Member Article

Renewable energy sources, including wind power, represent 40 percent of the total energy production in Sweden. In order to curb climate change the European Union stated, as a part of the so called 2020-decision of the 23 of January 2009, that Sweden should increase its production of renewable energy to 49 percent by the year 2020. The bulk of this increase has to be provided by wind power farms, as most of the rivers available for hydro power in Sweden have already been fitted with hydro power plants. Consequently, the Swedish Energy Agency has set the goal for increasing the production of wind power at 30 TWh. However, a more probable increase of the production of wind power by the year 2020 is 15 TWh since municipalities have the exclusive authority to deny building permits for onshore wind farms and there is a lack of subsidies to offshore wind farms.

The construction of offshore wind farms has not met the same production rate as onshore wind farms in Sweden, primarily due to increased costs. This could be rectified by using one of the flexible mechanisms of the Kyoto protocol, the so called Joint Implementation (JI) mechanism. Under a JI-project a non-Swedish company or investor could invest in an offshore wind farm in Sweden and receive Emission Reduction Units (ERUs) corresponding to the reduction of fossil based energy production. These ERUs could then be sold by the company/investor in order to recoup some of the funding of the offshore wind farm. However, the Swedish Government has so far not been willing to recognize this form of financing of offshore wind farms as the official policy is that there is no fossil based energy in the Swedish electricity grid. Developers of offshore wind farms must therefore seek additional funding elsewhere until that policy changes.

According to developers and investors the construction of onshore wind farms receives sufficient subsidies from the Swedish Government, for example the so called green certificates. Regarding onshore wind farms the main issue is therefore not the subsidies received, but rather the quite complex legal framework relating to the application process for building permits, environmental permits and electricity concessions from the municipalities, the County Administrative Boards and the Swedish Energy Market Inspectorate respectively. The legal tradition in Sweden has provided the municipalities with a sovereign right to decide how the land areas in a municipality should be used. This fact poses a problem if the municipality is under pressure to use areas for other purposes than a proposed wind farm.

The Swedish Parliament addressed the complex legal framework regarding the necessary permits by passing amendments to the Environmental Code and the Building and Zoning Act on the 20 of May 2009. The amendments were designed to enable a more effective permit process and were thought to result in a more attractive investment environment for the development of wind farms. Thus the amendments states that a building permit no longer is required for the construction of a wind farm if an environmental permit for the wind farm operation has been acquired and if the proposed site is not placed within an attractive housing area.

However, unfortunately the amendments do not change the circumstances for production companies that want to construct onshore wind farms in municipalities that are negative to wind farms as the amendments state that environmental permits cannot be granted if the municipality does not approve the proposed wind farm.

Since more changes are necessary to fulfill Sweden’s obligations regarding renewable energy sources and the amendments indicate that the Swedish Government has strong wishes to increase the production of wind farms it will be interesting to follow the coming development regarding subsidies and the legislative framework.