"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 (USA) prompted the Swedish parliament to hold a referendum on nuclear power. The referendum led to a decision that no further nuclear power plants should be built and that a nuclear power phase-out should be completed by 2010.

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.

In an effort to phase out the dependency on nuclear power and fossil fuels, the Swedish government has launched a multi-billion dollar program to promote 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. Also in 2005, Sweden garnered international attention by announcing its intention to break its dependence on foreign oil within 15 years, with the goal of becoming the world's first oil-free economy."