Low prices on electricity and electricity certificates, and on top of that harsh winters, has made investment in wind energy in cold climate a real challenge.
The boom in wind energy in Sweden that prevailed from around 2007 to 2011 has come to a halt. And the power has switched from the seller to the buyer.
But profit is scarce and and it’s hard to create black numbers from wind in cold climate in short term view.
Fredrik Bergström, business manager at Danske Commodities is helping customers to find the right projects to invest in.
Which are the key factors to look out for in the market?
– The price of electricity, of course. That’s a major factor. The market would need a price
around 0,65-0,70 Swedish crowns (around 0,08 euro) to reach an expected return on investment around 10-12 percent.
– Today the price is down to 0,5 Swedish crowns (circa 0,06 euro). The calculation just doesn’t work out. A lot of projects even have a negative return on investment.
But there’s also operational issues, right..?
– Yes, you have to look for projects with the right technology, especially in cold climate.
With that I mean specifically turbines with anti-icing systems.
– You want a high availability factor, a 10 precent cut in availability can mean a drastically changed calculus.
Has there been a lack of focus on the operational issues?
– Definately, we have a lot of turbines running in cold climate that lack the right technology to withstand heavy icing. Some years ago it was the sellers market and the turbine makers used the motto ”one model fits all”. Today the awareness that you need special technology in vold climate has hit home.