as energy dimensioned system
border is progressing. where the electricity price varies over the year, while the
The price of electricity within the European countries electricity supply system in the continental Europe is
varies depending on different national markets with characterized as power dimensioned with changes in
sometimes modest trade across the borders. Sweden, electricity price over the day. Since the Nordic markets
Finland and Norway have low electricity price com- constitutes only a minor portion of the common
pared to other European countries. The low electricity European it is likely that the conditions on the
price in these countries can be explained by their supply European continent will be valid for the entire common
system, which is mainly based on hydroelectric power European market including Sweden.
plants and nuclear power plants with low operating cost. In Sweden, the use of electricity per capita is the
Other countries such as Denmark and Germany where fourth highest in the world; only Norway, Iceland and
the electricity supply system are primarily based on Canada have a higher consumption. In industrialized
thermal power plants fuelled by coal with high operating European countries such as Germany and France, per-
costs, the electricity price are higher. capita electricity use is less than half the electricity use in
In a deregulated market with many producers and Sweden (SEA, 2000). A large amount of electricity is
consumers, the competition should drive prices to used in Sweden for non-electricity specific purposes, and
marginal cost according to basic economical theory. it is also common to use electricity for heating. The same
The electricity price in a deregulated European elec- pattern can be seen in industrial electricity use. A
tricity market should therefore in the long run level out comparison between Volvo’s factories in Sweden and
marginal cost of electricity generation in the European Belgium shows that electricity use per produced car in
system (Sundberg, 2001). Volvo’s Swedish facility is twice as high as in the
Since the price of electricity in the countries of the EU company’s facility in Belgium (Dag, 2000).
is almost twice as high as in Sweden (Eurostat, 2002) it In a benchmarking study of Electrolux factories,
implies the Swedish electricity producers to sell elec- (
Nord-Agren (2002) has described a correlation between
tricity to consumers in the EU to a much higher price low electricity price and high electricity use and the
than to Swedish consumer on a deregulated European converse, high electricity price and low electricity use.
electricity market. As a consequence, the electricity price The low electricity price in Sweden could therefore be
in Sweden will rise and the electricity price on the one explanation for the higher use of electricity in
European continent will decrease in the same way as the Sweden compared to other countries in Europe.
Swedish electricity price decreased after the deregulation The analyses of the Volvo factories and the factories
of the Nordic market. A fully deregulated electricity in the Electrolux group presented above seem to indicate
market in the EU with no restrictions on transfer that electricity price multiplied by electricity use is
capacity will therefore most likely gradually level out to constant which means that if the price of electricity were
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459
to rise, the use of electricity would decrease. This
phenomenon of rising electricity use with decreasing
electricity price can be explained by the theory of price
elasticity. Every product has price elasticity. If the price
of a product would rise the demand will decrease, partly
because of the customer will effective their use and
partly because some customers will choose another
supplier. Price elasticity can be defines as volume=con-
stant  priceexponent. If the exponent equal to minus one
the product is said to be completely price elastic. An
increase in price will then give raise to a decrease in
demand.
This assumption implies that a common European
electricity market leads to higher electricity price for
Swedish energy users. Since Swedish plants is character-
ized by higher electricity use compared to plants in the
EU region, the combination of high electricity use and a
high electricity price will lead to an unsustainable
situation for Swedish plant. With a common electricity
price in the EU it will be necessary for Swedish plant to
obtain the same electricity use as plant in other
European countries. Given these assumptions, Swedish
plants will need to focus on reducing their electricity
usage and changing the relation between electricity and
fuel in order to maintain their competitiveness with
plants in other EU countries.
Producers and consumers are mutually dependent
parts of the energy system. An understanding of future
development in energy use and knowledge of future
changes in industrial energy use will provide the
opportunity for an optimal use of supply resources.
In continental Europe, as well as in the Nordic electric
power system, it is usually coal condensing power plants
that have the highest variable cost and thus work as the
marginal source of electricity. The principle of coal
condensing power being on the margin of Swedish
electric power system is supported in a report from the
Swedish Agency of Energy (SEA, 2002) where it is
claimed that coal-condensing power has been the last
dispatched source of power that alters as the demand
decreases or increases the last years. The same report
also states that in the short run coal-condensing power
will remain the marginal source and in a longer
perspective the marginal source in a European system
will be generated in natural gas based power plants.
Ka( geson (2001) makes the same observation and claims
that marginal changes in the Swedish demand for
electricity will increase or reduce production in neigh-
bouring countries’ coal-condensing plants. Ka( geson also
assumes that in perhaps 20 years, natural gas combines
cycle generation will take over as marginal source of
electricity.
Electrical efficiencies of a coal-condensing plants are
normally between 35% and 45%. However it should be
the plants with the poorest efficiency that supply the
margin according to the economical theory presented
1447
Fig. 2. European electricity market. Source: Karlsson (2001).
earlier. Assuming the marginal power production with a
33% electrical efficiency, each MW h of electricity
generated in such a coal fired condensing plant thus
releases approximately 1 tonne of carbon dioxide
.
(Sjodin, 2003) (Fig. 2).
This above argumentation means that coal conden-
sing is the marginal source in Sweden as well as in the
rest of the EU, which is an important assumption for
this study. As a consequence to that, any reduction in
electricity use in Swedish plant will thus mean lower
global emissions of carbon dioxide in a European
system. One MW h reduced electricity use in Swedish
plant will therefore imply a reduction of emissions of
carbon dioxide with 1 tonne.
In this paper, we study the industrial demand side
management in a deregulated European electricity
market by analysing how 11 plants in a Swedish
municipality can reduce their use of electricity in order
to adapt to a European level of electricity use. We
examine what changes can be made and the impact of
these changes on global emissions of carbon dioxide
when coal condensing is the marginal source in a
European system. We also analyse the economical
benefits of reduced electricity usage for the 11 plants.
The structure of the paper is as follows. In the Section 1
environmental benefits of reduced electricity use in a
deregulated European electricity market are shortly
discussed. In Sections 2–4 the case study is presented
in which the electricity use of 11 plants in the Swedish
municipality is adjusted to a European level.
1.1. Reduced emissions from saved electricity could be
valuable within the EU emissions trading scheme
Reduced use of electricity in Swedish plant gives
benefits to the global environmental when coal conden-
sing is the marginal source in a deregulated European
electricity market it. Today the climate problem is one of
the most important global environmental issues, and in
its Green Paper (COM 769, 2000), the EU Commission
emphasizes that greenhouse gas emissions in the EU
region are on the rise. Sweden has signed and ratified the
 ARTICLE IN PRESS
1448 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459
UN Framework Convention on Climate Changes,
which was adopted in Rio de Janeiro in 1992.
Conferences have been held regularly since then, and
at the Third Conference of Parties, in Kyoto in 1997, a
protocol was adopted setting out limits on the green-
house gas emissions of industrial countries. Under the
protocol, the EU region has committed itself to reducing
its emissions of six greenhouse gases by 8% between
2008 and 2012 compared to their 1990 levels. The six
greenhouse gases listed in the Kyoto protocol are
carbon dioxide, methane, nitrous oxide, hydrofluoro-
carbons (HFCs), perfluorcarbons (FCs), and sulphur
hexafluoride (SF6).
According the terms of EU burden sharing agree-
ment, Sweden, with its relatively low per capita
emissions of greenhouse gases, is entitled to increase
emissions by up to 4%. The aim of the Swedish climate
policy, however, is that emissions of greenhouse gases
are to be at least 4% lower in 2010 than they were in
1990. Emissions should be counted as carbon dioxide
equivalents to comprise the six greenhouse gases
(Government Bill, 2001/02: 55), (COM 87, 2000).
In a European deregulated electricity market coal
condensing power is assumed to be the marginal source,
any reduction in electricity use in a plant, means that the
specific plant reduces its global emissions of carbon
dioxide. Given that assumption, adapting Swedish plant
to a European level of electricity use will facilitate for
Sweden to meet its aim to reduce the emissions of
greenhouse gases with 4%.
The Kyoto Protocol also introduced three interna-
tional mechanisms without which the Protocol is
unlikely to enter into force. These mechanisms are
intended to facilitate the cost-effective implementation
of the Protocol. One is the international trading of
greenhouse gas emissions that is to begin in 2008.
Emissions trading is a scheme whereby companies are
allocated allowances for their emissions of greenhouse
gases according to the overall environmental ambitions
of their government, which they can trade subsequently
with each other. Emissions trading between developed
countries imply that a country that reduces its emissions
in excess of its commitment can sell emission rights to a
country that is having difficulty in meeting its target.
The European Commission have put forward a draft
Directive on emission rights trading in October 2001.
The draft Directive proposes opening up trading for
power and heat producers and certain other energy-
intensive industries, such as steel, cement and pulp. It is
not yet clear how the emission rights are to be allocated
(Government Bill, 2001/02: 55).
If the rules of emissions trading would allow the
emissions calculation to be done assuming marginal
electricity production is coal condensing power, the
emissions from saved electricity could be valuable within
the EU emissions trading.
1.2. Freed electricity capacity in Sweden can lower the
total external costs in Europe
In 2000, 38% of Swedish electricity was supplied by
nuclear power and 55% by hydropower; only a small
share of approximately 6% was supplied from industrial
and municipal combined heat and power. Forty per
cent of the electricity production in CHP plants was
supplied by biomass-based cogeneration (SEA, 2001).
Combustion of biomass is regarded as a CO2-neutral
process, which means that electricity produced in
Sweden is considered to be mainly free from CO2
emissions.
ExternE (2003) is a research project of the European
Commission with the first comprehensive attempts to
use a consistent ‘‘bottom-up’’ methodology to evaluate
the external costs associated with a range of different
fuel cycles. The aim of the project is to identify and
quantify the environmental effects and the external costs
connected with conversion of energy from different
energy sources. The environmental effects are effects on
flours, fauna, climate and human health, while the
environmental load is due to combustion emissions of
NOx, SO2, VOC, particulates, CO2 and CO. A standar-
dized method has been developed, to estimate external
costs for several fuel cycles throughout Europe where
the whole fuel cycle has been analysed. For example, the
assessment of the coal fuel cycle includes evaluation of
the impacts associated with:
* plant construction;
* coal mining;
* limestone quarrying (for flue-gas desulphurization,
where used);
* transportation of coal, waste and other materials;
* power generation;
* waste disposal;
* electricity transmission.
The result from ExternE indicate that there are
substantial external cost, especially when damage caused
by global warming is included. The fuel cycles for coal-
based power production have been estimated to have
external cost amounting to around 50 Euro per MW h
electricity.
Within the project a number of national implementa-
tions of the methodology were made. One part of this
was to make an aggregation on national level of the
external costs due to electricity production. The total
environmental damage obtained in the national imple-
mentations studies were translated into an average
external costs for the electricity generated in each
country which can be used for comparing the environ-
mental impact of the different national electricity
systems in Europe. The implementation showed that
Sweden has relatively low external costs per kW h
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459 1449

compared to countries where coal are used more
extensively, as for example in the former East Germany
(Carlsson, 2002).
Since electricity generated in Sweden emits very low
emissions of carbon dioxide and consequently have low
external cost, Sweden can be interpreted as having an
environmental efficient production of electricity. But as
presented earlier, the use of electricity per capita in
Sweden is the fourth highest in the world. The Swedish
plant is also characterized by using electricity in a larger
extent than plant on the European continent does. If the
use of electricity in Sweden could adapt to a European
level it would freed capacity for Swedish suppliers and
as a result, better possibilities for a Swedish supplier to
sell electricity to customers on the European continent.
This electricity generated in Sweden but sold in another
European country, could replace electricity generated
with higher external costs and consequently lower the
total environmental cost in Europe. It would also help
the whole EU region to meet its target as regards lower
emissions of greenhouse gases since the electricity
generated in Sweden can replace marginal coal-based
power production. When expressing these external cost
into monetary terms and adding them to the cost for
producing electricity, it would result in minor total cost
for Swedish producers on comparison with other
European countries. Considering external cost will
therefore most likely give advantages to Swedish
electricity producers on a common European deregu-
lated electricity market where electricity is a trade
disposed with competition.
2. Case study
Oskarshamn is a municipality with some 26,000
inhabitants situated in the southeast of Sweden. The
local energy utility Oskarshamn Energi is owned equally
by the municipality and by Sydkraft, 2, which is the
second largest power company in Sweden. One of
Sweden’s four nuclear power plants, the OKG power
station, is situated in Oskarshamn.
This study comprises nine industries and one nuclear
power plant (OKG) located in the municipality (Trygg,
2002). In the power plant two sections, a workshop and
a restaurant, consisting of support processes are
included in the study. The objects were selected to
represent different lines of business and different
intensities of energy and electricity use. The plants
participating in the study are listed in Table 2 and the
products produced in the 11 plants are shortly described
in Table 3.
The total energy use for the plants is 176 GW h a year
and the use of electricity is 87 GW h a year. The 11
plants consume 2 GW h of district heating and 79 GW h

Table 2
Plants participating in the case study

Engineering plants Process plants Wood and paper plants Energy plant (Nuclear power)

Scania AB SAFT AB OP Kuvert AB OKG AB–CSV

ABB F(arbo Liljeholmens Stearinfabrik AB AB Bohmans Fan!erfabrik OKG AB–Restaurang
Elajo Mekanik AB
Samhall Brahe AB
ABB Figeholms Bruk AB

Table 3
Products produced in the 11 plants in the study

Plant Product

AB Bohmans Fan!er AB Bohmans Veneer plant manufactures sawn products and veneer out of tropical trees as maghony and
teak-wood. They also manufactures veneer out of birch and pinewood.
ABB Figeholm Bruk AB and ABB ABB Figeholm and F(arbo produces presspan and details in the same material for, i.e. use in transformers.
F(arbo AB
Elajo Mekanik AB The activity of the Elajo Mechanics plant embodies manufacturing, montage and service of products and
plants within the energy—and environmental area.
Liljeholmen Stearinfabrik AB The plant produces candles. About 3000 tonne of fluid stearine is yearly treated within the plant.
OKG AB Restaurang and CSV The OKG nuclear power plant in Oskarshamn has three reactors with a total capacity of 17 TW h per year.
In this study 2 sections with support processes of the power plant is included: OKG CSV that is a
workshop and OKG Restaurant.
OP Kuvert AB The OP Envelope plant produces envelopes in different shapes.
SAFT AB The SAFT plant in Oskashamn produces nickel-cadmium batteries for industrial use. The batteries of
SAFT are for example used in advanced space technology, railroad communications and in cellphones.
Samhall Brahe AB The production in the Samhall Brahe plant consists of chair in different demouldnings.
SCANIA AB SCANIA in Oskarshamn produces fronts for trucks.
 ARTICLE IN PRESS
1450 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459

70 000 The flow charts in Figs. 4 and 5 illustrate the energy

Use of electricity use in an engineering plant, which is one of the 11 plants
60 000
Use of energy
analysed in Oskarshamn. The flow charts in the figures
50 000 are examples of how the plants have been analysed in
40 000 the study. The figures show the present energy use of the
MWh

plants divided into unit parts such as support processes

30 000 and production processes before and after adjustments.
20 000

10 000
3. Results
0
3.1. Energy use divided into unit processes

y
KG en
ta e

Bo SV

P ns

lm
ik

Fi ert

t
af

et
h
an
an

ho
lm
ra

S
v

al
C
hm
ur

Ku
ek

lB

m
ho

ge
M

xi
l

lje
ha

es

ro
O

In the study, the energy use for each plant has been
o

Li

B
R
m

pp
aj

AB
Sa
El

KG

,a
divided into unit processes, which is a way of splitting
ia
O

an

industrial load management into smaller parts. The

Sc

Fig. 3. Use of electricity and energy in the participating plants. reason for dividing into unit processes is to get a well-
defined structure and thereby to facilitate a comparative
analysis of the energy use in the different plants. The
of oil annually. The use of electricity and energy varies unit processes are the smallest components a plant is
between 1 and 70 GW h a year (Fig. 3).1 built upon, and consist of production processes and
support processes. The production processes produce
products while the support processes support produc-
2.1. Methodology of study
tion.
Space heating and lighting are examples of support
Each plant’s energy use has been thoroughly analysed
processes while drying and shaping are examples of
.
by Linkoping University and by the Delegation for
production processes. Fig. 6 illustrates how the energy
Energy Supply in the South of Sweden. In addition to all
flow can be divided into unit processes.
the measurement work during daytime, the plants have
In the 11 plants in Oskarshamn, 11 production
also been visited at night with the purpose of studying
processes and 6 support processes were represented
the energy use when no production is going on. The
(Table 4).
results of the energy mapping have been presented in
extensive internal company reports and serve as the
3.2. The use of electricity for non-electricity specific
foundation for this study (Bruce et al., 2000; Bruce and
processes
Karlsson, 2000; Eckerberg et al., 2000; Englund et al.,
2000a, b; Gulliksson et al., 2000a-c; Nilsson et al.,
When calculating net emissions of carbon dioxide for
2000a, b; Nilsson and Karlsson, 2000).
different fuels and heat generation technologies in an
The method used for analysing the companies is based
energy system where the marginal source for electricity
on the Tool for Analysis (Karlsson, 2001), which
generation is coal condensing power, the production of
describes a strategy for system changes of industrial
1 kW h electricity gives emissions of 1 kg carbon dioxide
load management with the purpose of adapting the use
(see Section 1). With the same assumption heating with
of electricity to an average European level. The analysis
oil in hot water boilers leads to emissions according to
tool is focused upon finding system changes in the use of
the carbon content in the fuel and the efficiency of the
energy, not the traditional way of making existing
boilers. As shown in Fig. 7 the net emissions of carbon
energy utilization slightly more efficient.
dioxide for producing 1 kW h heat in an oil boiler is
For every industrial plant studied a flow chart has
about 0.3 kg. As it also can be concluded from Fig. 7
been constructed of the present energy use. After
that biomass does not contribute with a positive net
identifying the changes in energy use according to the
emissions of carbon dioxide because of the recirculation
Tool for Analysis for the specific plant, a new flow chart
of carbon in the biomass as it grows. Zero net emission
showing the new energy use was developed. The total
is also the result of using heat from coal-fired combined
reduction in energy and electricity use has been
heat and power plants (CHP). This is due to that the
calculated and divided into supports and productions
electricity produced in such plants can replace electricity
processes.
production in coal condensing power plants, which
1
The results presented for the plant Scania are specified as approximately level out the emissions (Werner, 2001).
approximately values according to restrictions from the management When coal condensing power is the marginal produc-
of the plant. All calculations though are based on accurate values. tion of electricity it is therefore a better choice using
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459 1451

ABB FÅRBO
Before adjustments
2
Area 2 500 m
Working hours 2 600 h /year
Total use of energy 2 090 MWh/year
2
Energy use/area 836 kWh/m
Use of electricity 1 480 MWh/year
Use of oil 610 MWh/year

Loss of fumes Electricity use when no 113 kW/year

43 production is taking 697 MWh/year
place 47 % of the total use of electricity
(MWh)

566 Space
Oil Boiler heating
610 567 Support
processes
1 Hot tap
water

Ventilation

Transmission

207 Space
heating

298 Lighting
903 Support
processes
308 Compressed
air

90 Ventilation
Electricity
1480

35 Drying

577 Production
processes 140 Heating

402 Shaping

Fig. 4. Flow chart over the energy use in an engineering plant before adjustments.

bio-fuelled district heating or even oil instead of using
electricity in processes that are not electricity specific, as
for example in processes as heating and melting, when
considering the net emissions of carbon dioxide.
In the 11 plants in Oskarshamn electricity was used in
several processes that where non-electricity specific,
processes that consequently could have been based on
fuel or bio-fuelled district heating instead. The processes
that could be converted from electricity to fuel are
presented in Table 5.
3.3. Electricity use with no production taking place
Visiting the plants in Oskarshamn at night, when
there was no production activity, ventilation systems
were found to be operating, electric motors running,
lights on, fans operating and so on.
The amount of electricity use when no production is
taking place varied between 11% and 48% of the total
electricity use for the plants in this study (Fig. 8).
3.4. Reduction in the use of electricity in separate support
processes
The highest reduction in electricity use in the plants in
Oskarshamn was found among the support processes.2
The total reduction of electricity use for these processes
is presented in the following sections.
2
See Section 3.6.
 ARTICLE IN PRESS
1452 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459

ABB FÅRBO
After adjustments
Adjustments:
Area 2 500 m2 Lighting 3 W/m2
Total use of energy 712 MWh/year Compressed air replaced with
Energy use/area 285 kWh/m2 electrically powered tools
Use of electricity 569 MWh/year Ventilation replaced with freecooling
Use of d.h / bio fuel 141 MWh/year No local heating
Reduction of electricity use when no
production is taking place

RESULT Load stearing:

Reduced use of energy 66 % Owns
Reduced use of electricity 62 % Cooling faans
Reduced use of oil 100 % Enginge preheater

Conversion:
Heating
(MWh)

Biofuel 1 Support 1 Hot tap

District- processes water
heating
141

140 Production 140 Heating

processes

Free cooling

Transmission

9 Engine
preheater

89 Lighting
134 Support
processes
23 Electrically
powered

Electricity 13 Cooling
571 fans

35 Drying

437 Production
processes
402 Shaping

Fig. 5. Flow chart over the energy use in an engineering plant after adjustments.

3.4.1. The use of compressed air Space heating

Compressed air fittings are often used in pneumatic Support
processes
tools where a compressor set drives the compressed air Fuel Lighting
or
plant. A well-known problem with compressed air Electricity
Production Shaping
plants is leakage. A leakage means that the compressor processes
has to work more than it ought to in order to maintain Drying

pressure in the compressed air line, which leads to a
higher electricity consumption than is necessary.
The efficiency for compressed air is as low as 5–10%,
but if the compressed air plant were to be converted to a
system with electrically powered tools, the coefficient of
utilization would rise to 90%. This has been done in a
.
study of Volvo’s facility in Olofstrom, (
Sweden (Aberg
et al., 2003). The study shows how a plant such as
Fig. 6. Example of energy flows divided into support and production
processes.
Volvo, where compressed air fittings are used exten-
sively, can manage without compressed air.
By systematically converting compressed air fittings to
electrically powered tools for the plants in the present
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459 1453

Table 4 50
Identified unit processes 40

Production processes Support processes 30

%
Shaping Lighting 20
Heating Ventilation 10
Drying/concentration Compressed air
Packaging Pumping 0
Segregation Space heating

V
n

t
lm
ik

ft
s

e
en

y
o

er
an

ah
ge

et
Sa
rb

CS
an

lm

uv
o

al
hm

Br
an
Få

h
Blending Hot tap water

ek

m
ho

K
ge
G
ur

Bo

ll
M
BB

xi
K

Fi

P
lje
sta

ha

ro

O
O
Felling

Li
A

BB
m
Re
aj

pp
Sa
El

,a
A
G
Joining

ia
K

an
O
Cooling

Sc
Melting
Fig. 8. Electricity use as a share of total use in the participating plants
Spreading
when no production is taking place.

Resistance heat
12000
Heat pump

MWh
Oil, boiler 8000
Natural gas, boiler

Bio fuelled,boiler 4000

Coal CHP, heat

0
Oil CHP, heat
Before adjustment After adjustment
Bio fuelled CHP, heat

Natural gas CHP, heat Fig. 9. Electricity use in the 11 plants when compressed air fittings are
converted to electrically powered tools.
-1200 -1000 -800 -600 -400 -200 0 200 400 600 800 1000 1200
kgCO2 per MWh produced heat

Fig. 7. Net emissions of carbon dioxide for different fuels and 12000
technical solutions when coal condensing is the marginal production of
electricity in the electricity market. Source: Werner (2001).
8000
MWh

Table 5
Convertible non-electricity specific processes 4000
Convertible processes from electricity to fuel

Hot tap water 0

Spreading Before adjustment After adjustment
Heating
Drying Fig. 10. Electricity use for lighting in the 11 plants before and after
Cooling adjustments.
Melting

3.4.3. Ventilation
study, the electricity use for this process could be The reason a plant is ventilated is often that the
reduced from 12.1 to 1.1 GW h annually, a reduction of indoor climate is perceived as to warm, which indicates
91% (Fig. 9). that ventilation is used as a cooling system.
If operating times were shortened, frequency control
3.4.2. Lighting and reversed blading3 added to the ventilation system,
Electricity use for lighting can be reduced by for the electricity used for ventilating in the 11 plants
example switching old armatures to newer types, by studied could be reduced from 8.4 to 2.8 GW h annually,
installing a control system for presence and section a reduction of 66% (Fig. 11).
steering and by reducing the number of armatures.
By doing these adjustments the use of electricity for
lighting in the 11 plants in Oskarshamn could be
reduced from 9.9 to 6.9 GW h annually, which is a 3
Reversed blading means blading facing backwards instead of the
reduction with 30% (Fig. 10). more usual forward-facing blading in ventilation systems.
 ARTICLE IN PRESS
1454 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459

12000 100
80
8000 60
MWh

%
40
4000
20
0
0

ng
er
g

n
r

ng
ai
in

io
Before adjustment After adjustment

at

hi

pi
at

at
d
w

gt

m
se
he

til
ap

Li

Pu
es

en
m
Fig. 11. Electricity use for ventilation in the 11 plants before and after

pr
t

V
oo

ot

om
H
R
adjustments.

C
Fig. 13. Electricity reduction as a share of electricity use before
12000 adjustments for the support processes.

12000
8000
10000
MWh

8000

MWh
4000 6000

4000

0 2000
Before adjustment After adjustment 0

Fig. 12. Electricity use for pumping in the 11 plants before and after
r

er
g

ng
ai

in

tin
io

at
adjustments.

pi
at
at
d

gh

w
m
se

he
til

p
Li

Pu
es

en

ta
m
pr

oo

ot
om

H
R
C

3.4.4. Pumping
In some of the plants in the study, the pumps’
capacities were found to be over-dimensioned. The total
capacity could therefore be decreased and still meet the
demands of production.
In combination with frequency control, the electricity
usage for process pumping could be reduced by 26%
from 5.6 to 4.1 GW h annually (Fig. 12).
3.4.5. Space heating and hot tap water
Industrial machines emit substantial quantities of
heat. Space heating in industrial plants is therefore often
unnecessary. Space heating in combination with the
emitted heat from the machines instead gives rise to a
greater need for space cooling. In the plants in
Oskarshamn, space heating has therefore been elimi-
nated. Some of the plants in the study produce hot tap
water with electricity; all production of hot tap water
could be converted to fuel. The electricity usage in both
these processes could therefore by reduced by 100%.
3.4.6. The relation of electricity reduction among the
support processes
After the changes suggested in the study had been
implemented, the reduction in electricity use for the six
different support processes varied between 100% and
26%. Fig. 13 shows the reductions as a share of
electricity use before making adjustments to the support
processes.
Fig. 14. Electricity reduction in MW h for the support processes.
The total electricity use for each process must be
taken into consideration when assessing which process
has the highest electricity reduction in MW h. The study
showed that the greatest reduction in electricity use was
achieved for compressed air, followed by space heating,
ventilation and heating. The production of hot tap water
is a process with relatively low electricity use. This
process is therefore the one with the lowest reduction,
despite the 100% conversion from electricity to fuel.
This relation is illustrated in Fig. 14.
3.5. Electricity reduction in separate production processes
The total electricity reduction in the production
processes in the 11 participating plants was found to
be 35%.4
Since it would be to extensive to describe in detail
every suggested change in every production process for
the participating plants, some examples of adjustments
according to the methodology are shown in Table 6.
3.5.1. The reduction relation between the production
processes
After making the suggested changes to the production
processes, the reduction in electricity use varied from
4
See Section 3.6.
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459 1455

Table 6
Examples of changes in the production processes

Productions Examples of suggested changes

process

Heating Conversion from electricity to district heating, or in some cases to waste heat, in the production processes heating, such as for
example heating at nickel-plating, cooking processes, thaw of valves, heating in ovens.
Introduction of frequency control in the heating processes.

Drying Conversion of the total process of drying in some of the plants to district heating.
Reduced operating time for exhausting equipment.

Forming Introduction of frequency control for electric motors.

Segregation Reduced operating time for chippings machines.

Melting Conversion of electricity driven melting ovens to district heating.

Cooling Conversion from compressor driven refrigerating machines to absorption refrigerators.

100
5000
80
4000
60
%

MWh

40 3000

20 2000
0
1000
ng
eg g
H g

g
Co g

Bl n g
Pa ing

Sp tion

Sh g
g

Se agin
in

in
tin

in

in
in

lli
ti
ry

ap
d

ad

in
ol
el

ea

a
en

Fe

Jo
D

ck

re
M

gr

0
Sp ing

ng
g

Sh g

g
Co g

Bl ng

n
M g

Pa ing

gr ing
Fig. 15. Electricity reduction as a share of electricity use before
tin

tin

in
in

io
in

lli
i
ry

in
ap

ag

at
ad

ol

d
ea

el

en

Fe
eg
adjustments for the production processes.

Jo
D

ck
re
H

Se
Fig. 16. Electricity reduction in MW h for the production processes.

100% for melting and cooling, down to 1% for felling

and joining. The electricity reduction relation between
the different processes is illustrated in Fig. 15.
Considering the total amount of electricity used in
each of the processes, the electricity reduction was found Support
to be highest for process heating followed by drying and Prod. processes
spreading. Fig. 16 illustrates the reduction of electricity processes 48%
in MW h. 52%

3.6. The relation between support processes and

production processes
The support processes in the 11 plants use 43 GW h of
electricity a year today. When all the adjustments
according to the methodology for the study have been
made, the electricity use for the support processes is only
about 15 GW h. The distribution between support
processes and production processes before and after
adjustments is illustrated in Figs. 17 and 18.
From Figs. 17 and 18 it can be concluded that the
reduction in electricity use is higher for the support
processes than the production processes: 64% for the
Fig. 17. Distribution of electricity use between support processes and
production processes before adjustments.
support processes and 34% for the production processes
(Fig. 19).
3.7. Total electricity and energy reduction for the
participating plants
The 11 plants in the study have a total annual
electricity use of almost 89 GW h and a total energy use
 ARTICLE IN PRESS
1456 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459

Support Table 7
processes Electricity and energy reduction in each plant
33%
Plant Electricity Energy
reduction reduction
(%) (%)

OKG Restaurang Power plant 90 40

OKG CSV Power plant 88 84
Prod. Samhall Brahe Engineering 86 59
processes plant
67% Bohmans Wood and 75 23
paper plant
Fig. 18. Distribution of electricity use between support processes and
Elajo Mekanik Engineering 65 81
production processes after adjustments.
plant
ABB F(arbo Engineering 62 66
plant
Liljeholmen Process plant 51 38
80
SAFT Process plant 50 47
ABB Figeholm Engineering 47 30
60 plant
OP Kuvert Wood and 40 43
paper plant
%

40
20
0
Support processes Production processes
Fig. 19. Electricity reduction as a share of electricity use before
adjustments to support processes and to production processes.
of 176 GW h. The results of this study show that when
all the presented changes in energy use have been
implemented in the support and production processes,
the plants will be able to reduce their annual electricity
use by more than 42 GW h, equivalent to 48% of the
original level. They will also be able to reduce their
energy use by 70 GW h, or 40% of their original use. The
median value for the reduction in electricity use is 62%,
for energy use 43%.
In an international perspective, where electricity is
represented by oil equivalents, the plants in Oskarshamn
have a total energy use of 353 GW h and a reduction in
their energy use of 155 GW h, or 44% of the original
level.
The result of the study also showed that the plants
studied in Oskarshamn can convert 10 GW h of elec-
tricity to district heating or other fuel and reduce their
use of oil by 79 GW h a year. The use of district heating
can increase from 2 to 59 GW h a year.
Table 7 shows the reduction in electricity and energy
use for each of the participating plants.
3.8. Total reduction of CO2 emissions
The suggested changes in industrial energy use mean
considerable advantages for the environment. On the
assumption that the marginal production of electricity is
Scania, Engineering 40 40
approximately plant
Average 48 40
Median 62 43
coal condensing power the plants in Oskarshamn can
reduce their annual global emission of CO2 by
69,000 tonne, equivalent to 60% of their total global
emissions.5 The CO2 reductions for each of the 11 plants
are shown in Table 8.
3.9. Economical benefits of the altered energy use
The investments for the changes suggested in the
study various. To reduce the electricity use when no
production is taking place, which for the 11 plants
means an individual reduction varying between 47%
and 11% of their total electricity use, is for example a
measure without any costs at all. Converting from
compressed air to electrical driven tool is on the other
hand a measure that involves a quite a large investment.
For a plant to connect to district heating is an
investment that depends on negotiations with the local
supplier of district heating.
In this study the economical savings due to reduced
use of energy has therefore instead been calculated for
the 11 plants. According to the methodology the altered
energy use for the plants means reduction in electricity
use, reduction in oil use and conversion from electricity
to other fuel. The economical savings for the altered
energy use is therefore depending on the price of
electricity, district heating and the price of oil.
5
District heating is assumed to be produced with biofuel with no
discharge of CO2.
 ARTICLE IN PRESS
L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459 1457

Table 8 3000000
Global CO2 reductions in each plant 2500000
Plant Global % 2000000

Euro
CO2 1500000
reduction 1000000
(tonne)
500000
OKG Restaurang Power plant 988 90 0
OKG CSV Power plant 2986 88

o
e V

t
Bo holm

ho ns
El KG n

ik
y
ge ft

g
ta e
Sa BB ver
b
et

O lme

an
es ah
o CS
O kan

O m h Får
Li hma
S
Samhall Brahe Engineering 847 86

al

A Ku

ur
R Br
m

M
xi

ll
plant

P
Fi

lje

KG a
ro

aj
p
Bohmans Wood plant 4443 83

AB
ap
a,
Elajo Mekanik Engineering 1062 74 43 Euro/MWh

i
an
plant 100 Euro/MWh

Sc
Liljeholmen Process plant 3579 70
ABB F(arbo Engineering 1113 66 Fig. 20. Economical savings in the 11 plants due to reduced electricity
plant use, calculated with two different electricity prices.
ABB Figeholm Engineering 11,805 66
plant
SAFT Process plant 14,197 62
Scania, Engineering 26,000 52 64–85% with profitable investments. The study also
approximately plant showed that when accounting each MW h of electricity
OP Kuvert Wood plant 1608 40
with 1000 kg carbon dioxide, which corresponds to
Total 68,628 emissions from coal condensing, the discharge of carbon
Average 60 dioxide could be reduced by 5000 tonne a year.
Median 70 By reducing their own use of electricity, the nuclear
power plant can free capacity and as a result better
possibilities to sell electricity to the continental Europe.

With a electricity price of 43 Euro/MW h,6 a price for

district heating of 40 Euro/MW h,7 a price of oil of
78 Euro/MW h8 and no fee for connection to the district
heating grind the total savings for the 11 plants will
together be about 4370 thousand Euro9 per year. With
continental electricity price of 100 Euro/MW h10 the
total savings for the 11 plants would be about 6822
thousand Euro.
The individual savings for the different plants with
these presumptions are presented in Fig. 20.
4. Related work
In this study two sections with support processes at
OKG’s nuclear power plant in Oskarshamn are in-
cluded. Thollander and Tyrberg (2003) analysed in a
master’s thesis the possibilities of lowering the electricity
use in four sections with support processes at the power
plant. The result of the study showed that the electricity
use in all the analysed sections could be lowered with
6
Electricity price for a small plant in Sweden, 1 of January 2000,
taxes included. Source SEA 2001.
7
Adjusted weighted price for district heating in Sweden based on
municipal companies 1999. Source: Andersson and Wermer (2001).
8 meet its commitments under the European Kyoto
Oil price with taxes December 2003. Source: Energy (2003).
9
1 Euro equals 9.08 SEK in December 2003.
10
Electricity price for a small plant in Germany, Hamburg, 1 of
January 2000, taxes included. Source: SEA (2001).
5. Concluding discussion
A deregulated and integrated electricity market will in
all probability lead an evening-out of electricity prices
among the European countries and Swedish plant will
therefore consequently meet higher European prices. In
order to retain their competitiveness, Swedish plants
cannot use electricity in a different way than plants in
continental Europe do. Swedish plant will have to focus
on reducing the use of electricity and changing the
proportion between the use of electricity and the use of
fuel.
In this study, 11 plants in the Swedish town of
Oskarshamn have been analysed. The aim has been to
study how the plants can change their use of electricity
to a European level. The study shows that they can
reduce their electricity use by almost 50%, if they
applied measures as reducing electricity use when no
production is taking place, using electricity more
efficiently and converting from electricity to fuel in
processes that are not electricity-specific. With the
assumption that coal condensing is the marginal power
in a European power system these measurements also
mean a major reduction in global carbon dioxide
discharge and will therefore consequently help Sweden
Protocol. If the freed electricity in Sweden were to
replace coal based electricity in another EU country, it
would also help the whole EU region to lower its
 ARTICLE IN PRESS
1458 L. Trygg, B.G. Karlsson / Energy Policy 33 (2005) 1445–1459
emissions of greenhouse gases since the production of
electricity in Sweden is mainly free from carbon dioxide
emissions.
Swedish industry approximately uses 57 TW h of
electricity per year (SEA, 2001). If all the Swedish
plants could reduce their electricity use to the same
extent as the 11 plants in Oskarshamn, the total
reduction would be over 27 TW h per year. To
methodically change the use of electricity would there-
fore be a competitive alternative to new electricity
production. It would also be an economical way to
increase the competitiveness of Swedish plant in relation
to other European plants, and to reduce the number of
Swedish companies relocating abroad.
When monetary values of external cost due to
environmental damage are taken into consideration,
environmental issues will without doubt be given an
even greater focus and perspective, and, from the point
of view of climate, make electricity use a key issue.
Acknowledgements
The study was conducted under the auspices of the
Energy Systems Programme, which is financed by the
Swedish Foundation for Strategic Research, the Swedish
Energy Agency, and Swedish plant. The authors wish to
thank Dag Henning and Mats Bladh for valuable
comments, and Peter Karlsson, Alemayehu Gebremed-
.
hin, Goran Nilsson for their thorough measurements
and helpful discussions.
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