The scores of proposals for wind power projects pouring into municipal authority planning offices across Sweden could be taken as a sign that the national wind market is in full swing, but the somewhat subdued mood at Vind2007, the Swedish wind industry's annual conference, told a more nuanced story. Gaining building permits for wind farms in Sweden remains a big boulder in the path of project development -- and little is being done by either local or national government to roll it out of the way. As a result, the lengthy permitting process is pushing up costs to the extent that profit margins are tight, even though sales of the green energy credits associated with wind generation are currently fetching about SEK 0.20/kWh (EUR 0.02/kWh) on the open market.
An undertone of frustration ran through the conference, held in Stockholm at the end of September and organised by the Swedish Windpower Developers Association (SVIS). Previously, a main industry pre-occupation has been with the competition from combined heat and power generation -- which in the early years of green credit trade filled most of the national green energy requirement and left little room for sales of wind credits. But this year the main focus of the 400 delegates was on how to change the negative attitude of municipal councils to wind development in their regions.
A report by Vattenfall's Anders Dahl on Sweden's flagship wind project, the 110 MW offshore station going up in the strait between Sweden and Denmark, raised a cheer. Lillgrund, however, is a chill-inducing example of the size of the permit boulder. Before all the network connection and environmental and other approvals were home, the process of appeals and counter appeals meant that permitting took a full decade.
Efforts by the former Social Democratic government and current Moderate coalition leaders, in charge since 2006, to push the permitting boulder aside have had no effect. "It's a ludicrous situation," said SVIS' Matthias Rapp. "Every step forward in policy has also been accompanied by a step back -- the opposite of the one-stop shop [for project permitting]." The latest step in the wrong direction comes from the involvement of Sweden's national building authority. Municipal authorities have started demanding a "detailed usage plan" for wind projects, a requirement which until now has been used for city planning, even if the wind plant is proposed for mountain slopes and reindeer runs.
Assurances from Swedish government representatives at the conference that they were highly supportive of efforts to boost wind power development rang hollow in light of the obstacles to reaching national goals. By 2016 Sweden aims to produce 7-10 TWh of wind power annually as part of a 17 TWh goal for renewable energy. So far wind production is stuck at 1.2 TWh, or just under 1% of Sweden's 140 TWh total in 2006. Official forecasts are expecting that to increase to 3% in 2010, 4.7% in 2015, but to no more than 4.9% in 2020, or 8.6 TWh out of a projected 174.4 TWh of production. In contrast, neighbouring Denmark already gets 20% of its electricity from wind and is heading for 50%.
"We simply must have faster projects," said Ola Alterå, Secretary of State for industry. He admitted that Sweden's environmental authority is also "bogged down" in wind development applications and needs more qualified staff to speed up permit processing. So far, Sweden has 570 MW of installed wind power. To reach 7 TWh by 2016 it would need about 2820 MW, less than the 3000 MW long ago achieved by far smaller Denmark.
Trickier to fix than the staffing bottleneck at the environment agency is Sweden's legal framework for approving new building works. It allows individuals to contest a project at many stages in its permitting journey. The system needs amending, said Rapp. The Swedish wind lobby is putting the final touches to a proposal for a sweeping reform of the entire process. "We think we shouldn't even need permits," Rapp said. "Just set certain parameters, the same way we did when Sweden developed its hydro power sixty years ago, and follow them."
Invited speaker Magnus Jiborn, a Swedish philosopher, mused about how to get people to accept and even embrace wind power in their own backyards. The key, Jiborn said, is to either demonstrate that wind will in the long term lower electricity prices, or convince people of its importance to meeting national energy needs, in the way that nuclear energy is now seen as vital in Sweden.
Protracted permitting problems makes wind project economics marginal. Achim Berge, with the Swedish offshore division of international wind project developer WPD, said that when presenting project proposals within the company, the returns in Sweden "just can't stand up to projects in other places in the international market." Staffan Niklasson of Swedish developer Vindkompaniet agreed, citing Sweden's "small market" and the "oppressive costs" to get anything built.
Demonstrating how risky a wind investment can be, Niklasson said that a drop in wind strength of 0.5 metres a second at a selected Swedish wind plant will reduce profits by about 3.4%, while an increase of 0.5 m/s only results in a 2.2% increase in profit. Niklasson cautioned that slim margins in Sweden could be further eroded by unexpected extra costs, such as expensive labour bills for turbine maintenance.
The Swedish wind lobby is soon to launch a renewed attempt to strengthen the market for wind power credits significantly by opening the borders to pan-Scandinavian green credit trade. An earlier attempt to create a cross border market with Norway failed when Sweden's neighbour backed out of the plan. The new plan will include both Denmark and Finland as well as Norway.
To add to the pervasive mood of hope tempered by frustration at Vind2007, a wind research group reporting from a three-year project, funded in part by Vattenfall, has unearthed a total wind power potential for Sweden of 500 TWh annually. Between now and March the researchers will be trying to pinpoint exactly how much of that is economically and technically viable. In addition, a sister group called VindVal, funded by the energy department, has combed through the research on the environmental impact of wind turbines and begun to conclude that this is mostly "small," according to group director Kjell Grip. When sites are well planned, any environmental effect is generally manageable, he said.
News of an undoubtedly huge resource and no serious environmental barriers to putting it to good use should be received with open arms by the government. Sweden is likely to come under pressure when the EU announces its allocation plans for the contribution each member country is to play in meeting the overall target for 20% of Europe's energy to come from renewable sources by 2020. Rapp said the government might have to set a wind power planning goal of between 20-25 TWh by 2020, a huge increase on the current 10 TWh by 2015. Sweden's total energy production for 2020 is estimated to be approximately 150 TWh, according to the Energy Agency's Carl-Ivar Stahl.
"We in Sweden haven't got that much more district heating to build out, we can't touch the remaining rivers, and geothermal might contribute ten to twenty terawatt hours," Rapp said. "Realistically, the big burden is going to fall on wind power." Whether Sweden can fulfil these loftier wind goals is another question. "Of course there will be plenty of people who will say it can't be done," he said. "And of course, we think it can."