Wind power development in Sweden: Global policies and local obstacles

Recently, the Swedish government adopted a national planning goal of a yearly wind power generation of 10 TWh by 2015, implying a substantial increase from the current 0.6 TWh level. In this paper, we provide an economic assessment of the potential for future wind power investments in Sweden in close conjunction with an analysis of the legal, attitudinal and policy-related uncertainties that face a wind mill investor. It is shown that the economics of Swedish wind power is negatively affected by: (a) the lack of policy stability; (b) public criticism at the local level; and, in particular, (c) the legal provisions governing the assessment of the environmental impacts of wind mills and the planning procedures for mill location. While national and global energy policies as well as the general public point out wind power as particularly environmentally friendly, most of the objections to its expansion at the local level tend to have environmental origins. The interests of those who object to wind mill installations gain strong legal protection, and the municipal territorial planning monopoly in Sweden implies that it is hard to make national energy policy goals heard at the local implementation stage. Compared to its competitors, wind power is the technology that tends to have the most to loose from the risk and uncertainties created by this investment environment. The paper identifies and discusses a number of ways in which the national policy interests could be strengthened at the local level. We discuss the role of citizen participation, as well as solutions within the realms of the legal system. Moreover, since the diffusion of wind power encounters the most strident legal and attitudinal obstacles where it interferes with competing land uses, a move offshore appears to be an efficient strategy from the perspective of a wind mill investor. A stronger political commitment to wind power expansion in legal provisions as well as in the form of long-run stability in policy instrument implementation will probably be necessary to attain the 2015 policy goal.

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