Swedish Wind Farms Facing Bankruptcy
By Paul Homewood
From the Brussels Signal ;
Two Swedish economists have issued a warning that the country’s wind-power industry is on the brink of a wave of bankruptcies.
Christian Sandström and Christian Steinbeck analysed wind-power companies’ annual reports in Sweden and their work revealed “significant financial problems”, they told Swedish media outlet Kvartal on February 28.
“The total loss for the years 2017–2022 amounted to 13.5 billion Swedish krona [€1.2 billion], which meant a loss margin of 39 per cent,” they said about the sector.
Such heavy losses seem to be the rule rather than the exception for wind-power companies in Sweden, according to the annual reports.
The Swedish Government has been pushing its national energy policies in a “green” direction, promoting wind power and decommissioning nuclear power plants. But the cost appears to be much more painful than previously thought, the economists stressed.
Sandström and Steinbeck have been pointing towards profitability problems in the wind sector for some time “despite suppliers benefiting from Government support through electricity certificates and being exempt from covering the entire expenses associated with grid adaptation for wind energy or the depreciation of properties near installations”.
Since the economists’ initial findings, Markbygden Ett, Sweden’s largest wind-farm installation with 179 turbines, is already facing bankruptcy, stacking up hundreds of millions of krona in debt.
The firm is not alone – many other alternative-power companies in Sweden are in trouble.
Sandström and Steinbeck pointed out that the sector as a whole has not made a profit in any year since 2017.
Company losses have ranged from 19 per cent to 90 per cent of turnover between 2017 and 2022, they said.
“The losses are simply because the industry cannot produce electricity at a cost below the market price, despite extensive subsidies,” the economists noted.
“That would put any other industry out of business, [although] the rate of investment has been very high.”
Both newer and older plants in the heavily subsidised industry shed cash, while economies of scale are also a limitation. The biggest farms make the biggest losses and only moderate-sized wind farms, with between 20 and 30 turbines, are turning any profits and those are at best described as “modest”.
Costs have failed to come down despite growing experience among those operating in the sector and the researchers did not observe any correlation between time elapsed and increased electricity production from existing turbines.
“Just as sailors on sailing ships once had to pray to higher powers for wind to get somewhere, wind farms can only wait for the right amount of wind,” they added.
On top of that, just 20 per cent of wind turbines in Sweden are Swedish owned. The rest are operated by foreign enterprises. Some 13 per cent of the reviewed turbines are Chinese.
Sandström and Steinbeck said the Chinese investors made their calculations based on “wind mapping” carried out by the Swedish Energy Agency and they have doubts about the accuracy of the data.
Also hammering profits is the fact that large parts of the Swedish wind-power industry cannot transfer or save power over-generation, meaning electricity needs to be consumed instantly or not at all – making it effectively unsustainable.
A few wind farms in the South of the country have gained financial momentum in recent years but all the others are stacking up more losses.
The academics noted that the change in the Swedish energy mix – decommissioning nuclear plants in favour of wind power – was politically driven and that no robust, financial independent industry has subsequently emerged.
A peculiar paradox also haunts the sector, the economists stressed. Low levels of wind leads to high electricity prices yet it also hinders electricity delivery.
On the flip side, when the wind is more powerful, oversupply drives down prices when there is ample electricity for sale.
“It is difficult to see a way out of this dilemma,” Sandström and Steinbeck concluded.
Three things stand out here.
One is that Sweden does not appear to have our system of constraint payments:
Second is the fact that low winds mean high market prices, and vice versa. Obviously wind farms make their money when the wind blows, so low prices at those times drastically impact earnings.
In the UK, the CfD subsidy protects wind farms from these fluctuations, whilst ROC subsidies are generous enough to offset low market prices.
And thirdly, the article rightly notes that wind farms don’t have to pay for grid adaption and other wider system costs.
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“Sandström and Steinbeck said the Chinese investors made their calculations based on “wind mapping” carried out by the Swedish Energy Agency and they have doubts about the accuracy of the data.”
That’s not surprising.
The real-time accuracy of National Grid ESO’s wind power forecasting tool that produces hourly forecasts for the period from 20:00 (GMT) on the current day (D) to 20:00 (GMT) (D+2) is frequently poor.
Its objective is to provide a visual summary of the relationship between outturn and forecast data.
<blockquote>”NGESO forecast modelling is based on both historical outturn as well as local wind forecasts. This will provide wind generation forecast for wind farms which are visible to the ESO and have operational metering. This graph shows the actual outturn, derived from the Generation by Fuel Type data, to show a direct comparison between wind generation forecasts and out-turn. The Forecast value represents a single MW figure across all Power Park Modules available from this location.
NGESO will publish updates to the forecasts values up to 8 times a day at 03:30, 05:30, 08:30, 10:30, 12:30, 16:30, 19:30 and 23:30. For visualisation purposes, only the earliest and latest forecasts values are presented on the website and the evolution of the forecast for each time is available via the APIs.
In reference to the Out-turn Forecast Value, the MW totals represent an estimate of telemetered Wind Farm generation on the GB Transmission Network. Where available, real time telemetry is used, where it is not estimates of outturns are used.” </blockquote>
https://bmrs.elexon.co.uk/wind-generation
There are occasions when even the shortest period’s forecast has been 7x the outturn
https://i.postimg.cc/PJHpcYgG/temp-Image-DTSz-Yl.avif
I looked at this some years ago when the wind fleet was rather smaller. Even then, there was an obvious level above which curtailment meant that the outturn was way below forecast. Excluding those higher levels there were substantial deviations with a bias towards overestimating. I probably posted the charts at Euan Mearns’ Energy Matters, but it might take some searching to find the thread. Revisiting a few turned up some interesting and prescient discussions, but not those charts.
A couple of points in the article are puzzling.
It does not mention that, while Sweden is decommissioning some old nukes, they are also pushing ahead hard with plans for new plants.
Secondly, if the article is correct, it’s surprising that they do not have any arrangement with their neighbour Norway to export surplus power into the hydro system and import when wind output is low. This is what Germany and Denmark do (and maybe the UK?) so, given the proximity, it’s odd that Sweden does not do likewise.
The Baltic and Nordic grids are highly interconnected and do exactly what you suggest.
in fact (IIRC) in a 2011 Norwegian drought Norway was heavily dependent on Swedish nuclear exports.
Sweden generates about 175TWh annually but only consumes itself about 125TWh -the rest being exports. Interstingly its annual generation of just hydro and nuclear alone is greater than domestic consumption.
This easy to understand interactive map also shows interconnector flows
It’s worth taking a look at the regional composition of generation by clicking on the the areas SE1 to SE4. Then also looking at the zonal prices from Nordpool:
https://data.nordpoolgroup.com/auction/day-ahead/heprices?deliveryDate=latest&deliveryAreas=SE1,SE2,SE3,SE4,SYS¤cy=EUR&aggregation=Hourly
SE4 is heavily influenced by the interconnection to Denmark and Germany.
“The Swedish Government has been pushing its national energy policies in a “green” direction, promoting wind power and decommissioning nuclear power plants.“
Unmitigated twaddle.
https://world-nuclear.org/information-library/country-profiles/countries-o-s/sweden.aspx
How is that “promoting wind power and decommissioning nuclear power plants.“? Secondly Sweden’s national electricity generation is dominated by hydro and nuclear – wind and solar(?!) are largely irrelevant on the Swedish grid.
And hydroelectric can be considered one great big battery that can be ramped up when wind conditions are poor and ramped down when they are favorable.
Sweden also exports a lot of power but you might suspect when wind generation is high in Sweden, it’s also high in Northern Europe so the price is low and it’s likely not generating when prices are very high due to poor wind conditions regionally.
Ray S: thanks for setting out the facts which show that the article’s assertions are indeed “unmitigated twaddle”.
New government.
https://en.m.wikipedia.org/wiki/2022_Swedish_general_election
Is anybody aware of any wind farm that operates without direct or indirect subsidy? I recall our very clever politicians and Carbon Brief telling us wind was nine times cheaper than gas (for one day).
I guess that rather depends on how you define the term “subsidy” There are a few who claim to be subsidy free notably this one.
https://windeurope.org/newsroom/press-releases/worlds-first-offshore-wind-farm-without-subsidies-to-be-built-in-the-netherlands
But when you dig deeper you find they still get priority grid access, still get constraint payments, still get free grid connections, still get preferential finance arrangements etc etc
What concerns me more is the parlous state of our supposedly reputable research units who churn out dross like this
https://www.imperial.ac.uk/news/200353/offshore-wind-power-cheap-could-money/
Dating from 2020, when some people appeared to believe what Wind Subsidy Farm owners claimed.
Greens in Green jobs promoting Green stuff.
Also hammering profits is the fact that large parts of the Swedish wind-power industry cannot transfer or save power over-generation, meaning electricity needs to be consumed instantly or not at all – making it effectively unsustainable.
Uhh . . . so wind-power is unsustainable? ‘cannot transfer or save power‘ has ALWAYS been the case.
I’m getting the idea that Sweden build wind generation without having customers lined up.
If you haven’t got a business you won’t make a profit, just lose your shirt.
Wind power is not a business. To have a business you need to be able to supply market demand at a cost lower than what the market will pay, and have a product that gives the consumer advantages and benefits that the competition doesn’t.
Wind power does none of this. No matter how much rouge you put on the cheeks of a corpse, it will still rot.
Subsidies: these indicate the risk is too high for a bank to lend or investors to invest in order to capitalise a business. It is a very large, loud, alarm bell. If banks and investors won’t take the risk, why should taxpayers be forced to take the risk?
“No matter how much rouge you put on the cheeks of a corpse, it will still rot”.
Love it !!
It’s not a business; it’s a hobby.
The law of sod is waiting to take a hand: just as the ‘mills look like making a profit they’ll come to end-of-life and need (expensive) replacement.
Kikes will keep on stealing from their slaves. Have more bread and circus while they keep building underground bunkers to protect themselves from you.
Kikes? Aren’t you the intelligent one.
Why are racists always do dim?
I bet that the STATE will rescue them…