Swedish government denies 13 offshore wind permits over defense concerns

The Swedish government cited security concerns in denying permits to 13 offshore wind farms in the Baltic Sea with a total of 30 GW of potential capacity, it said Nov. 4.

The projects affected are Erik Segersall, Pleione, Arkona, Dyning, Skidbladner, Triton, Skane, Neptunus, the Baltic Offshore Beta and Delta North wind farms planned by Statkraft, Aurora by OX2, Sodra Victoria by RWE and Cirrus by Freja Offshore.

The projects are in the southern half of Sweden in power price zones SE3 and SE4, and mostly off the eastern coast of the country.

Several projects were near the Russian Baltic Sea enclave Kaliningrad.

The government said that offshore wind farms harm the army's defensive capabilities, with no current technological solutions at hand.

Specifically, missile attacks could take twice as long to detect and ward off with wind farms blocking the radar signals, it added.

Sweden joined NATO earlier this year and the Swedish army's head of infrastructure in late October spoke of a return to cold war in the region, with military readiness growing in importance.

Meanwhile, the Poseidon floating wind farm project, majority-owned by Vattenfall, was given the green light by the government.

Construction on the projct, to be made up of 81 turbines, is expected to start in 2029.

The project is located off the west coast of Sweden, near Gothenburg.

It will produce up to 5.5 TWh per year in the SE3 power price zone, which encompasses Stockholm.

Swedish offshore wind developers were surprised by the rejection notice for the other porjects.

"It is problematic that the government fundamentally closes an entire area for potential power generation without a proper assessment," the Swedish Wind Energy Association said Nov. 4.

The decision raises questions about Sweden's energy transition and future competitiveness, the trade group said.

"There are several ongoing projects within NATO to handle the problems which the government and army are raising."

"We fully understand the valid concerns from the armed forces and the Swedish government," Orsted CEO Mads Nipper said on an earnings call Nov. 5.

The company had been developing the Skane wind farm in the south of Sweden.

Previous work with the Danish and German armed forces had shown that solutions are possible, Nipper said.

The company will now review its broader portfolio in Sweden in light of the decision, the CEO added.

"Sweden is in great need of increased electricity production. The government's announcement only makes it even more urgent that projects planned on the west coast... come to fruition. Every day that goes by without electricity production being resolved means the risk of lost jobs and that industrial investments go to countries other than Sweden," said Asa Dyberg, operations manager at Freja Offshore.

Ten more offshore wind farms are being assessed by the government.

They are planned along the west coast and in the northern Baltic Sea between Sweden and Finland.

S&P Global Commodity Insights reporter Camilla Naschert produces content for distribution on Capital IQ Pro.