24 October 2022

Sea based wind farm firms demand state clearances 

Applications for up to a total of SEK 400 billion for sea based wind energy production are now pending the Government’s OK. Several of the applying energy companies are underlining the urgency of these state clearances. The share price of Swedish wind and solar developer OX2 has plummeted on fears that the new energy policy will threaten the company's large offshore wind projects in Sweden. OX2 Chief Executive Paul Stormoen said he hoped its new wind farm permit, which could provide a total of 40 TWh of new energy power production in southern Sweden, would be approved soon. German energy group RWE has now also said that it still hopes to get permission soon to apply for its huge wind farm Södra Victoria in the Baltic Sea, which is estimated to be able to produce 6-8 TWh of electricity per year, equivalent to the capacity of the entire decommissioned Barsebäcksverket. Denmark's Ørsted has applied to build the Skåne wind farm, which is said to be capable of generating half of the electricity consumed in Skåne. However, it declined to be interviewed about the new Swedish Government's energy policy and how the company's application and plans would be affected.

State-owned Vattefall’s multi-billion project may, for example, be endangered if the Government stops contributing to sea based wind power, according to its CEO Anna Borg. The paper recently carried out an inventory of all the projected sea based energy projects in Sweden planned both by Swedish as well as by foreign large corporations for southern Sweden, where electricity prices now are very high. Urgency was their common denominator. Then, the government changed and these large projects are still awaiting go aheads - or not. While the new Government's Tidö Agreement flags for renewed investments in nuclear power, it does not support continued state funding for sea based energy production. This has affected share values of some of these sea based energy companies and caused major concerns about the future of the firms engaged in sea based energy production in Sweden. Anna Borg underlines that for energy firms it is imperative that the state ensures a grid to plug into, quite irrespective of where and how the power is generated.

Dagens industri

E-commerce giant Amazon buys electric trucks from Volvo

US e-commerce giant Amazon is buying heavy-duty, all-electric trucks from Swedish truck giant AB Volvo for its German fleet. By the end of 2022, AB Volvo will have delivered 20 all-electric heavy-duty trucks to Amazon. The trucks are Amazon's first step in electrifying its German fleet and will be used for regional traffic. Volvo Trucks' goal is that 50% of all new trucks sold should be electric by 2030. In the first half of this year, AB Volvo delivered 116,421 trucks. Of these, 409 were fully electric, representing 0.3% of deliveries. Compared to the same period last year, electric deliveries have increased by 230%.

Dagens industri

Tax relief for solar cell installation increased in Sweden

The Moderates, the Christian Democrats, the Liberals and the Swedish Democrats have agreed to change the tax relief for the installation of green technology by increasing the subsidy rate for the installation of solar cells from 15% to 20%, i.e. the so-called green deduction of 20% of the cost of labour and materials billed. The proposal with this implication was submitted in the memorandum. The proposal amends section 7 of the law (2020:1066) regarding the procedure for the tax deduction for the installation of green technology. The change is intended to take effect on 1 January 2023 and will apply to installation costs paid after 31 December 2022.

Press Release 

Financial institutions back H2 Green Steel's SEK 38 billion debt financing

H2 Green Steel has announced that European financial institutions have backed the company's SEK 38 billion debt financing. These institutions intend to support the company and its hydrogen-powered green steel plant in Boden through credit guarantees and loans. H2 Green Steel will finance the construction of its hydrogen-powered steel plant in Boden through a combination of equity and debt financing. The debt financing support includes the following.

• H2 Green Steel has received conditional financing commitments from AB Svensk Exportkredit (SEK) and commercial banks BNP Paribas, ING, UniCredit, Societe Generale and KfW IPEX-Bank for SEK 36 billion of senior debt.
• The European Investment Bank has received board approval to provide SEK 8 billion of senior debt financing for H2 Green Steel's projects.
• Export credit agencies, including Germany's Euler Hermes, have issued letters of intent to provide SEK 16 billion of export credit related guarantees for H2 Green Steel's expected senior debt.
• The Swedish National Debt Office has issued a letter of intent to provide a green credit guarantee of SEK 11 billion for H2 Green Steel's senior debt.
• H2 Green Steel has secured conditional financing commitments of approximately SEK 5.5 billion from a leading infrastructure fund, including large Nordic investors, in connection with their lead participation in a junior loan arrangement. 

Press Release

What we're reading

• EU leaders hail breakthrough in gas cap plan to tackle energy crisis (Financial Times)
• China’s climate goals need $14tn for power and transport, says World Bank (Financial Times)
• The Netherlands [also] leaves embattled Energy Charter Treaty (Politico)
• European offshore wind companies push into Asia to beat Chinese rivals (Financial Times)

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