Sweden, a global leader in renewable energy, faces an oversupply of clean electricity, becoming a problem for its wind power sector. The rapid expansion of wind turbines throughout the Nordic nation over the past two decades has resulted in power production exceeding the capacity of the national grid.
Nearly 96% of the country’s electrical demand is met through low-carbon sources. Wind power accounts for about a quarter of the nation’s power supply.
However, the surplus of wind energy drove energy prices below zero. Energy experts expected this trend to persist for several years.
While lower prices are beneficial for consumers, they have diminished the financial appeal of investing in new wind projects, complicating the future of Sweden’s wind industry.
The Swedish government phased out its primary subsidy program for renewable energy projects three years ago, leaving developers to rely on market-driven investments.
Following this policy shift, there haven’t been any new wind turbine orders in Sweden since the first quarter of 2023. It marked the longest hiatus in two years, and now, developers face diminished returns.
Adding to the challenge is Sweden’s push for new nuclear energy developments, which come with long-term price guarantees.
Though nuclear projects, like other renewables, receive no direct government subsidies, they benefit from incentives such as loan guarantees and other financial mechanisms unavailable to wind developers. Experts argued that these advantages, combined with the lower energy production costs of nuclear plants, will make it difficult for wind projects to remain competitive.
