Sweden’s energy market is largely privatised. The Nordic energy market is one of the first liberalised energy markets in Europe and it is traded in NASDAQ OMX Commodities Europe and Nord Pool Spot. In 2006, out of a total electricity production of 139 TWh, electricity from hydropower accounted for 61 TWh (44%), and nuclear power delivered 65 TWh (47%). At the same time, the use of biofuels, peat etc. produced 13 TWh (9%) of electricity, while wind power produced 1 TWh (1%). Sweden was a net importer of electricity by a margin of 6 TWh. Biomass is mainly used to produce heat for district heating and central heating and industry processes.

The 1973 oil crisis strengthened Sweden’s commitment to decrease dependence on imported fossil fuels. Since then, electricity has been generated mostly from hydropower and nuclear power. The use of nuclear power has been limited, however. Among other things, the accident of Three Mile Island Nuclear Generating Station (United States) prompted the parliament to ban new nuclear plants. In March 2005, an opinion poll showed that 83% supported maintaining or increasing nuclear power. Politicians have made announcements about oil phase-out in Sweden, decrease of nuclear power, and multibillion-dollar investments in renewable energy and energy efficiency. The country has for many years pursued a strategy of indirect taxation as an instrument of environmental policy, including energy taxes in general and carbon dioxide taxes in particular. Sweden was in 2014 a net exporter of electricity by a margin of 16 TWh; the production from wind power mills had increased to 11.5 TWh.