Photo: Karl Gabor.
The original name of the program was “Economics of the Electricity Markets,” and its purpose was to build research expertise on the electricity market at IFN, as existing research environments at the Stockholm School of Economics and the University of Gothenburg were in decline. In its early years, the research focused particularly on how the design of the electricity market affected its efficiency, how market power could be estimated, and whether the Nordic electricity market could be considered competitive.
Later, the EU’s commitments to reduce greenhouse gas emissions led to an increased focus on the role of the electricity system in achieving climate policy goals. A major transition toward electricity production based on non-fossil energy sources was seen as the most realistic way to reduce emissions without sacrificing economic prosperity. To reflect this shift, the program changed its name in 2020 to “Sustainable Energy Transition.” Under its new name, the program continued building on earlier research but with a stronger emphasis on the interaction between the energy transition and the electricity market. Questions about the factors driving investments in the electricity market, goal conflicts in wind power expansion, and the integration of electricity markets became central themes in the research.
The Russian invasion of Ukraine and the subsequent energy crisis dramatically illustrated the vulnerability of the energy system. Calls were made to re-regulate the electricity market, and the EU initiated a comprehensive reform process. Growing electricity price differences between and within countries contributed to the politicization of the electricity market and to energy nationalism. In its final years, the program’s researchers were involved in policy work aimed at contributing to a socioeconomically efficient development of the electricity market that considered climate policy goals, as well as cost efficiency, reliability, and social sustainability.
In its early phase, the program was funded with support from the then-existing organization Elforsk. Later, the Swedish Energy Agency, the Handelsbanken Research Foundations, the Swedish Competition Authority, and the Söderberg Foundation became key financiers.
