I think more wind power will dampen Swedish electricity prices – E24
Both Norwegian, Swedish and Danish wind power set new records in January. Increased wind development could lower Swedish electricity prices in the coming years, according to the industry organization.
The processing of new applications for onshore wind power in Norway has been halted pending new regulations, and it will probably be many years before new power plants can possibly be set up.
However, Norway’s neighboring countries continue to develop wind power, and Sweden in particular has big plans. It can also help to give Swedish electricity prices in the coming years, the Swedish wind industry believes.
In January, Sweden’s wind power set a new monthly record, with a production of 4.2 terawatt hours (TWh), according to the industry organization Swedish Wind Energy, which points to high from the North Pool. The previous record was 3.3 TWh in January 2020.
Danish wind power also set a record in January, with a total production of 2.3 TWh, up from 1.2 TWh in the same month the year before, according to the industry organization Wind Denmark.
Norwegian wind power also set a monthly record in January 2022, with a production of 1.73 TWh, up from 0.77 TWh in January last year, according to figures E24 has received from NVE.
The previous monthly record for Norwegian wind power was 1.4 TWh in December 2021, according to NVE.
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– Thrives best in winter
– Wind power thrives best in winter, when the electricity needs it most. 60 percent of the production takes place in the winter, says Tomas Hallberg in Swedish Wind Energy, according to one fusion.
Swedish Wind Energy estimates that the annual production of wind power in Sweden will increase from around 29 TWh today to 49 TWh in 2024. The total Swedish power production is at about 160 TWh in the year.
In the cold half of 2024–2025, wind power will be able to deliver around 30 TWh, or 5 TWh per month, the organization estimates.
Increasing wind power production could dampen electricity prices in Sweden, according to one report Sweco has recently made for Swedish Wind Energy.
For every new terawatt hour of wind power production that is installed, the annual average of the electricity price in southern Sweden (SE3 and SE4) can be reduced by 0.4 Swedish øre per kilowatt hour, Sweco estimates.
This means that 20 TWh of new wind power until 2025 will be seen in the annual average of the electricity price in these areas with a total of eight øre kilowatt hours, according to the analysis.
How large this price effect will be, however, also depends on other factors, such as the prices of fossil power in Europe, the quota prices for CO₂ and the transmission possibilities in the Swedish electricity grid.
– It is in the interest of all electricity consumers that the expansion of wind power continues to be strong, said Hallberg in January when the report was presented.
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– Would be able to lower prices
If Norway had developed more wind power on land, it could have lowered Norwegian electricity prices, according to partner Marius Holm Rennesund in Thema Consulting.
– It could lower prices. All other things being equal, increased production will definitely bring down the price, he says.
The subject has previously made several studies for the wind industry organization Norwea. In 2019, Thema estimated that the Norwegian electricity price in 2030 would be around five øre the kilowatt hour lower with wind power still.
In a report from January this year, Thema estimated that the price of electricity in southern Norway would be eight øre kilowatt hours more expensive without wind power.
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– Eats up the profit quickly
Norway expects a sharp increase in electricity consumption beyond the 2020s, while power production is not expected to increase as much. The power surplus can thus fall to only three TWh in a normal year already in 2026, Statnett said recently.
– Right now it is stagnant in the development of land-based wind power in Norway. And if you take the government seriously when they say they want to facilitate more green industry, then you quickly eat up the surplus of power that we have now, says Rennesund.
– Swedish power grid awaits a Swede power surplus of 30 TWh annually going forward. Can it give a advantage for the Swedes?
– We think it can do that. If we look at area prices in the future, prices in Norway could be higher than in Sweden if we do not expand more production, says Rennesund.
– And it is not an alternative to slow down Norwegian electricity exports to have enough yourself?
– If it becomes a dry year, then Norway is dependent on imports of electricity. Especially if we continue to increase consumption without adding more production, he says.
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– The need for power will increase
Project manager for communication and public relations Robert Kippe in the wind industry’s organization Norwea believes that the winter’s power shock can help to accept wind power on land. Some of the wind power has been controversial.
– Wind power accounted for around 11 percent of power production in Norway last year. We know that the need for power will increase when we have to phase out fossil energy and establish new industry. Then we need land wind, because the sea wind is some years ahead, says Kippe.
– I think it was right to take a step back and change the licensing system so that the local communities become more involved. Then we can identify the good projects that we say yes to, and say no to the bad ones, he says.
– Do you think it can be accepted for wind power if it can bring down the price of electricity?
– I think. I understand that you say no to wind power if you do not see the benefits of it. If you see that it can provide cheap electricity, new industry and activity in local business, then will probably accept increase, especially when the local environment is well mixed, says Kippe.
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– Really positive
On average, Danes use only 1,600 kilowatt hours electricity per year, which is far below the electricity consumption of Norwegians and Swedes. The 2.3 TWh of wind power that was produced in Denmark in January covered as much as 68 percent of the country’s power consumption this month, according to Wind Denmark.
Denmark’s previous monthly record for wind power was 2.17 TWh in January 2020. Denmark has recently increased its capacity through the Kriegers Flak project, among other things. In the future, there will also be more offshore wind, as RWE’s Thor project.
– It is really positive that after a year with below average wind, there is again good speed in the Danish wind turbines, says electricity market manager Søren Klinge in Wind Denmark according to a message.
Wind Denmark has previously calculated that Denmark will lack 27 TWh electricity in 2030, or three quarters of Danish consumption today. Naturally, the industry association believes that wind power can cover much of this.
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