Renewable Energy
Growth of wind power in the Nordic Region – a look at the drivers
Wind power is the world’s single fastest-growing source of energy. Growth in this market is fuelled by rapid technological development enabling large-scale energy production at a competitive cost per produced kWh.
La energía eólica es la única fuente de energía de rápido crecimiento en el mundo. El crecimiento en este mercado está estimulado por el rápido desarrollo tecnológico que hace posible una producción energética a gran escala a un precio competitivo por kWh producido.
Windenergie ist die am schnellsten wachsende Energiequelle der Welt. Das Wachstum in diesem Markt wird durch die schnelle technologische Entwicklung angeregt, durch die eine umfangreiche Energieerzeugung zu wettbewerbsfähigen Kosten pro produzierter kWh möglich ist.
S
wedish wind power is a very young but rapidly growing market. Installed capacity has grown by close to 40 per cent between 2006 and 2010 and a continued high pace of
production is expected in coming years. Having so far escaped the worst of the euro zone’s economic crisis, Sweden saw its wind-energy capacity rise by about 744MW last year and around 6.1TWh of Sweden’s total electricity was generated by wind in 2011, which is an increase of over 70 per cent on 2012 figures. Sweden’s wind resources, low population density and availability of balancing sources of energy provide great growth potential for further advancement into the wind sector. Te growth and profitability of Swedish wind power drives an increasingly active market, attracting energy producers, developers, utilities, and financial stakeholders; which as a result leads to an increase of job opportunities within Sweden and the wider Nordic region.
Electricity prices Electricity prices in the Nordic region have been steadily increasing over the past ten years, with an annual growth rate of 15 per cent. Impacting this growth rate in the future will be energy consumption, commodity prices and carbon emission pricing. It is predicted that economic recovery will
bring increased electricity consumption, and combined with increased global commodity prices and political initiatives surrounding carbon emission rights this could put renewed pressure on Nordic electricity prices. It is new energy production capacity, specifically from wind power which could counteract this increase in electricity costs. In addition further integration with other
European markets via new cables could provide opportunities for the export of carbon-free energy to countries with higher electricity prices and more difficult preconditions for such production.
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In fact, Gunnar Fredriksson, Deputy Chief Executive of the Swedish Wind Energy Association, is keen to hear whether the government will accept a proposal by transmission system operator Svenska Kraftnat to address the way grid improvements are handled. At present, the first company that wants to connect to a grid has to bear the entire cost of any upgrades, while companies that follow pay nothing. Svenska Kraftnat has proposed a fairer distribution of costs, where developers would only pay for the part of the development from which they benefit.
The cost of wind projects It is wind turbine generators that constitute approximately 80 per cent of total investment cost for a wind energy project. As the turbines are paid for in EUR, expectations of a low EUR/ SEK exchange rate in 2012/13 should bring significant benefits for profitability. In 2010, overcapacity among turbine manufacturers created an oversupply of turbines. Combined with continuously increasing competition this has decreased the power that the supplier has and as a result prices for turbines have dropped by approximately 25 per cent compared to 2008. In addition, delivery times have fallen from 2–3 years to only a couple of months. “Te trend towards large turbines - the most common size is 2-3MW - has made the turbines more effective in Swedish wind farms,” says Gunnar Fredriksson, Deputy Chief Executive of the Swedish Wind Energy Association. Tis preference for larger wind turbines and
higher towers is expected to continue. Terefore, intensified competition among turbine manufacturers and continued technological development bringing lower costs per produced kWh should be of benefit to wind farm developers in the Nordic region during 2012/13. Tus, increasing the speed that new wind farms can be developed. Denmark, Spain, Portugal, Ireland, Germany,
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