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Sweden

Sweden

Still struggling in Sweden -- Growth stuck at 50 MW a year

Sixty-five new turbines added 46 MW to Sweden's capacity, bringing the wind power total to 220 MW made up of 486 turbines. What the Swedish wind association calls a low wind tariff, SEK 0.40-50/kWh (EUR 0.047-0.059/kWh), is blamed for the slow progress, which even with a SEK 0.04/kWh capital subsidy addition makes the economic margins tight.

The pace of development is further slowed by administrative barriers. The SEK 300 million subsidy budget is dispensed at a rate of just SEK 60 million a year -- and all the money for 2000 is already spoken for. Projects at the end of the line will not get their money until next year so investors wait until the very end of the current year to put up their turbines. In effect, the capital subsidy works as a brake on development instead of a stimulus.

Even worse, the obligation on local utilities to buy renewables was removed in the fall and utilities were asked to tender for green power. The rates they offered varied from SEK 0.135/kWh to SEK 0.19/kWh. To prevent serious economic difficulty for farmers, companies and co-operatives who had invested in wind turbines, the parliament granted SEK 250 million to fill the gap between the market price and a viable tariff. But this grant is awaiting EU approval. The government will grant a SEK 0.09/kWh subsidy, when the EU approval comes through.

Meantime the government is looking into a system of green credit trading to provide future support -- and nobody anywhere knows what the tariff might be next year. The uncertainty has not only put off investors, but is also slowing the granting of site permits and investment subsidies.

In the midst of the chaos, there have been some positive political signals. The wind power commissioner's report recommended a 10 TWh planning target for Sweden (about 4000-5000 MW of wind plant) and prime minister Göran Persson declared that the nuclear reactors in Barsebäck should be replaced by wind within ten years: 8 TWh by 2010. The first year of the new century, however, will be another lost year for Swedish wind power without a decent market and with too many administrative barriers to be torn down.

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