Market Status: Sweden - Record year but politicians need to act

SWEDEN: Wind development had a great year in Sweden in 2009. Some 450MW of new onshore capacity was added - a new record.

The rate has ramped up, in recent years. In 2006 there was a paltry addition of 64MW, Sweden added 126MW in 2007, nearly doubled the rate to add 236MW in 2008, then put 450MW plus 30MW offshore on the map in 2009. Total capacity now stands at nearly 1.5GW.

Matthias Rapp, CEO of Swedish Wind Energy, laughs when asked if 2010 could see yet another doubling of added capacity. "I would be surprised if we achieved that," he says. "We're not immune to the difficulties for mid-sized projects to find financing. I would actually be happy if we could reach the same figure, around 470MW installed, for 2010."

Sweden also increased electricity generated by wind from 2TWh in 2008 to approximately 3TWh in 2009. Sweden's renewable energy production goal, formally adopted by the government last year, is 25TWh a year by 2020. The Swedish Energy Agency (SEA) expects around half of that to come from wind. Trade association Swedish Wind Energy (SWE) predicts closer to 15TWh a year of energy will be wind-generated by that date.

While the future looks bright for wind development, there are a couple of dark clouds. The first concerns the green electricity certificates programme, which requires power consumers to purchase a gradually rising proportion of certificates to prove that a set quota of Sweden's electricity demand is being met from renewable sources. To date, this system has been effective at stimulating renewables construction. "You can say it is doing exactly what it was supposed to do for wind, (insofar as) the best wind projects are the ones actually getting built," Rapp says.

The problem is the current surplus of certificates and the very slowly rising quotas. Both SWE and the SEA proposed tougher quotas last year in order to turn that surplus into a deficit and make projects more profitable. Those proposals are now in a bill expected to be put before the Swedish parliament in February, although Rapp is unsure as to whether they are stringent enough.

Even more troubling is a new wrinkle in the construction permissions process. While the Swedish government has tried to keep clauses that could slow down wind construction out of the bill, last year a pro-nuclear coalition party, the Folkpartiet, inserted wording into new permit legislation that gives each Swedish municipality the power of veto on wind development projects. "That definitely threw a spanner into the works," Rapp says. Communities have begun to use their veto power as leverage to gain a portion of profits from future projects, he says. "While we are sensitive to the right of communities to have a say and also to receive some economic benefit, this is leading to the idea that wind power is simply harvesting gold," Rapp says. "In Sweden, projects are not all that profitable. This situation has the potential to become ugly."

Meantime, Sweden has projects of varying scales in the works. These include Swedish state utility Vattenfall's 80MW Stor Rotliden project, which is expected to be operational this year. Skelleftea Kraft is working on turbine selection for the 300MW Blaiken project. And the enormous 1,101-turbine Markbygden project is erecting 12 turbines to add 24MW of capacity. "Swedish wind development is doing fairly OK," says Rapp. "We are not suffering unduly. We do have problems, yet in the overall scope of things, they are small problems - that will be solved."

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