The money is gone with the wind

[Hoodat]

The money is gone with the wind

We are at the beginning of a wave of bankruptcies in the wind power industry, write economists Christian Sandström and Christian Steinbeck. An analysis of the wind power companies' annual reports reveals significant financial problems. The total loss for the years 2017–2022 amounted to SEK 13.5 billion, which meant a loss margin of 39 per cent.

CHRISTIAN SANDSTRÖM AND CHRISTIAN STEINBECK  |  28 FEBRUARY 2024

The nuclear power shutdowns and wind power expansion over the past 15 years can be said to be an example of large-scale industrial policy in the form of a "green deal" in which the state points out a direction for social transformation. This industrial policy renaissance needs to be scrutinized, and a week ago the book Moonshots and the new industrial policy (Springer international 2024) was launched, in which 23 researchers from different parts of the world scrutinize the return of industrial policy.

Almost a year ago, we began such a review when we wrote in Kvartal about the profitability of Swedish wind power. In the article Wind power – green bubble or black hole? We presented data that pointed to profitability problems in the sector – despite the fact that wind power has received significant support in the form of both electricity certificates and that it does not have to bear costs that are created in the form of, for example, balancing the electricity system or reduced property values in the vicinity of the facilities.

Since then, many of our fears have come true. Sweden's and Europe's largest wind farm, Markbygden Ett (179 wind turbines), outside Piteå, applied for reconstruction in October 2023. As Markbygden has been a prestige project for both the sector and leading Swedish politicians, this is remarkable and should give food for thought. Several other Chinese-owned plants have also been reported as more or less bankrupt.

The wind power company Aldermyrberget outside Skellefteå was also put into reconstruction in December 2023, just over a year after the facility was inaugurated.

If Swedish wind power is running at large losses, this is important information, both for the industry's players as well as for politicians, investors and representatives of the business community.  .  .  .

https://kvartal.se/artiklar/pengarna-borta-med-vinden/

[Smokin Joe]

Solyndra, with air movement.

[Hoodat]

Profitability of the wind power industry 2017–2022
In total, the 167 wind farms we examined produced and sold electricity for SEK 34.4 billion. However, the costs amount to SEK 47.9 billion, which means that the industry makes a total loss of SEK 13.5 billion during these years. This translates into an average loss margin of 39.2 percent. In no single year has the industry as a whole made a profit.


Wind Farm Performance (in billions of Swedish Krona)



Blue bar - Net Turnover
Red bar - Costs

The losses are simply due to the fact that, despite extensive subsidies, the industry is unable to produce electricity at a cost below market price. Despite these figures, which would cause any other industry to shut down, the rate of investment has been very high. The book value has risen from SEK 32 billion to SEK 102 billion in 2017–2022.