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Disappointment over short term policy, five years of subsidies announced

The just published energy bill in Sweden gives a 15% subsidy for wind power development over the next five years within a total budget of SEK 300 million. The wind community was disappointed that subsidies have been cut from their previous level of 35% and that a cap has been placed on total funding.

Fifteen per cent subsidy of wind power development over the next five years within a total budget of SEK 300 million. That is the framework for wind power development in Sweden outlined in the country's long awaited and just published energy bill. The news has been greeted with both relief and disappointment by the wind community. Relief that at least a small market now seems secure for the next five years, but disappointment that subsidies have been cut from their previous level of 35% and that a cap has been placed on total funding.

Project subsidies of 15% mean that only sites with above average wind speeds will be viable for development, say Sweden's wind experts. This will increase pressure on coastal areas, where conflict with other interests is likely to arise. In view of the low rates paid for wind power by the utilities, a 25% subsidy would have made more sense, says the Swedish wind power association. It predicts that Sweden's stop-go roller coaster approach to wind development will continue, with a wind rush towards the close of the five year period.

The five year budget of SEK 300 million is effectively less than the SEK 350 million doled out in wind subsidies between 1991 and 1996, which resulted in about 100 MW of wind capacity. But a clause allowing an increase in the budget if necessary was added to the bill at the last minute, preventing the need for tortuous parliamentary debate should the funds dry up before time.

As it stands the budget will allow for the development of enough wind capacity to provide 0.5 TWh a year by the end of the five year period -- an extremely modest level, says the wind association. It has argued for a model that would allow for 5 TWh from wind by 2005.

Since the energy bill's main purpose is to lay down a framework for replacing the nuclear capacity to be phased out (Windpower Monthly, April 1997), the half hearted support of wind power is unrealistic, say wind lobbyists. But the bill is the result of long drawn out negotiations with a majority of the parties in parliament and there is now little chance of it being further amended. Parliament is expected to approve the bill by mid June.

The new wind subsidies will be available from July 1 and a veritable wind rush is expected. A number of projects are already in the pipeline. Furthermore, with the recent arrival of major utilities Vattenfall and Sydkraft as wind developers, there is a real risk that these two alone could easily swallow the SEK 60 million a year the SEK 300 million represents. A 50 MW project would use up the entire budget for one year.

The energy bill has the character of a political programme; a strategy for a new energy system. It has two main targets, to reduce the consumption of electricity and to develop new sources of generation. The plan will cost some SEK 9 billion -- money which has yet to be found. New energy taxes will be one source of income.

Special funds are allocated for procurement of new energy technology, wind power presumably included. Money is also set aside for research development and demonstration of new energy projects, such as offshore wind power. A new central energy authority will also be established by January 1, 1998 to handle these programmes, while the state utility Vattenfall is expected to play a leading role. Already changes have been made in its management at the dictate of government.

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