Swedish connection cost reduction examined

SWEDEN: The Swedish Energy Agency has examined two models for removing or reducing transmission costs for offshore wind power to help promote cost-effective energy.

Vattenfall's 110MW Lillgrund site (above) is Sweden's largest offshore wind farm
Vattenfall's 110MW Lillgrund site (above) is Sweden's largest offshore wind farm

Removing connection costs could make Swedish offshore wind more competitive in Europe, the Energy Agency stated.

However, it could also disadvantage producers of other types of power and create additional risk for stakeholders in the electricity certificate system, the agency noted.

The first model the Energy Agency examined entails moving the grid connection point to the project, while the second involves introducing subsidies to cover "a portion of the connection costs".

Offshore grid connection

Moving the grid connection point to the offshore wind farm would mean that Svenska kraftnät (The Swedish National Power Grid) would be responsible for the planning, construction and operation of the undersea connection cable.

It would also meet all of the costs involved in connection. Funding could be provided through an increased grid tariff, the Energy Agency suggested.

However, the agency argued this would unfairly disadvantage operators of other electricity production facilities — including onshore wind farms — as they would continue to pay connection costs.

There would also be no incentive for wind power producers to select sites with cost-efficient connections if they were not obliged to pay for access to the grid.

Connection subsidies

A second model involved subsidies to cover "a portion of the connection costs".

The Energy Agency suggested that financial support should be "limited to covering the undersea cable and associated transformers".

This would create parity between onshore and offshore wind farm owners, it added.

It would also retain the incentive for developers to ensure project locations enable cost-effective connections.

The subsidy could be financed through a surcharge paid by all electricity consumers, the agency suggested.

Swedish targets

Sweden’s main political parties had agreed to end grid-connection fees for offshore projects in June 2016, and also vowed to increase interconnection with other markets and to improve transmission within its own borders.

The country made the pledges as part of its aim to be completely reliant on renewable power by 2040.

Sweden had 6,691MW of installed capacity at the end of 2017, of which 202MW was offshore, according to statistics from the Global Wind Energy Council (GWEC).

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