Bloomberg News

Swedish Wind Power May Slow on Price, Subsidy, Association Says

August 27, 2012

Electricity prices and subsidies at current levels in Sweden may slow growth in wind power unless decision-makers boost targets, according to the Swedish Wind Energy Association.

The nation needs to raise its political objectives for installing new wind power “if we are to avoid a steep slowdown in the construction of turbine capacity,” Annika Helker Lundstroem, the association’s managing director, said in an e- mail last week. “Currently, low power prices and electricity- certificate subsidies offer no room for raising targets.”

The association will update its forecast for growth in wind power in October. Sweden’s Energy Agency, Energimyndigheten, scaled back its outlook for wind-power production this year by 0.7 terawatt-hours to 7.1 terawatt-hours, it said Aug. 14 in a report submitted to the government. The estimate for 2013 was reduced to 8.1 terawatt-hours from a March forecast of 9 terawatt-hours, it said.

“Prices are low right now both for power and for electricity certificates, which creates challenges for some projects, though different companies are affected to highly varying degrees,” Lundstroem said.

The Swedish government aims to raise annual wind-power output to 30 terawatt-hours by 2020, while the Energy Agency still expects a yearly increase rate of 2 terawatt-hours from 2014 through 2020, supported by subsidies paid to producers by consumers via their monthly electricity bills, she said.

The average price for the electricity-certificate subsidy for the past twelve months has been 199 kroner ($30) per megawatt-hour, according to data on grid operator Svenska Kraftnaet’s website.

The Nordic power contract for 2013 was at 39.50 euros ($49.46) a megawatt-hour on Nasdaq OMX Inc.’s energy exchange in Oslo today.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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