Swedes in the southernmost region of their country use far more electricity than the region generates, but offshore wind could provide a solution, according to Aegir Insights
In an analysis of the Swedish market, Aegir Insights found that although the S4 electricity bidding area in southern Sweden accounts for 18% of the electricity usage in the entire country, it only generates around 4% of the total electricity produced in the country.
This creates an ‘energy deficit’ that makes southern Sweden dependent on electricity imports from neighbouring regions and countries. “Swedes in the region pay the price, as the region sees the highest electricity prices in the country,” the company said.
“What little electricity is generated in the southernmost region stems mostly from wind power, with 64% of the generation coming from wind, making the region the national leader with regards to its share of wind power in the energy mix.
“The region is therefore already ‘tuned in’ to the option of wind power,” Aegir Insights said. “If the region is to supply its own energy needs in the future, it would make sense to look in the direction of wind power including offshore wind power.”
Aegir Insights believes offshore wind is especially promising for southern Sweden due to the high wind speeds there, a capable supply chain, suitable harbours and easily accessible grid connection points. The water off the coast of southern Sweden is also shallow, allowing for fixed-bottom wind turbines.
“Last, but not least,” said Aegir Insights, “the two southernmost regions in Sweden together account for 80% of the nationwide energy usage. These populous regions are home to many of Sweden’s biggest cities – including the capital Stockholm – and as urbanisation and electrification increases, the southern half of Sweden is only going to need more electricity.
“Two other electricity bidding regions in the south, S3 and S4, rely on energy imports and would benefit from increased local electricity production,” said Aegir Insights.
Sites around the southern tip of Sweden could achieve attractive cost-levels, as low as €40 MWh (US$49) for offshore wind constructed in the mid-to-late 2020s, according to Aegir Insights’ market report on Sweden.
Some projects are already on the drawing board, with the Swedish part of the area known as Kriegers Flak hoping to become operational by 2028, according to developer Vattenfall.
In a recent report on the Swedish market, Aegir Insights noted that, with very strong wind resources, the main reason offshore wind build-out in Sweden has been limited is because the country does not have subsidies specifically for offshore wind. The permitting process is encumbered by municipal veto rights, but as these constraints are addressed – at least partly by proposed legislation, which would effectively work as a grid connection subsidy – and efforts to streamline the permitting process, Aegir Insights expects build-out to begin soon, and result in operational offshore windfarms in Swedish waters in 2025-2026.
The main drivers for the build-out are energy security, replacing power from decommissioned nuclear plants and furthering the energy transition.
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