Trouble for Swedish wind power company after agreement with Hydro – E24

On Monday, Hydro Energi will appear in Umeå District Court after the Swedish renewable energy company Markbygden Ett has applied for reconstruction.

In 2017, Norwegian Hydro Energi and the Swedish wind power company Markbygden Ett entered into a long-term contract.

The Swedish company was to deliver 1.65 terawatt hours (TWh) annually from 2021 to 2039. The contract involved a fixed amount of electricity at a fixed price.

The contract has since proved to be less lucrative for the Swedish company: When the wind turbines cannot supply enough power, Markbygden must buy power on the open market, often at a much higher price than the one they get from Norsk Hydro, writes NTB.

Expenses exceed income

In 2022, Markbygden bought replacement power for 61.6 million euros, equivalent to 733 million kroner at today’s exchange rate.

The forecast for 2023 is that expenses will far exceed income. The turnover is expected to be 40 million euros with a loss of 52 million euros.

Markbygden Ett wants to terminate the agreement with Hydro, writes Dagens Industri.

The Markbygden wind farm in Norrbotten in the north of Sweden is the largest of its kind in Europe, with over 500 wind turbines. When the facility is fully developed in a few years, it should be able to produce ten terawatt hours (TWh) of electricity a year, writes Dagens Industri. In comparison, the annual consumption of electricity in Norway is between 130 and 140 TWh.

Markbygden Ett disposes of 179 of the wind turbines in the wind farm. The agreement with Hydro from 2017 is one of the reasons why the company is now applying for reconstruction.

Going to court

Dagens industri writes that Hydro should have opposed the reconstruction of the Swedish company.

Information manager at Hydro, Anders Vindegg, cannot confirm on Sunday evening that this is true.

– Markbygden Ett AB has entered into a restructuring process in Sweden and then you must seek to reach an agreement within the framework of such a process, says Vindegg.

He also says that Hydro will meet with its representatives in Umeå District Court on Monday.

– This is the part of the hearing that takes place on Monday. So we relate to the legal process.

Could be a problem

Markbygden Ett is 75 percent owned by China General Nuclear Power Group (CGN).

It is a Chinese state-owned company that invests in power generation around the world.

Since 2019, CGN has been sanctioned by the US after the US Department of Commerce believed the company was trying to obtain advanced US nuclear technology and material for military use in China.

The Chinese, for their part, thought this was only part of the trade war and an attempt to tarnish the Chinese economy.

Chinese wind farm investments in Sweden have previously raised concerns.

CGN is the owner of six new Swedish wind power projects that were granted a license between 2017 and 2023. This is shown by an overview from Svensk Vindenergi.

– When it comes to electricity production, it is not by definition a problem to increase ownership from abroad, but it can be, especially when we are talking about countries like China, said energy spokesman for the Moderates, Lars Hjälmered to Politico in 2021.