Opinions on the benefits or otherwise of the new system are markedly mixed, but it is generally agreed that should certificate prices reach the right value, it could provide the wind market with a vital fillip. The government intends to increase the obligation until the proportion of green power reaches 16.9% of consumption in 2010.
In many ways the beginning of 2003 is a repeat of the status quo this time last year. The wind lobby remains hampered by bureaucratic foot dragging and a public apparently satisfied with the current prevalence of nuclear power. According to preliminary figures, installed wind capacity increased last year by just 33 MW bringing the national total to 328 MW. The industry is now pinning its hopes on the new renewable energy obligation, though there are conflicting signals about the possible prices that certificates will fetch between a range fixed at SEK 0.06/kWh and SKK 0.20/kWh (EUR 0.006-0.022/kWh).
The most optimistic estimates at the moment are for around SEK 0.14/kWh (EUR 0.015/kWh), a level confirmed by a recent offer received by a generator for SEK 0.16/kWh. At that level, wind developers seem optimistic that it provides enough of a top-up to the power sales price to make projects viable. If certificate prices fail to reach that level, Gunnar Lundström at the Swedish Energy Agency says it will be a "very uncertain year" and make attracting risk capital difficult. "At the moment the price is SEK 0.09 a kilowatt hour. We would not be surprised to see a similar kind of value, although hopefully it could go a bit higher," he says. Adding to the uncertainty is a winter of soaring electricity prices in Sweden, which while making wind look an attractive option now also paves the way for a sudden drop come summer.
Nonetheless, Magnus Rosenbäck of Eurowind, which has two offshore wind projects in planning, is upbeat about the year ahead. "I think it will be very interesting to see what happens this year, especially with the green certificates and the prices people will be interested in buying them at. There have been many people opposing the system in Sweden, but with the government allowing international certificates in a similar way to the British system, it could be very favourable."
Meantime, Sweden's old wind power subsidy system to date is being phased out, with the last subsidies being paid over the next seven years. According to the Swedish energy agency, there is still SEK100 million in the subsidy coffers, with some 35 applications up for consideration this year. But with the majority of projects falling at the siting permit hurdle -- and projects over 10 MW subject to a government hearing -- the road from subsidy application to completed wind installation is long and winding. Ironically, as well as a prevalence of not-in-my-backyard sentiments, the country's environmental lobby is also a potential hurdle. It remains to be seen if the government's renewables obligation can achieve the 300-400 MW of new wind power a year it says it wants to see installed.