October 31, 2012
Sweden

Swedish offshore wind projects at risk; Network operator warns of electricity surplus

By Davrell Tien, Windpower Offshore, Wed Oct 31 2012 www.windpoweroffshore.com

Rapid growth in the number of proposed wind farms in Sweden threatens to produce a significant over-supply in electricity, warns the state-owned operator of Sweden’s electricity grid, Svenska Kraftnät.

Unless the Swedish government chooses to incentivise the construction of new offshore wind capacity, the majority of offshore projects that have been granted development concessions and that have successfully navigated some of the permitting process risk being abandoned.

Sweden currently boasts just 160MW of offshore wind capacity. Its largest energy company, Vattenfall, is a significant investor in UK and German offshore wind projects, but at home is focusing investment on nuclear.

Publishing an analysis of the challenges it faces through 2025, Svenska Kraftnät has emphasised the scale of new planned wind farms seeking grid connections. A recent surge in wind farm proposals has been stimulated by the introduction of a green certificate scheme across Norway and Sweden.

Applications for 20GW in new wind capacity have been received by Svenska Kraftnät thus far, with more expected. “This is twice the entire production of Sweden’s nuclear power industry and the equivalent of almost 75% of the country’s maximum power requirements,” states the report. Svenska Kraftnät estimates that if all the new wind capacity being planned were to come online, wind energy would alone deliver 140% of Sweden’s total electricity demand.

Clearly, pressure is mounting on Swedish regulators to clarify how they will decide which projects are granted green certificates, which can then be sold by wind project owners to energy supply companies.

Offshore at a disadvantage

Svenska Kraftnät’s report names several offshore projects – Storgrundet, Stora Middelgrund and Trolleboda and Södra Midsjöbankarna – but offers no indication of how likely they are to be connected to the national grid.

Offshore project developers are likely to be disappointed that Svenska Kraftnät offers no sign of recommending that the government create a regime similar to Denmark’s, where offshore wind farms granted development rights are guaranteed grid access.

The role of nuclear power is also a key factor in the future of Swedish offshore wind. After flirting with a policy to phase out nuclear power, the Swedish Parliament voted in 2010 to allow replacement of existing reactors with new ones. Vattenfall has applied to build one or two new reactors and may also be considering taking a stake in Finland’s long-delayed 1.8GW reactor at Fennovoima. But Swedish public confidence in nuclear power has been shaken since the Fukushima disaster in Japan.

A political decision to support new nuclear would further undermine the financial viability of offshore wind projects, since upgrading grid connections to nuclear power stations would be a simple task compared to building subsea cables and onshore infrastructure to link offshore wind projects.

Sweden’s offshore wind developers are expected to turn Svenska Kraftnät’s document inside out in search of leverage with which to encourage energy minister, Anna-Karin Hatt, to incentivise offshore wind. At present, the Swedish government risks appearing to have awarded a sizeable number of offshore wind concessions while maintaining an energy policy that makes it impossible for these to be built.

URL to article:  https://www.wind-watch.org/news/2012/10/31/swedish-offshore-wind-projects-at-risk-network-operator-warns-of-electricity-surplus/