A recent analysis by engineering consulting firm Sweco showed that every terawatt-hour of new wind energy produced will reduce today’s high electricity prices by between one and a half and two cents per kilowatt-hour. This can have a huge impact on your electric bill.
The analysis conducted on behalf of Svensk Vindenergi applies to Sweden. The analysis also shows that the impact is greater in the northern parts of the country.
According to calculations by Swedish industry organization Svensk Vindenergi, savings for a homeowner in the Swedish SE 1 price range, for example in Kiruna, can now represent up to NOK 13,000 per year.
Analysis from Sweco with title “The Impact of Wind Energy Electricity Price 2022-2025” It came in November, an update of a previous analysis published in January 2022. The new analysis shows that the dampening effect on the price of new wind power has increased during the year.
In February, Russia went to war with Ukraine. This affected gas and coal prices, which rose significantly. This, in turn, has affected electricity prices. The higher those prices, the greater the damping effect of wind power, according to the analysis.
That’s what Sweco’s analysis says
- For the years 2022-2025, the average price dampening effect across Sweden will be between 1.5 and 2 euros per megawatt-hour (MWh). This corresponds to 1.5 to 2 øre per kilowatt-hour (KWh). This applies for each new TWh of new production that is added.
- For the electricity price regions SE 1 and SE 2, the northernmost parts of Sweden, the impact of the price discouragement for the period 2022-2024 will be around €4 per kWh. for 2025 somewhat less.
- The long-term dampening effect on electricity prices for wind power will be about €0.7/MWh, which equates to 0.7 øre per KWh. This also applies to each new TWh of new production. (The previous analysis from January 2022 was calculated at 0.4-0.5 EUR / (MWh).
- The price dampening effect is greatest further north in Sweden due to transmission restrictions. The restrictions are described as temporary.
- Sweco does not consider the figures for the period 2022 to 2025 to be representative of the effect of price dampening in the long term.
Almost doubled
In Sweden, 27 TWh of wind power was produced in 2021. From 2022 to 2025, this production will almost double, with 25 TWh of new wind capacity, up to 52 TWh. At Piteå, one wind farm has now surpassed Sweden’s largest nuclear power reactor in terms of installed capacity.
Svensk Vindenergi has calculated what new wind energy production will mean for Swedish businesses and households. The conclusion is that in the short term, 25 TWh will lower prices by 37.5 øre per kilowatt-hour.
For a detached house with an annual consumption of 20,000 kWh, this corresponds to NOK 7,500. The total annual reduced electricity costs for both the private and commercial sectors are estimated to be around NOK 52.5 billion. This is based on the fact that Sweden has a total annual electricity consumption of 140 TWh.
What Sweco thinks the long-term impact will be is “only” 0.7 øre/KWh when prices for other raw materials such as gas and coal calm down at a lower level. When up to 35 TWh of new wind capacity is pumped in, this should in total reduce prices by 17.5 øre per kilowatt-hour.
It can cut 13,000 in Norrbotten
In an article published in the northern Swedish newspaper Norrländska Socialdemolraten (NSD) on December 20, Svensk vindkraft CEO Daniel Badmann relied on the impact of wind energy on Norrbotten, especially in the coming years.
Like northern Norway, northern Sweden is now behind an energy supply bottleneck. This means, Sweco calculates, that new wind power will drive prices even further down here – up to 4 øre per kilowatt-hour in the next few years.
Badman’s conclusion is clear: the new wind power to be built in Sweden until 2025 will lower the price of electricity in Norrbotten by at least 65 øre per kilowatt-hour. This corresponds to $5.7 billion in reduced electricity costs annually for homes, businesses and other electricity consumers in the region.
In the debate contribution, Daniel Badmann asserts that in northern Sweden electricity consumption will now increase considerably. He is therefore encouraging local politicians in Norrbotten to facilitate more wind energy development.
Forward asked Daniel Badman for an interview. To this he replied that he did not have the opportunity this week.
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