Powering up Värmland with water
Explore the significance of small-scale hydropower and local energy production in a complex institutional landscape.
Small hydropower plants are vital in Sweden's energy landscape, particularly in regions such as Värmland. With Sweden needing to meet new EU environmental rules, these small plants face big changes. Discover how Henrik Nisser's farm in Alstrum uses one of these small plants to power not just his own farm but also to give electricity to houses nearby, showing a real-life example of local energy solutions at work.
Small-scale hydropower plants with a long history
Hydropower is Sweden's largest renewable energy source, accounting for approximately 45 per cent of Swedish electricity production (2023). Water has been utilized for a long time to harness power for societal development. A significant portion of hydropower capacity comes from hydropower plants and dams. Hydropower is a fossil-free energy source that utilizes the water cycle. Water movement is converted into kinetic energy, and in a hydropower plant, this kinetic energy is then converted into electrical power. Hydroelectric producers can quickly, in real-time, adjust their electricity production according to their or society's needs due to its controllability.
Värmland County is an area where hydropower has a particular prevalence and significance due to its rivers and lakes. Especially small-scale hydropower plants, which have often existed for a hundred years, originated from older water-related activities. These small hydropower plants are usually part of the natural and cultural landscape that has existed since before the industrial era. Today, small-scale hydropower plants are often owned by rural enterprises, with owners residing near the facility.
The largest renewable energy source challenged by new environmental requirements
At present, the Swedish hydropower faces an unclear legal and policy landscape. In accordance with the EU Water Framework Directive, Sweden needs to update the environmental requirements for hydropower. Therefore, all hydropower permits with conditions older than 40 years are now being reassessed. Approximately 2,000 power plants in Sweden (both small and large) are subject to receiving new environmental conditions. Out of these hydropower plants, approximately 2000, around 150 are estimated to be located in Värmland. The national revision plan of hydropower licenses is planned to be carried out over an extended period. It is led by public national authorities in Sweden and done in collaboration with the hydropower producers. This collaboration process shall also make it possible to partly finance the necessary investigations and measures through an environmental fund. The exact environmental measures that hydropower plant owners must take are unclear, and there are few precedents. Since January 2023, there has been a pause in environmental assessments as the government first wants to assess the local and regional values of the hydropower plants to the energy system.
Business model as key in Värmland?
“Geographical energy cooperatives” is a business model developed by Coompanion Värmland to adapt the current hydropower plants to modern social and environmental standards. The model has not been extended to include other renewable energy sources. The goal is to reduce dependence on external energy suppliers and promote self-sufficiency within the community, thereby increasing energy security. Beyond supplying energy, the energy community can support local economic development, create job opportunities, and foster social cohesion.
Due to the legal situation regarding hydropower, the cooperative business model for the local takeover of dams and hydropower plants in Värmland has not been able to be implemented in practice yet. The cooperative business model, suggested by Coompanion Värmland, could and would contribute to adapting each of the individual small power plants to the new legislation, with a joint organisation as security.
A cooperative business model could be a solution in the future. The geographical energy community model was highlighted by some case participants as a possible future way of designing a more sustainable society through community building, especially for small parishes and rural areas where other services could also be connected to the geographical energy communities. Trust between people and connectedness would be important cornerstones - but possibly also outcomes. It requires commitment and will not be a solution without hard work: “…we have other things in society today that are based on the collective, such as road associations [...]. It won't be this self-playing piano that it is for an individual entrepreneur because there will be many wills governing it…”, said another local representative.
Further work with a cooperation business model for small-scale hydropower would contribute to easing the process of adapting the hydropower plants to the legal requirements, as it would be possible to share the workload between the individual operators.
Challenges and hinders to overcome
The study of hydropower in Värmland shows the need to adapt the current hydropower plants to modern social and environmental standards. The unclear legal requirements - which are to be adapted for each hydropower plant - and the uncertainties in the process around the adaptation of hydropower plants are, however, two major challenges to overcome. The interviewed private actors express a lack of interest among state and regional authorities in considering local and small-scale aspects. According to the authorities, there is a negative attitude and a lack of knowledge among local hydropower operators about the new legal requirements.
Other aspects that need to be solved and which a “geographical energy cooperative” could tackle are finding solutions for the financial adaptations of the hydropower plants, finding a successor in the local community, assessing permits for hydropower that in some instances are several hundreds of years, and addressing a lack of interest from grid owners.
Positive local ownership
Local hydropower in Värmland reflects possibilities for positive local ownership of energy. For instance, the hydropower plants can be utilised as a local electricity supply during regular peace times and during crises through so-called island operations. This means that each hydropower plant supports a robust energy supply as there are possibilities to disconnect from the grid.
Integrating the hydropower plant with agriculture and other business activities enables hydropower to support the resilience and diversification of agricultural enterprises significantly.
To clearly highlight social values in the assessment of hydropower plants, not just economic or environmental values, would make the processes more inclusive and potentially unlock the further investments needed. Such social values are, for instance, the importance of hydropower plants for the individuals' residential and upbringing environments combined with local tourist values. Some of the more historical hydropower plants have cultural heritage and industrial heritage values. It is also important to be aware of the property values in the surrounding areas of the hydropower plants and that hydropower contributes to emergency preparedness regarding local energy supply, flood protection and access to firefighting water.
Clear political directions supporting small-scale hydropower would likely encourage more investment and commitment.
Study visit to Alstrum: A small hydropower plant strengthening farm and community
Henrik Nisser is the fourth-generation farmer managing Alstrum farm outside Karlstad. The farm includes various activities such as agriculture, forestry, energy production from a hydropower plant, and room rentals with breakfast. During a case study visit, the focus was on the small-scale hydropower plant owned by the farm since the 1600s. The water plant, powered by the Alster River, is very old and has undergone a significant upgrade since 2012, with a capacity of approximately 500,000-600,000 kWh. This capacity is more than sufficient for the electricity consumption of Henrik's family and the other seven households around the farm. It also allows for selling surplus electricity at market prices. Henrik has also installed charging stations for electric cars on the farm. The investments in the hydropower plant include a meter that monitors water levels and automatically notifies Henrik when regulation is needed. Additionally, the farm has implemented several diversification efforts for a locally resilient and sustainable energy system. Apart from hydropower, a small heating plant has been connected, providing buildings with heat when needed. The fuel for the heating plant comes from waste wood and other materials unsuitable for forestry.
Henrik emphasizes that the hydropower plant provides freedom for the farm. It is a way to secure electricity production and the possibility to sell excess energy. Stable electricity prices contribute to predictability, not only for his household but also for the other households on the farm. When asked about the future, Henrik feels a significant uncertainty about the existence of hydropower, making further investments challenging. While previous challenges were mainly technical, recent years have shifted the focus to legal issues and complex processes for adapting to modern environmental conditions. This uncertainty creates worries and a lack of predictability for small-scale producers. Henrik's expertise in energy matters has been a crucial enabler for him as he has a background as an engineer within energy systems. However, the situation may be different for other operators, and dealing with legal aspects can be cumbersome (interview, Henrik, 2023).
