Three events cooperated to drive up the price of electricity.

The first was a general and continuing increase in "real" demand due to a strong economy. While total demand stayed the same, nuclear overbuild in the 80's had created surplus power which was absorbed by wasteful consumption in the form of electrical heating. As real demand grew, this phantom demand shrunk as more houses switched to more efficient district heating or heat pumps.

The second thing was the deregulation of electricity markets. With the introduction of marginal cost pricing in the oligopoly of the Nordic electricity market, power prices and corporate profits predictably soared as production costs slowly fell even further. This was further exacerbated with the construction of interconnectors to the continent, where the cost of electricity has traditionally been far higher than in Scandinavia.

The third important event was the premature closing of the two small 600 MW reactors of the Barsebäck nuclear power plant. This was a concession by the ruling Social democrat government to secure the support of the Swedish "green" party. It's also probably the single most CO2-driving decision in the history of Sweden.

Barsebäck, a mourned symbol of modernity.

Suddenly, the stage seemed set for a big expansion of windpower in Sweden. Optimistic plans were made, but alas, this was not to be.

Ironically, the overly strict and bureacratic Swedish environmental regulations made many projects never-ending nightmares. It was not unusual for 5 or even 10 years of hearings, court rulings, appeals and reappeals from the start of the project until the first real construction work could begin. And not only did the environmental courts try to slow and block the projects, locals living in the vicinity of the projects fought them with frenzied fervor.

And when things at long last started moving a few years ago, the crunch in wind power manufacturing struck. The strongly increasing demand for wind mills drove costs, especially for the offshore farms preferred by Swedish power companies. It didn't help that the Swedish wind power was far less subsidised than in other countries and that power production costs were lower. The wind mills manufacturers choose to sell to greener pastures as more and more Swedish projects were shelved, all the anguished bureacratic efforts to no use.

The gap in demand was instead, hugely ironically, filled by a massive expansion in nuclear power via uprates in the countries remaining 10 reactors. Far greater capacity came online, and is still coming online, than was lost in the irrational closing of the 1200 MW Barsebäck plant. Wind power did not even reach place number two in new capacity. CCGT did that. Gas had earlier been unheard of in the baseload role in Sweden. Everything seemed pretty dark for wind.

That is, until now.

SCA, Statkraft to build wind farms in Sweden

 STOCKHOLM, Sept 14 (Reuters) - Swedish hygiene and paper firm SCA and Norway's Statkraft on Friday agreed to join forces to build windfarms in northern Sweden and explore a possible expansion of hydropower.

The two firms also signed a ten-year deal under which Statkraft would supply electricity to SCA.

State-controlled Statkraft will provide the 16 billion crown ($2.39 billion) funding while SCA, Europe's largest maker of corrugated packaging and hygiene products, would grant land for the seven farms in Sweden's Vasternorrland and Jamtland.

[...]

 In a statement, the companies said they were aiming for the farms to produce 2,800 GWh of wind power electricity per year, and that the sites would now be subject to environmental assessments and planning.

"We have made an inventory of our 2-1/2 million hectares of forest land in northern Sweden in order to find locations with favourable conditions for wind power production," said Kenneth Eriksson, President of SCA Forest Products, in the statement.

[...]

In a separate statement, SCA said it would invest 800 million crowns in its Ortviken paper mill in northern Sweden to increase production, an investment it expects to complete by spring 2009.

The mill produces paper for newspapers and magazines and uses 1.8 TWh of electricity per year. SCA's Swedish industrial operations consume nearly 3 TWh per year.

There are several important things to note here. First, we are talking about a lot of power. Seven wind farms with a total output of 2,8 TWh should be somewhere around 400 2,5 MW units, depending a bit on the capacity factor.

Furthermore, the windfarms will not be built offshore but onshore, something which is bound to keep costs down.

They will be built on land already owned by the forest company SCA, probably in remote and sparsely populated areas which will reduce complaints by locals, who most likely are rather reliant on the big corporation for jobs anyway. There should not be much feelings that a power company is screwing over the locals by taking something from them (their view) while keeping all the profits. The view situation is improved further by the fact that the wind farms will be built in forest. Only the wings will be above the treetops, and with the short distance you can see in the forest, they should be practically invisible.

Finally, it's noticeable that the basic industries don't trust the markets to provide competitive electricity. The only way to get that is to build and own power plants yourself. The chairman of the board of SCA has argued intensely for reregulation of the power market.

And now, we have this.

   
   
   

Vattenfall och Sveaskog i Sveriges största vindkraftsatsning		Vattenfall and Sveaskog in Sweden's biggest wind power deal
Vattenfall och Sveaskog inleder ett samarbete som öppnar dörren för den största vindkraftsatsningen i Sverige. [...] Som mest kan samarbetet innebära cirka 550 vindkraftverk med en effekt på totalt 1 500 MW. Det är 40 procent mer än någon annan vindkraftsatsning i landet. De 4 TWh som investeringarna kan resultera i motsvarar cirka 3 procent av Sveriges totala elproduktion.		Vattenfall and Sveaskog enters a joint venture which opens the door to the biggest development of wind power in Sweden. [...] At most the joint venture can result in 550 wind mills with a total effect of 1500 MW. This is 40 per cent more than any other wind power development in the country. The 4 TWh the investments can result in represent circa 3 percent of the total electricity production of Sweden.

These are really, really great news. With a combined capacity these two projects will produce 6,8 TWh, almost as much as the 8-9 TWh of the Barsebäck plant. That is 5 % of all power production, and that means we are for the first time talking about serious levels of production.

Now, we only need to build the damn things, and while we are at it, restart Barsebäck...