Sweden

Sweden

Rising demand and price for C02 credits seen as positive for wind

Demand for carbon emission credits under the EU's Emissions Trading Scheme (EU ETS) is soaring in Sweden and so is the price being paid for them. While buyers seeking to reduce or offset their emissions to meet government imposed caps were expecting credit prices to be around EUR 10 per tonne of C02, they are averaging EUR 20 and have been as high as EUR 30. As a result, electricity prices have risen steeply in recent months. Wind power producers could be among the benefactors, says Nils Andersson of Swedish utility Vattenfall. "The emissions trading system has a large impact on the demand for wind and other renewable sources," he says. "With prices so high, expenditure on all fossil fuels will drop, so logically the shortfall can be taken up by other energy sources. If those other energy forms take up the extra capacity created, then they will become more attractive, hence investment should follow." Matthias Rapp of the Swedish Investors and Developers Association (VIP) agrees. "Indirectly, wind power becomes more cost effective hence more competitive if fossil fuels get more expensive, so there should be a knock on effect," he says. The Swedish government appears unperturbed by the rising cost of electricity. "In the long run it will be cheaper to concentrate on renewable energy sources," says sustainability minister Mona Sahlin. "We need to find a balance before we can say what is the right price for electricity, but first and foremost we must move towards renewable energy."

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