Close to reaching the point of no return -- Sweden on brink of big leap forward

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Sweden's wind market has long been a case of unmet expectations with project developers finding the site permit barrier too high to scale, but 2008 shows signs of being the year in which a surge of market activity forces the government to rethink its wind energy policy. The discovery that Sweden's vast and relatively unpopulated forested areas are wide open for wind development has caused a rush of applications to install as many as 3600 wind turbines, representing upwards of 7000 MW in potential installed capacity.

The rush follows a record year in which Sweden saw 217 MW of wind power come online, bringing installed capacity in 2007 to 788 MW, according to the European Wind Energy Association, placing Sweden 12th in the European country rankings. Market growth might have slipped back to the previous 50 MW a year were it not for investor interest in developing forest land and the EU's recently announced renewable energy targets, says wind project leader Fredrik Dahlström at the Swedish Energy Agency (SEA). The EU directive proposes that Sweden, which already leads the EU in renewable energy use thanks to its extensive hydro resources, must raise its renewables share by 9.2% so that 49% of its energy comes from green sources by 2020.

The country's 788 MW of wind capacity produced 1.4 TWh of electricity in 2007, a long way behind the government's goal, set in 2003, of 10 TWh wind power by 2015. SEA says if Sweden takes no action to improve its wind market framework, the country will be producing no more than 8.6 TWh of wind power by 2020 -- not likely to be enough to meet EU requirements.

Calls for change

According to SEA, Swedish wind power could be producing at least 20 TWh a year on land by 2020 and 10 TWh offshore. Capacity enough to meet those goals is already in the application pipeline. "Our suggestions are: there needs to be some kind of subsidy for offshore," says Dahlström. "We need to look over and change the certificates system. We need legislation regarding permitting. We need legislation regarding costs for connecting to the network."

Changes are in the works, though not as fast as developers would like. Lars Andersson of the industry ministry's energy group says the one-stop permit process proposed by SEA is difficult to achieve within an 18 month time-frame, but environment minister Andreas Carlgren says he will consider a legal process for quickly pushing wind projects through the system. That kind of legislative change cannot happen before autumn, at the earliest.

Neither is an overhaul of Sweden's green certificates system likely to move fast, particularly with neighbouring Norway thinking of joining in and the need to make it compatible with the demands of the proposed EU renewables directive. Under the system, electricity retailers must acquire green certificates to demonstrate they are acquiring a specified percentage of their power sales each year from renewables. The aim is for a 25% hike in green energy consumption by 2016, which means a further 17 TWh on top of the 70.3 TWh produced in 2002. With Sweden consuming 145 TWh a year, that would result in a mix of hydro, wind and other renewables producing about 60% of Sweden's electricity by 2016.

According to Swedish Windpower, a lobby group, if Sweden is to meet its EU target, 25 TWh of wind power generation annually will be needed by 2020, compared with 5.56 TWh in 2006. To get to that level, says the group, the percentage requirement for green power must be raised by no later than 2010/11 to stimulate 500 MW of onshore development a year. Together with an expected 2500 MW of offshore development, that will allow Sweden to reach its 2020 target.

Another record year is forecast, with around 300 MW expected online in 2008. By 2009, a number of mega-projects will aim to break ground: SCA and Norway's Statkraft are working together on seven developments with a total of around 400 turbines; Vattenfall might be ready to go on some of the 550 turbines it plans for five southern Swedish municipalities; and Svevind will be itching to move ahead on the huge Markbygden project in northern Piteå, slated for anywhere between 400 and 1000 turbines.

Dahlström says that of the big projects, Markbygden gives him most hope that Sweden is at a turning point and ready to hit wind development big time. The project had been threatening to bog down in the usual quagmire of opposition: hunters were against it and the local municipality appeared ready to demand a detailed and time consuming building plan. But by the end of December the county's administrative board had given the go-ahead for a first installation of 12 turbines at the Piteå site.

"I think this shows the change that is happening is also happening at the lower municipal levels -- in fact the municipality is eager to have the test site put up quite fast," Dahlström says. Referring to the national market he adds: "The first 1000 MW were slow, but the next 1000 will happen more quickly."

Vattenfall's Anders Dahl concurs. While fine tuning the permitting process and solving other legal framework issues are important, perception is now playing an important role. "It's no longer just about the people and the laws and the resources," he says. "It's also about the critical mass. I think in Sweden we've started to exceed the required critical mass."

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