Wind Power in Sweden

An Expert's View about Energy Efficiency in Sweden

Posted on: 22 Sep 2010

The market in Sweden is expanding rapidly and there are significant opportunities for British companies to gain market shares in a number of areas.

Wind Power ? Sweden Sector Report Wind Power Sweden Produced by: Helena Lindquist, Senior Trade & Investment Adviser, UK Trade & Investment Sweden Last revised: February 2010 Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation and Skills and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published Feb 2010 by UK Trade & Investment. Crown Copyright © Wind power - Sweden Table of Contents OVERVIEW 3 OPPORTUNITIES 3 CHARACTERISTICS OF MARKET 5 KEY METHODS OF DOING BUSINESS 7 MORE DETAILED SECTOR REPORTS 7 PUBLICATIONS 8 EVENTS 8 CONTACT LISTS 8 Page 2 of 8 Wind power - Sweden OVERVIEW Swedish wind power has been growing rapidly and since the middle of the 1980s the number of plants has doubled every fourth year. At the end of 2009 there were about 1400 wind turbines yielding around 3 TWh of electricity. Wind generating capacity has grown at a rate of around 10% annually in recent years, but increased significantly during 2008-2009. 2008 represented an increase of almost 40% from the previous year. The market is expanding rapidly and there are significant opportunities for British companies to gain market shares in a number of areas. OPPORTUNITIES The table and graph below illustrate the rapid increase of wind power deployment in Sweden during the last few years. This development is expected to continue in the coming decade. The Swedish government has proposed a planning target of 30 TWh of wind power until 2020. Until now wind power has been built primarily on land or near the coasts. Plans are now being made to enable more offshore wind power and wind farms in the mountains. According to this target of 30 TWh, 20 TWh should be generated onshore while 10 TWh should be generated offshore. Depending on turbine size, this planning target would mean a need to build 4000-6000 new wind power plants by 2020. However, the potential for wind power in Sweden is in excess of the proposed planning target. Some analysts think that this projection is overly optimistic and say that a 20 TWh capacity is more realistic. Since 2004, several areas in Sweden have been designated by the Swedish Energy Agency as being of national interest for wind utilization. The results of extensive wind surveys and mapping carried out during 2008 show that there are much larger parts of Sweden that are suitable for wind power development than was previously known. Parts of southern Sweden and the inland area of the northern Norrland region have the best wind conditions. The 2008 national interest areas for wind power are situated onshore, on lakes and in coastal areas, as well as offshore in the Swedish economic zone. There are 423 areas covering around Page 3 of 8 Wind power - Sweden 10 000 square kilometers or 2,2 percent of the area of Sweden. The Swedish Energy Agency shows the national interest areas for wind power below: Figure 1 - National interest areas for wind power, North Sweden Figure 2 - National interest areas for wind power, South Sweden Page 4 of 8 Wind power - Sweden There are significant business opportunities in most aspects of wind power development, including: ? Project management ? Wind measurement ? Technical consultancy services ? Planning ? Environmental impact assessments ? Speciality areas like de-icing of blades, radar interference issues ? Access to sites in harsh and difficult conditions ? Insurance and finance ? Operation & Maintenance ? Other advisory services In the short term most opportunities for British companies will be in the onshore wind business. In the medium to long term there will be significant opportunities also in the offshore and small wind sectors. UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. By setting up a profile you can be alerted by email when relevant new opportunities are published. New or updated alert profiles can be set in My Account on the website. CHARACTERISTICS OF MARKET The Swedish wind power market is booming and new projects are announced almost on a daily basis. Industry analysts project that there is a need for 4000-6000 new wind turbines in the coming 10 years. Sweden has generally a very strong industrial base with many highly competitive companies. Since the expansion of wind power is a relatively new phenomenon however, the Swedish supply chain for the national wind industry is still very much evolving. Despite the fact that the number of industry players is still relatively limited Sweden has some very strong companies supplying the global wind industry, i.e. SKF (ball bearings, remote condition monitoring equipment), ABB (grid solutions, cables and transmission) and Roxtec (cable insulation solutions). The Swedish utility company Vattenfall is very active in the wind industry and have developed large scale projects both in Sweden and the UK. Swedish flagship projects include: Realised projects / under construction: ? Lillgrund: Until December 2009 it was the world?s third largest offshore wind farm. Developer: Vattenfall. Size: 48 turbines. Effect: 110,4 MW. Energy production: 0,33TWh. ? Lake Vänern: The world?s first offshore wind farm situated on a lake. Developer: Vindkraft Vänern Kraft AB / DynaWind. Size: 10 turbines. Effect: 30 MW. ? Vertical Wind: Prototype plant for 4 innovative vertical axis turbines with direct-driven generators at ground level. The Swedish Energy Agency, E.ON and Ericsson are Page 5 of 8 Wind power - Sweden financing the project which is being developed in the city of Falkenberg on the west coast of Sweden. Planned projects ? Markbygden: around 1100 turbines are projected in the north of Sweden (very cold and harsh climate) by the company Svevind. ? Kriegers Flak: Offshore wind farm planned in international waters between Sweden, Germany and Denmark by Vattenfall (in the Swedish zone). (Planned size: 128 turbines. Estimated effect: 640 MW. Estimated energy production: 2,6TWh) ? Finngrunden: Offshore wind park outside the region of Gävleborg, developed by WPD Scandinavia. (Planned size: 300 turbines. Estimated effect: 1500 MW. Estimated energy production: 5,5 TWh). Constraints There are a multitude of wind power projects being planned in Sweden, both onshore and offshore. There are however some issues that need to be resolved before some of the more large scale projects will be started. Under the current green certificate system offshore wind is rewarded with the same amount of green certificates as onshore wind despite the fact that it is much more costly to invest in and maintain offshore wind farms. With a relatively low price of electricity many developers deem that it is not profitable enough to invest in offshore wind. There is considerable pressure on the government to improve the conditions for offshore wind after the subsidies for demonstration plants were phased out in 2009. Another issue that affects cooperatively owned wind farms relates to taxation. During 2009 the Swedish taxi authority started to interpret a certain tax legislation in a way that effectively removes the incentives for investing in wind farm cooperatives. After massive protests the government has launched an inquiry to see how these cooperatives could become exempt from this tax. An important development with large implications for the market for small scale wind devices is the prospect of introducing ?net measurement?, a type of feed-in-tariff, in Sweden. Currently the electricity trading system for small scale producers is heavily biased towards the local grid owner who can charge the individual producer virtually any price for the grid connection and other related services. In effect, this means that the price the electricity producer (often the same as the individual consumer) gets for its input to the grid is only about half of what it has to pay for buying electricity from the grid when the wind device is not producing any electricity. Hence, currently it is not profitable for individuals to produce their own electricity through wind power (or any other renewable source for that matter). This is about to change however. In 2007 the government ordered an Inquiry into the regulations for importing electricity from small scale renewable sources into the grid. The recommendations from Inquiry state that the individual producers should not have to be at the mercy of the grid owner (in terms of fees for hourly metering, etc.). Instead, the Inquiry proposes a kind of feed-in-tariff whereby small power plants can be connected without requiring hourly metering, hence leading to significantly lower costs for small scale producers of renewable energy. At the end of 2009 the Government presented a legislative proposal that unfortunately did not follow the recommendations of the Inquiry. This proposal has been heavily criticised by the industry and other environmental lobby groups and many expect to see a revised proposal from the government. The current green certificate system is being criticised by the wind power industry for not giving investors enough incentive to build large scale wind farms, although the level of the green certificates have recently been raised, hence making it more profitable to produce renewable Page 6 of 8 Wind power - Sweden electricity. This is especially the case for offshore wind because of the large investment costs involved. Many companies have placed their offshore wind projects on hold until better incentives are in place. According to Vattenfall Power Consultants, it is more profitable to acquire British wind parks than to start a project in Sweden. The government and the Swedish Energy Agency has recognised the problem but it remains unclear whether any major changes will be made to the certificate system. Another problem is the costs associated with connecting wind farms to the grid. Currently, project developers have to cover these costs themselves. KEY METHODS OF DOING BUSINESS The Swedish wind market is relatively small and close-nit. Since the sector is experiencing rapid growth many new companies are formed and others are diversifying from other sectors (mainly automotive and advanced engineering). Swedish wind companies are generally interested in receiving information about products and services from other countries and we believe that many smaller companies are keen to establish partnerships with British companies with experience of the UK market. Other background information on doing business in Sweden can be found on UKTI?s website. Simply go to the Sweden country page where you will find information on: ? Economic background and geography ? Customs & regulations ? Selling & communications ? Contacts & setting up ? Visiting and social hints and tips MORE DETAILED SECTOR REPORTS Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including: ? Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, contacts and support during your visits overseas. ? Export Marketing Research Scheme. Advice on market research and help to contact subsidised market research administered by the British Chambers of Commerce on behalf of UKTI. Contact your local International Trade Advisor if you are interested in accessing these services, or for general advice in developing your export strategy. Helena Lindquist Senior Trade & Investment Adviser UK Trade & Investment Sweden +46-8-671 30 53 Page 7 of 8 Wind power - Sweden PUBLICATIONS ? Svensk Vindkraftstidning (printed publication in Swedish) ? ERA (Swedish language publication for the Swedish and Nordic power industry with about 30 000 readers), also available online: ? Ny Teknik (generalist engineering publication in Swedish, also available online: ? Nordiska project (website providing information about projects in various sectors in the Nordic countries, including wind power) EVENTS ? Green Britain (during the Think Britain week) in Gothenburg 16 June. Seminar and match-making event with Swedish wind power industry organised by UK Trade & Investment. For more information, please contact: ? Nationella Vindkraftskonferensen (in Swedish), 27-28 April in Kalmar, see: ? Vind 2010 (In Swedish), 15-17 September in Gothenburg: ? Miljöforum Öland, conference and exhibition focusing on small scale renewable energy production, September 2010 on the island of Öland. UK Trade & Investment?s Tradeshow Access Programme (TAP) can help eligible UK businesses take part in overseas exhibitions. Attendance at TAP events offers significant benefits: ? possibilities for business opportunities both at the show and in the future ? a chance to assess new markets and develop useful contacts ? grants are available if you meet the criteria ? UKTI staff overseas will be available to assist delegates Find out if you are eligible to apply to attend this event, and more about the support UKTI can offer, on the UKTI Market Entry web page. Details of TAP events can be found in the Events portlet on the Sweden page. Other Market Visit Support may be available via your local International Trade Advisor. CONTACT LISTS Swedish Wind Energy: Swedish Energy Agency: Swedenergy: UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. You can trace your nearest advisor by entering your postcode into the Local Office Database on the homepage of our website. For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. Page 8 of 8
Posted: 22 September 2010

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