Sweden unveils plans to reduce offshore wind connection costs

The Swedish government intends to carry out proposals for making offshore wind more cost-effective later this year, even though it is not clear yet who will pay for necessary grid expansion

Sweden has nearly 200MW of operational offshore wind capacity, including Vattenfall's 110MW Lillgrund wind farm

The Swedish government aims to reduce connection costs for offshore wind by making the country’s transmission system operator responsible for expanding the electrical network within domestic maritime territory.

This should lower all-in costs for offshore wind farms and create more equal conditions between onshore and offshore wind power, according to Swedish industry group Svensk Vinendenergi.

It is not clear precisely how this grid expansion will be funded.

Energy minister Anders Ygeman added that more offshore wind capacity will help to balance Sweden’s power system.

The Swedish Energy Agency had considered two methods of making offshore wind more cost-effective – the second, rejected idea was subsidising a portion of the connection costs.

Svensk Vindenergi stated: “Sweden needs more renewable electricity production, located close to consumption centres, to cope with the coming electrification and, at the same time, establish a new electricity-intensive industry. The offshore wind farms that developers want to build in Sweden plan to establish themselves around the central and southern half of the country, where the need for electricity is greatest.

“Reduced connection costs for offshore wind power can lead to increased security of supply and create new conditions for green growth. The additional production has the potential to contribute in the regions that are currently affected by fluctuating electricity prices due to a lack of capacity.”

The Swedish infrastructure ministry intends to begin expansion of the grid from 1 August 2021. It has started a consultation on plans, which runs until 3 May.

Sweden currently has around 200MW of operational offshore wind capacity and a further 8.5GW in various stages of development, according to Windpower Intelligence, the research and data division of  Windpower Monthly.

The country'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.

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