Criticism mounts as Sweden axes 32 GW offshore wind

At the start of November, the Swedish government announced that it was vetoing plans for 13 offshore wind farms in the Baltic Sea due to security concerns. The announcement was met with much criticism from developers and lobby groups who felt blindsided by the cancellations and concerned about what this decision suggests about Sweden’s future energy priorities.

In this episode, Richard speaks to WindEurope about their fears regarding Sweden’s decision and discusses the nuances of Sweden’s Ministry of Defence with Defence Consultant and former Swedish Army Lieutenant Colonel. 

Host: Richard Sverrisson – Editor-in-Chief, Montel

Guests: Giles Dickson – CEO, WindEurope; Tobhias Wikstrom – CEO, Parachute Consulting; Anton Tigerstedt – Editor Sweden, Montel News

Editor: Bled Maliqi

Transcript

Richard Sverrisson – Editor-in-Chief, Montel: 0:06

Hello listeners and welcome to the Montel Weekly podcast where we bring you the latest news issues and changes happening in the energy sector. Last week, the Swedish government announced that it was Vitone plans for 13 offshore wind farms in the Baltic Sea citing security concerns. Ørsted, OX2 and Eolus were among those developers whose projects were rejected. Earlier I spoke to Emelie Zakrisson, who's head of offshore wind. At OX2 offshore wind developer.

Emelie Zakrisson - Head of Offshore Wind, OX2: 0:38

I think we were all caught with a quite big surprise last Monday when the government announced the rejection of 13 applications. We did know the armed forces were a bit reluctant to offshore wind in the Baltics Sea, but seeing there was a full stop on so many projects in such a big area came. As a big shock not only to the the industry, but also politicians and and local communities and also the manufacturing industry in Southern Sweden. I mean, needless to say, we spent a lot of money together with our partner, Inc. Investments on these projects with's, tens of millions of Euros. That have been put into our four projects that were rejected. The political risk is quite high in Sweden now. It's a bit unclear for a lot of us what way we are heading. I think the investors are looking in Sweden and with the, a high political risk current. Yes.

Richard Sverrisson – Editor-in-Chief, Montel: 1:26

The announcements triggered a lot of criticism. One of the many voices that expressed dismay was the former head of the Swedish TSO Svenska Kraftnät, but also WindEurope, who's CEO We are gonna be speaking to shortly alongside a defense and energy consultant. But first of all, I'm joined by our Swedish editor, Anton Tigerstedt. A warm welcome to you, Anton. Could you tell us a bit more about the Swedish government announcement and what the initial reaction has been?

Anton Tigerstedt – Editor Sweden, Montel News: 1:57

Yeah, I think you can say that the, this decision that it has come a little of a shock for the wind power industry. They said that the country looks to find ways to solve the issues and provide the suspicions details in the politics even with offshore wind. And we are also seeing some criticism being pointed out that the government and the Swedish defense were not already in the earlier state being more clear that offshore wind was out to the question in this area. The industry has until now put a lot of effort, time, and money to develop these projects and they have now been stopped.

Richard Sverrisson – Editor-in-Chief, Montel: 2:32

No, it's absolutely very crucial. And Sweden, of course, recently joined nato, which is another factor in the picture here. But, you know, Sweden has seen a lot of cancel projects. So we had green steel, hydrogen batteries. What were the set. Back for offshore wind mean for Sweden when it comes to meeting the expected, increased power demand in the region due to the energy transition Anton.

Anton Tigerstedt – Editor Sweden, Montel News: 2:56

Yeah, that is an interesting question and I think the answer is not very clear because in short term I don't think it will mean very much swish and net exporter of power and has a strong power balance and low power price prices compared to other radiance in Europe. And moreover, we have not seen investment decision in offshore wind in Sweden, in any of the few protests that have already got the approval. So for instance, Wattenfall Post it's approved project in Craig stock as it's not profitable to build without state support, they said, and if you look in a midterm perspective, the power demand in Sweden is forecast to increase a lot towards 2030 due to this green transition. And offshore wind has been seen as a key source to cover this increase in the late twenties and early thirties. However, only this year we have seen a lot of those green transition industry projects being downscaled or postponed or even scrap. So if this trend continues it might be enough to build offshore products that has already been approved in other parts of the sea. Combine with some onshore and solar projects. However, if the plants until early thirties expand, once again, I do not think it can be done without offshore wind. And if you look a bit further route, it's also a bit unclear. The Swedish government is very keen on build nuclear reactors from the mid such and onwards in Sweden, and they're planning to launch a huge support team to make this happen. So it's not impossible that Sweden goes for nuclear instead of show wind. However, this is also very much open the course as the opposition parties in the Sweden are more keen to build offshore wind rather than nuclear as they believe. A quick and less costly way to expand the system.

Richard Sverrisson – Editor-in-Chief, Montel: 4:53

In short, quite a blow for the energy transition in Sweden, Anton, and and it could potentially lead to some form of a supply crunch. But thanks very much, Anton. I'm pleased to be joined from COP 29 in Azerbaijan by Giles Dickson, CEO of WindEurope, the association that advocates for wind energy in Europe. A warm welcome to Giles.

Giles Dickson – CEO, WindEurope: 5:13

Thank you very much.

Richard Sverrisson – Editor-in-Chief, Montel: 5:14

I'm also joined by former Lieutenant Colonel, defense Consultant and CEO of Parachute Consulting Tobhias Wikstrøm, a warm welcome to you, Tobhias.

Tobhias Wikstrom – CEO, Parachute Consulting: 5:23

Thank you very much. Happy to be here.

Richard Sverrisson – Editor-in-Chief, Montel: 5:25

Giles, I'd like to start with you. Now, what is, or what was your response to the announcement by the Swedish government last week?

Giles Dickson – CEO, WindEurope: 5:34

We were extremely disappointed. Sweden has for quite a long time, been at the back of the class. In Europe when it comes to offshore wind, Sweden only has 200 megawatts despite having a very long coastline and excellent wind conditions. You compare that to Denmark next door, smaller country, which has 2.6 gigawatts. Yep. All the other countries, the other seven countries around the Baltic Sea are looking to develop offshore wind. They are making very good progress, and Sweden is not. It stands out and it has stood out for a long time as the country that is not progressing, no form of government support for offshore wind. And last week's decision was consistent with that, but it was actually even worse. The Swedish Air Force to be us will give us more insights on them shortly. I have for many years been blocking offshore wind farms, but last week's decision was. Significant in its size and scale. I mean, it was about 32 gigawatts of offshore wind projects, which have been under development for some time now, which suddenly overnight. I told, well, sorry. You cannot Go ahead. Yeah. And we were especially disappointed because we are not convinced in wind Europe that the military factors significant, though they may be perceived to be by the Swedish Air Force, are in fact the main reason why the Swedish government has decided to cancel these projects. I mean, it's quite well known that the current Swedish government is propped up by the Sweden Democrats. The far right party, they do not like wind energy at all, and they are not allowing the current Swedish government to offer support for the build out of offshore wind and maybe the military factor whilst the Swedish Air Force suddenly does have concerns. Maybe that was in some ways the convenient excuse for the Swedish government, but then when they justify the decision on those grounds, that sends a very negative signal to other countries. Other countries where the military have been collaborating very constructively, wholeheartedly with the government and the wind industry and the build out of offshore wind who suddenly see this message from government, oh no, we can't do offshore wind for military reasons. And they scratch their heads and think, well, hold on, we're doing it. And the military say it's okay. Yeah. And governments have been approaching us in wind Europe saying, hold on, what's going on here? Are we doing the right thing? We've been having to reassure them that they are doing the right thing. But it's unhelpful when one government comes out with this as what is essentially the excuse and sends a very negative signal to other governments about the co-existence between offshore wind and military activity. And we are firmly of the view, as is every other country in Europe. That, yes, the two are totally incompatible. In fact, they are mutually reinforcing and are helping each other.

Richard Sverrisson – Editor-in-Chief, Montel: 8:52

Thanks, Giles. That was a very clear response there, but what do you say to that Tobhias, is there something else behind the Swedish government decision, or do you think the sort of anti win feeling within the government as well as the opposition from the Air Force? What do you say to what the Giles was commenting on him?

Tobhias Wikstrom – CEO, Parachute Consulting: 9:08

It's hard for me to elaborate on that one but what I can elaborate on and to give you some background and context where Sweden is right now no matter if you look at wind or nuclear or what power source you have a look at, you have a country that joined NA for less than a year ago. We have a long tradition in Sweden with a permit process and an environmental law that gives the defense a very strong saying. And nowadays you need to look a little bit broader. You need to look a little bit wider, but it takes time to change that process and especially when you have the war going on in Ukraine. Of course the military will gets more attention, but I think, so in the short term, I'm not that surprised that this decision came but I would say in the long term as Sweden get deeper, inform, map, and learns more about the collaborators going on and also starts common view in Sweden is that nature as a military organization. And as we become wiser and start learning more about the civil critical requirement that NA puts in all their allies. That's the energy resilience. It's it's ranked quite high and, but I don't think that effect has really struck. Sweden yet, as we still look at the trends right now in the situation in Europe, which is, it's horrifying. But we, as we start looking wider and more long term perspective, I do think that we'll start seeing the energy as a very critical factor for dealing with the ongoing security situation. Around long answer but I think we, we have a background. We're new in nato, we're learning and we will keep on looking at how other countries reason and why they're doing that. And and it's, this change will not come overnight but eventually I think it will start regarding not only renewable energy, but all kinds of energy as a key factor for functional society in time zone. Not only in war, but in times of crisis as well.

Richard Sverrisson – Editor-in-Chief, Montel: 11:05

But you said the decision didn't take you by surprise Tobhias.

Tobhias Wikstrom – CEO, Parachute Consulting: 11:09

The magnitude to some extent yes was of a big map that, that there was now blocked, but at the same time with the reasons they put forward. That is clearly strictly military reasons and we have contact in Ukraine right now. But what what I think eventually will happen is because what's also happening in Sweden is that we're putting a lot of effort on the civil defense. And the civil defense will definitely need the energy in times of crisis and in times of war. So I think when they match up the, like I said the old inheritance with a strong military saying when that meets the critical requirements of civil society in times of war, in times of, I think we will have a little bit other view on how we regard resilience energy supply.

Richard Sverrisson – Editor-in-Chief, Montel: 11:52

That's interesting. I would like to return to that if I may, Tobhias. But in the meantime, Giles, do you think the situation mishandled by the Swedish government, were you surprised by the manner in which it was announced?

Giles Dickson – CEO, WindEurope: 12:04

Yes, we were surprised at the. Volumes covered the suddenness of the decision. It would seem that the Swedish authorities had not communicated this in advance to their NATO allies. If they had done, we would not have been receiving the inquiries that we were getting when the announcement was made from other. Governments around the Baltic Sea. It is, we would not want to undermine in any way the concerns that the Swedish military authorities in the Swedish Air Force in particular may have on these issues. And I agree with everything that Tobhias has said on that. As to be, as has said, there's a learning process and other governments and other defense ministries and military authorities, not just around the Baltic Sea, but around Europe have done that learning and they've seen that offshore wind is totally compatible with national security. In fact, it can be good for national security. If you take the example of Belgium now. The wind farms are installing military antennae on the turbines at sea. There's a very strong collaboration between the Belgian Navy and Air Force and the offshore wind farm developers and similar collaboration. Is emerging in other countries in Poland. The military are working very closely with the offshore wind farm developers. Sweden is still immature in this respect but the learning will come and one has to hope that in a few years time. A different view will be taken.

Richard Sverrisson – Editor-in-Chief, Montel: 13:58

Yep. Maybe as Tobhias has mentioned the pendulum may swing back in a few years time when there's an understanding of how energy infrastructure and defense can interact. But Tobhias, there have been other projects approved. So what is the, so the main issue of concern is this area of the Baltic that stretches right down to the Danish Island of Bullhorn. But you know, that doesn't seem a problem for the Dane so much when they're planning offshore wind parks in the region. Why is Sweden so concerned?

Tobhias Wikstrom – CEO, Parachute Consulting: 14:27

Yeah. That was the only part that surprised me a little bit. The banning of the wind farms west of, because if we was, once again, go back to the, and look at the history when Sweden was was free of and neutral, we had to protect our borders all the way around. It was, didn't matter, it was east, west, north, or south. We had to, for our in our security policy we were expecting the. Any directions. But nowadays it's clearly stated that Russia is the enemy. It's clearly stated that the gulf of finished base is is what's of main. So a little bit surprised if you look at the map on west of B where you have will have. Quite large offshore wind farm from Denmark, from Germany, from Poland, where you'll have to deal with what comes with that sensors or for exercise or for operations. And I don't really see that area would be the best. Position to look into ka, which was the government put on the table as a reason. I think there's little, they took an easy way of drawing the map. That maybe that's one of the parts that you'll have to look into deeper and reanalyze and further look at what can be done and how could it be done. Especially in collaboration with Denmark and Germany and Poland, and see what we can do together. Because it would be strange if all the countries in that region builds, but not Sweden. That surprised a little bit. Yes.

Giles Dickson – CEO, WindEurope: 15:58

And look at the map of the Baltic Sea and look at where Poland are developing their offshore wind farms. It ain't so far from Kaliningrad. Yeah. Look at where Lithuania are developing theirs. Estonia, Finland. You know these are countries that are closer to the NATO frontline than Sweden is. They are progressing with the advancement of offshore wind with the full support of their military authorities.

Richard Sverrisson – Editor-in-Chief, Montel: 16:20

Absolutely. That's, Tobhias, that brings me onto my next question as well. Maybe we'd like to respond to Giles in addition, but. You know, what are the chief military concerns here? Is it about the radar systems? Is it about the grid infrastructure? Is it about the turbines that, you know, that suddenly there, if there's a strike on a on a facility, it could bring down the whole power system. What are the chief concerns? Were they talked about in this announcement at all? Were they detailed out in any manner?

Tobhias Wikstrom – CEO, Parachute Consulting: 16:47

Yeah, they talked about radar, talked about early warning from theile launches, from Ka guard. And of course I have the biggest understanding for that. But just like guy says, it's, we have allies closer to that area. We're now working in a network and close cooperation we with those allies. But once again, if we back down to the military issue. That's what they wanna maintain. But what I think countries me are into bigger and this. Energy is a key factor to keeping the country together and also supporting the troops. I think they have come probably a little bit further in looking into those civil requirements and not only the military requirements. And when you add those together, you might end up in the same conclusion. The Swedish government. Conclusion like Lithuania and Poland. So it's it's bringing as many aspects into the same analysis at the same time. At the same time, you need to look at it outta what time perspective is it today or is it 10 years or 20 years? One, one special risk that I see is that if you make the decision outta how the world looks today. When you know you have transition in energy, you have electrification of society, the electricity demand is not gonna go down probably the year 2035. We're gonna need more energy and this. These wind farms take some time to build. So you really need to look into all different aspects and not only the military one, but the civilian ones that will have an impact on our military forces.

Richard Sverrisson – Editor-in-Chief, Montel: 18:30

Increasing energy independence is also a way of increasing civil resilience because you're not dependence on, on any foreign energy.

Tobhias Wikstrom – CEO, Parachute Consulting: 18:39

Absolutely. But that's not up to the military to look into that. That's the energy authority and what need. Bits and pieces into analysis and bringing more authorities in here that need to have their saying about how this will have an impact on their ways of especially dealing with the hybrid warfare because we're up now for a possible war, which is terrifying, but in the meantime, we're fighting hybrid. Where many authorities are part of it. And those authorities will need to make stronger and the resilient energy supply is one way of making them stronger.

Richard Sverrisson – Editor-in-Chief, Montel: 19:12

Giles, have you heard similar arguments being put in other Baltic nations? You mentioned Poland, Lithuania. Denmark, Germany even, are they making the same arguments or similar at all, or are they, how are they dealing with these clear threats or military issues?

Giles Dickson – CEO, WindEurope: 19:32

Look, since wind energy started in Europe, we have had to manage the interference with radar systems, both with military and civil aviation. Authorities and it's a fact of life. You build a wind farm too close to a radar installation and you may distort the operation of that installation. Therefore, in every country, there are minimum distance rules. How close to a radar installation where military or civil, you can build a wind farm, whether it's onshore or offshore. Fine. We've always lived with that. Over time, those minimum distance rules have become shorter because the technology, notably the radar technology has evolved. You know how infill radar and the radar systems are able to identify the wind farms better? They are less distorting than they used to be, but you still need to have some basic minimum distance requirements. The wind industry, both onshore and offshore, has learned to live with that. And that's absolutely fine. When the Swedish military suddenly come out and say, oof, there are these terrible issues around radar, it's not credible because we've learned how to live with that. Yeah. And it works okay in every other. Country. There have been issues and the Swedish Air Force has in the past talked about this with low altitude training, low altitude flying. Okay, fine. Does the Swedish Air Force do low altitude flying for the whole length of the Swedish Baltic coastline? And I don't know. Tobias, you are the expert on that seems a little exaggerated from a layman's perspective, but still, again, other countries don't have. These issues. One angle we haven't talked about yet is the security threat, both the physical and the cybersecurity threats to offshore energy infrastructure. And these are very real, but again, we are managing these and it's very good that NATO has now set up an operational cell headquartered at an IF base in London whereby. Satellite surveillance images. Are shared between the 32 NATO countries. And if a Russian fishing vessel is identified being stationary for longer than it should be in a position in the North Sea where it is known, there are subsea cables underneath. Then. A NATO asset is mobilized if there is one nearby. And the vessel is hopefully escorted out of the relevant waters. And this has been operational for just under a year now and has had some operational effectiveness and impact already, and that is very good and it's excellent. And the wind industry is extremely appreciative of this. Military authorities are taking the threat. To our energy security. But so seriously both, the grid infrastructure, the sub grid infrastructure, and the offshore wind farms themselves,

Richard Sverrisson – Editor-in-Chief, Montel: 22:39

the vulnerability here, both from physical and also cyber attack, is that very real Tobhias and more, potentially more real than this, the reasoning of radar issues.

Tobhias Wikstrom – CEO, Parachute Consulting: 22:49

Yeah, I think it's both of it. But whatever you're afraid of. One way of mitigating it is building more. Instead of having one power plant, you need to have 10 or 20 or 100. The more you have the harder you make for an opponent to, to strike you. But the less you have, the weight you are. But also referring to what Ja was saying about the technical issues because there is a technical issue, but there's also conceptual issue and they both have an impact on each other. And like I said, we come from a history with free of alliances and being neutral, which have made us deal with this on our own in Sweden and which has also. Giving the mandate to the defense saying that, okay, we don't want to insure in these areas. So they, we have not been forced to even think about it that much, which also have not made us look into the technical solutions in the same way as some other countries have. So I think one thing will lead to another. And the third one that will have an impact is I'm gonna keep on coming back to that. The hybrid warfare is here right now. We are seeing how we are being affected by cyber attacks. There are massive mapping, critical infrastructure. And we need to take measures against that and that one way of doing that is building our resilient energy supply by building more. I'm not saying it needs to be offshore windfall, but building more and spreading them out. That's an old military way of dealing with it. And that I think will happen because it'll have an impact on civil society as well.

Richard Sverrisson – Editor-in-Chief, Montel: 24:13

Yep. Absolutely. Tobhias, and I think it's very clear. But then the Swedish government has opted for new nuclear. Is that, that's is that any less of a security risk?'cause obviously these are big units centralized units, whereas offshore wind or wind generally is very much decentralized.

Tobhias Wikstrom – CEO, Parachute Consulting: 24:29

A absolutely but like I said having a mix or having many of, many things it's good. So I don't think the solution is only having wind or only having nuclear, and I don't think that's what the government is leaning this either. So having bits and pieces of many things spread all around, it would make it very much harder for an opponent to have an impact on us.

Richard Sverrisson – Editor-in-Chief, Montel: 24:48

Giles, are you concerned that other countries may follow suit? I mean, if you see governments changing color, you mentioned the anti wind elements in the Swedish government and certainly in governments across Europe, you know that change regularly. Some are pro, some are anti, some are pro nuclear. It's almost become a quite a political hot potato. Are you concerned that others may follow suit and use this as a, not as an excuse, but as a reason not to roll out offshore wind?

Giles Dickson – CEO, WindEurope: 25:16

We are concerned that some governments will worry unnecessarily about the compatibility of offshore wind with military activity, but we will manage that and we're managing that already. As I say, since the announcement by the Swedish government two weeks ago, we've been talking closely to other governments around the Baltic Sea and reassuring them. Will other governments look at this and say, maybe this is a reason not to do offshore. When will changes of government lead to a change of direction in policy? We are, as things stand, not so concerned about that there is strong political consensus among all mainstream parties. In European countries that we need more onshore wind. We need more offshore wind. This time last year, 26 out of 27 EU member states signed a document called the European Charter, committing themselves to the massive expansion of wind energy and to take the necessary measures to support that expansion of wind. The Swedish government, by the way signed that charter as well. The only government that did not was Hungary. Hungary doesn't actually have much, if any, wind energy. So the consensus is there. Take the example of Germany, which may be heading for a change of government. Now the tid would say a through opposition part is strongly support the build out of offshore wind. Yeah. Okay. Even. Poland before the change of government. This time last year when peace were in power in Poland, the Peace Party was strongly supporting the build out of offshore wind in Poland. And now Donald Tusk's party supported, even more. And that's okay. Yeah. It's unfortunate that in Sweden. There is not a parliamentary majority among the mainstream right of center parties and the government is propped up arithmetically in the Parliament by the Sweden Democrats, which are dead against wind energy. Yeah. There's a risk of similar constellations coalitions forming elsewhere in Europe. Will that mean that in countries where that happens, the brakes are put on the build out of wind energy? Let's see. But for now, Sweden is really the odd country out here.

Richard Sverrisson – Editor-in-Chief, Montel: 28:08

Tobhias. Do you think offshore wind will make a comeback in Sweden?

Tobhias Wikstrom – CEO, Parachute Consulting: 28:13

I'm quite sure it will. Question is just when, because of the reason I was stated, we need the energy and resilience. We need to look at the hybrid water that's going on today and create the stronger civil society to talk to shore at the say in Sweden. And where energy, different energy sources spread all around our coast and may not in the country place, keep key role in doing so.

Richard Sverrisson – Editor-in-Chief, Montel: 28:38

Tobhias and Gi les, thank you very much for being guests on the Montel Weekly podcast. Your insights were fascinating and gave us a much greater understanding of the issues at hand here, both in Sweden and Europe. And Giles all the best at cop. I hope there, there's some important progress made there as well. And Tobhias, hope to see you again soon.