25 October 2022

Svenska kraftnät's billion-dollar plan in trouble after new government announcement on wind power

The Swedish grid operator, Svenska kraftnät, is working on a multi-billion dollar project to attract investment in offshore wind power. With the arrival of a new government, these plans may soon come to a halt. Last autumn, the previous Swedish government commissioned Svenska kraftnät with plans to expand the offshore transmission network. The mandate was based on the government's decision to remove connection costs for offshore wind in order to encourage investment. According to Svenska kraftnät, connections to land account for 15 to 30% of the total cost of offshore wind projects. This summer, the authorities announced their initial plans to establish six connections along the Swedish coastline. With initial cost estimates of SEK 30 to 42 billion, the venture will open up investment in wind farms equivalent to the electricity consumption of 8 million households. The authorities have been working on the project since the beginning of this year. But now, with a new policy in place, Svenska kraftnät is placed  in a position of uncertainty.

DN

Norwegian government ups the ante for state-owned enterprises

The Norwegian government will require all Norwegian state-owned companies to set targets and implement measures to reduce emissions in line with the Paris Agreement, and report on target achievement. Where available, the state expects the targets to be science-based, it added. Norway’s state ownership is considerable, with 70 companies estimated to be worth NOK 1,179 billion

Press release

Energy expert predicts next winter will be far worse

Morten Springborg, an energy expert at fund manager C Worldwide Asset Management and former member of the Danish government's energy committee, reckons that if it is a mild winter, Europe will manage it without blackouts, even if Russia were to stop supplying the little gas the country supplies, via Ukraine. But, he predicts that this winter will be nothing compared to the next in terms of electricity prices. He says that most of the gas stored in Europe is now Russian gas and believes it is realistic that Europe will not import Russian gas next year. And he says that China and Europe will be competing for gas in 2023. The cost of gas is still much higher than normal and Morten Springborg said that the energy shortage in Europe will have a serious impact on the European economy. If the situation persists, Europe will fall into stagflation. Power-intensive industries such as aluminium, fertilisers and metals have already shut down. This is not a short-term story, but more permanent. As energy prices in Europe are significantly higher than in other parts of the world, including the US and China, companies are considering moving production outside Europe. 

The challenge is that while there is gas available globally, there is a problem with contractual length, as long contracts are difficult to sign for European companies. Firstly, the companies are stopped by the EU's taxonomy, which only classifies natural gas as green until 2035. After that, natural gas must be transformed into hydrogen gas to be called green. Secondly, the companies do not know what will happen to Russian gas in the long term - if there is a regime change and Russia starts exporting cheap gas again. 

SvD

Engine manufacturer Agco Power invests €100 million in the development of an engine that can also run on hydrogen

Engine manufacturer Agco Power has developed a new engine that can also run on hydrogen. The new engine range complies with the emission regulations for work machines without exhaust gas recirculation. This has been grounded with investments of 100 million euros, where the factory has been prepared for the new engine family. About half of the investment has gone into the development of the new engine. The new engine will enter mass production at a plant in Linnavuori by the end of 2022. The engine has 25% fewer parts than the old design, which accelerates assembly significantly.

KL

Zinkpower goes 100% green

Since 2020, Zinkpower, which has 2 plants in Denmark, has relied 100% on sustainable electricity from wind turbines for its energy-intensive galvanising plant. This is expensive - Zinkpower uses 7.5 million kilowatt hours of consumption on its electricity bill every year. But for the last two years the company has been producing entirely on CO2-neutral electricity, i.e. from wind and solar supplies. In addition to green electricity, the entire Zinkpower Group has also made a major green shift by exclusively sourcing zinc that is also produced with green electricity and therefore does not affect the earth's environment through CO2 emissions. This zinc is also particularly low-carbon. The company has calculated that the entire effort saves 7,000 tonnes of emissions per year in Denmark.

Initially, the customers were only positive towards the green measures. But the extra expense is also made visible to customers. Zinkpower places an energy and environmental surcharge on all its invoices of 12%, saying that "it must be clear to customers that a sustainable industry comes with an expense. We maintain competitiveness with knowledge and development from our many factories. This helps to lower basic costs and thereby maintain competitive prices. We continue to run a healthy business here in Denmark following our green initiatives," according to Regional Director, Niclas Adelsparre.

Tekniq

International technology company Wärtsilä joins ABB's energy efficiency campaign

The Energy Efficiency Campaign launched by ABB brings together an ecosystem whose goal is to accelerate actions aimed at reducing energy consumption and CO2 emissions. Wärtsilä, a provider of innovative technologies and lifecycle solutions for the maritime and energy markets, has joined the initiative.

Press Release 

What we’re reading

• European gas slumps below €100 for first time since Russia cut supplies (Financial Times)

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