Sweden's energy system can manage without Ringhals 1 and 2. So, look to abolish the connection fees for offshore wind power so it can compete in Sweden, writes Torbjörn Severinsson and Oskar Almén, energy experts at PA Consulting.
Lately, people have been calling for a new or updated Energy Agreement in Sweden. The continued operation of Ringhals 1 and 2 nuclear plants is the big issue. But talk should focus on alternatives such as offshore wind power, where the willingness to invest is almost non-existent due to prevailing market conditions.
To overcome this, parliament must decide to abolish connection fees, which was one of the intentions of the existing Energy Agreement. Only when this has become reality can offshore wind power become a reliable alternative energy source in Sweden.
Denmark, the Netherlands and Germany have already introduced support that benefits offshore wind power and it would be strange if Sweden could not do the same.
Without support, it’s unlikely new offshore wind power will be built in Swedish waters. The individual projects that have been commissioned in Sweden over the past ten years seem to remain unprofitable. The development cycle for new projects is long and contains a time-consuming permit examination. For those areas where permits have already been granted, it’s unlikely the wind farms will be in operation before 2025.
Sweden has good conditions for wind power, both on land and at sea. Geographically, there is good reason to expand the offshore wind power along Sweden's southern coast. There, electricity consumption is high and there’s a production capacity deficit.
More expensive at Sea
The global market for offshore wind power is also increasing rapidly. The challenge in all countries is that it is considerably more expensive to construct wind turbines at sea than on land. Despite this, thanks to rapid technology development in the area, there are currently examples of offshore wind power projects under development that show better profitability than the worst projects on land, with the connection fees included.
In the UK, there’s now support for offshore wind power projects with planned starts in 2024-2025. Compensation is guaranteed at just over 60 öre/kWh. Since it is more expensive to build in the North Sea, where the British project is now being installed, than in the Baltic Sea, offshore wind power projects in Swedish territorial waters should be successful. But Svenska Kraftnät has the cost of the network connection, which some say constitutes 15-20 percent of the total investment.
Compensate for Ringhals
Through the Energy Agreement, Sweden's politicians should be able to create good conditions for wind power, both on land and at sea. Removal of connection fees could mean a large increase in offshore wind power in Sweden, which could compensate for the electricity produced by the two Swedish nuclear power plants, Ringhals 1 and 2.
Some proposals for a new Energy Agreement are good, but, in our view, continued operation of Ringhals 1 and 2 is not. Politicians also risk focusing short-term measures on the wrong issues when decisions on the closure of the two nuclear power plants have already been taken. A new debate on nuclear power risks being counterproductive as the willingness to invest in wind power declines. We therefore think it is important that the politicians focus on the right things in the implementation of the Energy Agreement.
A large-scale expansion of offshore wind power will mean thousands of new jobs and this will not be at the expense of reduced investments on land since the electricity certificate system has already played its part.