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Sweden

Sweden

Stringent scrutiny of price promise; Nutek tender

The first of 15 Danish Bonus turbines ordered in bulk by a Swedish wind development consortium is being installed by the Vattenfall utility at Näsudden on Gotland and will be operational before the end of the year. The machine will then undergo a period of stringent monitoring to ensure it meets its contract specifications before the consortium starts installation of the remaining 14 turbines in a series of projects.

The bulk order, won by Bonus in September (Windpower Monthly, October 1996), was initiated by Swedish energy agency Nutek, but as a commercial rather than government project. The key parameter of the request for proposals -- masterminded by consulting company Lars G Örtegren AB for the consortium -- was the cost of energy generation. Project proposers were asked to specify all costs and state a kWh price for power produced at a variety of sites.

Nutek's initial aim was to support Swedish wind technology by tailor making the request for proposals, but commercial considerations superseded national interests once the buyers consortium was formed. Some 30 wind companies were invited to take part in a pre-qualification process and 14 of these were subsequently asked to tender for the bulk contract. Of these, seven submitted bids.

Bonus won the order with a slightly modified version of its 600 kW model which includes innovations from the Bonus 1 MW prototype. According to the consortium, the low price and high technical availability promised by Bonus were the reasons for the company's success. Furthermore, the consortium says the detailed tendering process has shown that medium sized turbines in the 500-750 kW range, based on the Danish standard concept of three blades and stall regulation, remain more competitive today than more recently developed megawatt scale turbines. Henning Kruse of Bonus says this is because components, like generators, gearboxes and blades are relatively cheaper for medium size units.

According to Hans Ohlsson from Nutek the bulk order has cut the cost for wind generated electricity by 20% and proves that subsidy of wind plant installations in Sweden is no longer necessary. This claim is being seriously questioned by the Swedish wind power association, which points out that Nutek is using only a 5% interest rate and a 25 year write-off period, instead of the 15 years available to commercial wind plant operators at much higher interest rates. Despite its doubts about Nutek's claims, the association nonetheless welcomes the advent of Bonus onto the Swedish market, saying the added competition will help cut costs.

The buyers' consortium today is made up of three of Sweden's largest utilities, Vattenfall, Sydkraft and Göteborg Energi and two independent wind power companies, Slitevind AB and MIT Energi AB. MIT replaced Vindkompaniet in the group after concerns about a conflict of interests. Vindkompaniet was excluded because of its association with wind turbine manufacturer Wind World, but has since filed a complaint, saying it has no formal links with the Danish company.

The Swedish government, through Nutek, has stayed in the background through the tendering process, though it has financed the complicated procedure. Additionally, some SEK 30 million, diverted from funds available for wind power several years ago, is available to the consortium and will cover 35% of the total investment cost under the normal terms of Swedish wind subsidies.

However, some in the Swedish wind community are asking if a 35% subsidy to large and affluent utilities is a sensible use of public money -- especially since the recent liberalisation of the Swedish power market has brought formerly reluctant utilities firmly into the wind business. They are now falling over themselves to meet the demand for "green power" from consumers willing to pay them a premium price for it.

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