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After knock-back, new proposals and updated MSP could boost Swedish offshore wind plans
Long a non-functioning market with a much criticised ‘open door’ approach to development, Sweden’s offshore wind regime needs reform – and reform may be coming
A December 2024 report to the Swedish government that recommended the adoption of tenders and contracts for difference (CfDs) rather than the existing open door regime, and new Marine Spatial Plan (MSP) for the Gulf of Bothnia, Baltic and Skagerrak/Kattegat, could help enable much-needed offshore wind capacity to be built in Sweden, despite a massive recent set back.
The Swedish Government Commission report, Wind power at sea: the transition to an auction system, sent to Sweden’s Minister for Climate and Environment Romina Pourmokhtari, proposed the Swedish government launch tenders for the development of offshore windfarms along the lines of those used successfully in other countries, rather than continue to use the ‘open door’ approach used to date. Advocates for offshore wind such as the Swedish Wind Energy Association (Svensk Vindenergi) have long sought changes to the way projects are developed in the country.
The authors of the report sent to the Minister say they had studied the roll-out of offshore wind capacity taking place in the rest of northern Europe and analysed the systems in Denmark, Finland, the UK and Germany and how they compared with the Swedish approach to offshore wind development.
“An important observation is that of the 25 GW commissioned in the area we assessed, only a very small part was constructed under the kind of market-based, developer-driven conditions that prevail in Sweden,” says the report.
“99.5% was built to government plans and with contract for difference schemes or other governmental financial undertakings.”
It noted that in countries such as Denmark and Finland where there was an element of developer-driven or open-door development, these schemes have been abandoned in favour of tenders and CfDs.
Industry associations such as Svensk Vindenergi have stated their belief that the current regulatory framework is not fit for purpose. It favours the model used elsewhere in Europe because a tender system means that a developer obtains exclusive rights and there is a clear framework for further development.
The report submitted to the Minister concurs with this belief and says there are five key problems associated with the existing scheme. These include the fact that planning tools are insufficient; that there is no effective tool to determine which project developer should be given priority in a particular area; that a project developer cannot have an exclusive right to an area; there is no effective co-ordination between the process of issuing permits and that of awarding connection capacity for the transmission network; and the system generates uncertainty as to if and when projects, for which a permit has been issued, will be realised. And, because these often concern windfarms with significant production capacity, the uncertainty subsequently results in significant difficulties in planning the country’s energy and the power grid.
“The five problems are best resolved through a tender system,” says the report. “Such a system determines the areas to be developed in a planning context. It allows relevant interests – including defence – and strategic environmental issues to be considered.
“A tender system means a project developer obtains exclusive rights and a clear framework for further development,” the report continues. “The award is made in a competitive procedure, which means any fee to the state will be determined on market terms. The tender procedure can also be used to establish a CfD or similar commitments on a market basis if the Swedish government so wishes.
“The tender provides immediate feedback on whether the market considers the area to be worth developing under the prevailing market conditions and a successful project developer is bound to realise the project under penalty of a fine. This eliminates, to some extent, the uncertainty as to if and when projects for which a permit has been issued will lead to actual roll-out. With a tender system, Sweden would be part of the established system currently in existence throughout Europe.”
The new MSP for the Gulf of Bothnia, Baltic and Skagerrak/Kattegat was submitted to the Swedish government in January 2025 by the Swedish Agency for Marine and Water Management. It was the subject of a lengthy national consultation and review. One of the major aims of the review of the country’s existing MSP, which dates from 2023, was to include more areas for offshore wind, sufficient to enable 120 terawatt hours (TWh) to be generated annually.
Compared with the MSP dating from 22, the new MSP – which has not yet been approve by the Swedish government – specifies 23 areas for ‘energy extraction,’ approximately 26% of which are in the country’s territorial sea and 74% in its exclusive economic zone. Overall, proposals for energy areas constitute approximately 6% of the total areas included in the new MSP.
Publication of the new MSP – which will be used to provide guidance for use by government authorities, municipalities and regions when planning and assessing claims for the use of the sea – comes after a major setback for the industry in December 2024, when the government halted 13 large projects because of concerns expressed by the country’s military.
The report and the new MSP came a matter of weeks after the Swedish projects, developed under the open door scheme, were cancelled on the recommendation of the Swedish defence ministry, a decision Svensk Vindenergi described as “surprising and problematic,” questioning why the government had categorically closed an entire area to potential electricity production “without a proper assessment.”
The projects in the Baltic that were affected by the decision amounted to around 30 GW of installed power, or about 140 TWh hours of annual electricity production. By way of comparison, Sweden today uses approximately 130 TWh of electricity annually. They were rejected because the Swedish Ministry of Defence said they would potentially interfere with its ability to defend the country.
The projects that were rejected included the Skåne, Triton Aurora 2, Southern Victoria (S Midsjöbanken), Baltic Offshore Beta, Cirrus, Dyning/Freya 3, Arkona, Pleione, Neptune, Erik Segersäll, Baltic Offshore Delta North and Skidbladner offshore windfarms. One project, the Poseidon offshore windfarm in southern Skagerrak outside Stenungsund on the west coast of Sweden was approved. It is noteworthy because it will be the first windfarm in Sweden to be built using floating wind turbines, if it goes ahead.
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