Sweden's Wind Energy Industry Faces Growth Stagnation Amid Challenges
Sweden’s wind energy sector, which accounts for a quarter of the nation’s electricity supply, is grappling with stagnation despite a green energy boom over the past two decades. Factors include plunging electricity prices, local and military vetoes on new projects, and competition from subsidized nuclear power.
Electricity prices have fallen below zero for extended periods due to an oversupply of wind energy. This market condition has discouraged investment in new renewable projects, particularly as Sweden ended its subsidy system for renewables three years ago. The Swedish government projects electricity demand to double in two decades, but developers face delays of up to 8.5 years to commission new wind farms, compared to 2.5 years in 2010.
In the first half of 2024, 12 of 16 proposed wind projects were blocked by municipalities, and three others were halted by the military, according to Svensk Vindenergi. Additionally, last month, the government canceled 13 offshore wind projects in the Baltic Sea, citing defense concerns. This has left Sweden’s wind capacity at 16,400 MW, the EU's fourth largest, but with no new orders since Q1 2024.
RES Holdings CEO Matilda Afzelius stated, “The situation is definitely challenging.” The company is diversifying into solar, batteries, and hydrogen, reflecting broader industry shifts.
Meanwhile, proposed new nuclear plants, with 40-year contracts offering production costs of €70 per megawatt-hour, further pressure the wind energy sector. Andres Ivert of EY warns this could lead to sustained low or negative electricity prices, complicating competition for wind and solar projects.
Sweden’s goal of achieving net zero emissions by 2045, along with the global target to triple renewable capacity by 2030, hangs in the balance.
Source: Darik Business Review
