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Sweden

Sweden

Danes claim unfair competition

A complaint from Danish wind turbine manufacturer NEG Micon that Swedish developer Eurowind has contravened European competition law has resulted in a court ordered injunction against development of an offshore wind plant. Eurowind had selected German wind turbine manufacturer Enercon as project supplier for a 72 MW offshore project in Öresund, the strait between Denmark and Sweden. The order was for 48 Enercon 1.5 MW turbines.

NEG Micon complained that Eurowind is the Swedish agent for Enercon and cannot, therefore, also act as the independent project advisor. Furthermore, Eurowind and Enercon both own shares in Örestads Vindkraftpark AB, the company that has been established to finance and own the project. In October NEG Micon delivered its complaint to competition authorities in Denmark, who took the case to the European Commission (EC) and a Swedish state court. The court ordered an immediate injunction on the order until it made a verdict, expected late last month.

The sticky issue centres around the EU law of public procurement, which guarantees fair competition on public projects and also applies to the private sector in certain cases. A power plant project built and run by a private company may be regarded as a public project, since the grid where the power will be distributed is in the public domain. In Sweden and other countries where the market has been deregulated, however, this law no longer seems to serve a purpose -- something the authorities themselves, including those at the Swedish board for public procurement (NOU), have apparently not yet worked out.

Enercon and Micon

"We contacted the NOU well in advance to find out if we had to make a public procurement, but we didn't get a definite answer," explains Pamela Ljungberg from Eurowind. "We put an ad in an official journal early June to be on the safe side -- and we got tenders from Enercon and NEG Micon."

Meanwhile, the EC contacted the Swedish ministry of finance, questioning Eurowind's procurement process on several points. In its reply in late October, the ministry argued that it is unclear whether the EU competition law applies in this case. NOU is expected to further clarify Sweden's position before the EC considers the case. NOU is certain of one thing -- if a manufacturer wants to develop a wind farm with its own turbines, it does not need to issue an official tender, explains Richard Falkendal from NOU. In other words, if Örestads Vindkraftpark had been fully owned by Enercon, the whole question of competition would not have arisen.

Meantime, work on the project continues according to plan, Ljungberg says, and Eurowind is unfazed by the legal incident.

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