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Green electricity

Sweden sees red over Google and Ikea’s Green Goals

According to Bloomberg the quest to supply everything from data server halls, insurance companies to large furniture stores with green electricity has flooded the Nordic region with wind power and crashed a $100 million renewable-certificates market.

While that’s good for the environment and the image of companies from Google Inc. to  Ikea Group, the growth in renewable energy has been faster than Sweden and Norway expected. That’s pushed certificate prices down 45 percent this year, undermining the incentive to invest in new wind power projects. It’s a case of too much, too soon for the Swedish Energy Agency, the market regulator, which never really planned for expansion at this rate. Taking into account a typical wind turbine’s life of about 20 years, its preference was always for a major build-out by the end of next decade, just before state-owned utility Vattenfall AB starts to close six 1980s-era nuclear reactors. With renewable capacity needed to meet a 2020 target either already in place or under construction, every additional investment will just add to a surplus, according to Nena AS, an industry consultant in Oslo.

“It’s like watching a python dying from starvation after devouring a pig that is too large for it to digest”, said Fredrik Bodecker, chairman of Bodecker Partners AB, an energy markets adviser in Malmo, Sweden. By way of comparison, Germany had a total of 4,308 wind turbines with a nominal output of 46,247 MW at the end of 2015, while 865 power plants with 5,410 MW were installed in Sweden.

Power Glut

Sweden and Norway plan to add 28.4 terawatt-hours of renewable generation by 2020, or enough to meet 10 percent of their joint annual power demand. In the renewable-certificates market, green energy producers receive securities that suppliers must buy to match customer demand. The surge in capacity hasn’t been met by increases in consumption, hence the surplus and plunging prices.Google, which operates a data server hall in Finland, has signed at least six deals in the past two years to buy power at a fixed price directly from wind parks in Sweden and Norway. The company didn’t respond to a request for comment.
“There is just such an insane amount of wind power projects that should not really be built”, said Joachim Jernas, a senior analyst at Nena. “During 2016, decisions to build 7.1 terawatt-hours of wind power in Norway and Sweden were made.”

 - Ikea finally generates enough to supply its 20 department stores with green energy.
Ikea finally generates enough to supply its 20 department stores with green energy.
Foto: pixaby

Green Ikea

After spending an undisclosed sum on 46 wind-power plants in Sweden between 2011 and 2015, Ikea now generates enough to supply its 20 department stores with green electricity. There are no plans for further expansion in the Nordic region, according to Jonas Carlehed, a sustainability manager at the retailer. While Norway has decided to phase out its involvement in the certificate system by 2020, Sweden is extending its participation for 10 years and will add another 18 terawatt-hours of renewable generation by 2030. The additional capacity will further expand a regional glut as investors have pledged to build at least three new wind farms in Norway able to generate 3 terawatt-hours a year, according to Nena. A terawatt-hour can supply 200,000 homes for a year.
To slow down wind power development after 2020, the Swedish Energy Agency proposes to keep subsidy levels low until the end of the next decade by adjusting demand in the system, said Roger Ostberg, an analyst at the regulator. Such a plan could discourage investors seeking stable, long-term returns, according to Paul Stormoen, the managing director of OX2’s wind power development.
”It is not just something you can switch off and on, there is a long process behind every investment” Stormoen said.

Interview with Puneet Trehan, Materials Innovation Leader, IKEA

It can not be denied that consumer and industrial brands are increasingly critical to the dynamics of, and commercial opportunities within the bio-economy at large. To find out what drives Ikea’s bio-based strategy, how they overcome prominent challenges and how they expect to continue with bio-based activities, World Bio Markets (WBM) recently caught up with Puneet Trehan, Materials Innovation Leader at IKEA and one of the speakers at World Bio Markets 2017. Here's what he had to say.

IKEA have been something of a pioneer in the pursuit of bio-based alternatives to fossil-based material, what drives this strategy?

For IKEA, every strategy & everything that we do, is driven from our simple vision ”A better Everyday Life for the Many People” as a starting point. Then if we look ahead,

- Will sustainable products be creating a better everyday life for our millions of customers?
- Will circularity as an approach create more resource efficiency?
- Do we need to take our responsibility in consuming resources in a more efficient manner especially focusing more on renewable resources?

The answer to all these questions is a big YES. And hence the focus on bio based agenda since we are convinced that as a down-stream responsible player, brand owner and retailer, we along with our strategic partners can make the difference!

What do you view as the key challenges to developing bio-based value chains and how have Ikea and its partners been successful in navigating these?

The key challenges that we have experienced so far:

- Really setting up the value chain which is built on “win – win “ for the partners involved
- Getting a customer / application development focus instead of only the technology focus
   from the beginning
- Value chain partners need to “really believe in the direction” and also that this is not a short term focus, rather a long term direction which will need perseverance and consistent

How do you expect consumer brands to evolve their bio-based strategy in the coming years, can wider uptake be realized?

We expect more and more brands to take up these initiatives as core part of their strategy, something which we believe will happen over the coming years. The question though is: what are the investments that the brands are willing to make to get this to fly, rather soar!

As a pioneering bio-based brand what would you most like to see from other parts of the value chain to help the commercialization of bio-based materials at scale? 

- Align to the same goal where the end consumers on a mass scale are the main beneficiaries
- Have long term directions and not short term capitalization approach

Source: Bloomberg & World Bio Markets
(Maria Dahl)

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3 Kommentare zu "Sweden sees red over Google and Ikea’s Green Goals "

  1. Todd Millions - 15.02.2017, 22:35 Uhr (Kommentar melden)

    The questions would be- 1-Why not shut down the Nuclear plants earlier than planned? The workforce could be shifted to the clean up efforts. 2-Extra capacity-Why couldn't the output be wired east to save the Finns from their Nuclear plans & follies? If they don't want the capacity-I'm sure the residents of Petrograd,would be thrilled for an early Nuclear shut down option.As well as the wiring to shift wind generation back and forth over a worthwhile(from the point of availability view)distance as they install their own turbines. 3- If Ikea is serious about increasing- Bio options,Sask Power claims that their Large scale solar "ass-perations" are stymied by a lack of -"corporate partners". Since the only partners those inbred A holes find acceptable,are the worst of the Nuc & tar mafias(Tepco et al & EDF!)- The large roof areas of their stores,warehousing centers and allied suppliers-Would seem ideal sites for such Solar array deployments.They could even offer packages for other large flat roofed buildings,already grid connected and in the prime market area. If they don't forget the Allen Key. PS-Glad you are back.I was worried.Where is the translate setting?Cheers.

  2. Sonny Domestos - 12.02.2017, 15:25 Uhr (Kommentar melden)

    Absolutely right, what a strange discussion. Both countrys have only very few wind turbines.

  3. onesecond - 11.02.2017, 12:34 Uhr (Kommentar melden)

    Then they have to raise their renewable targets instead of complaining. Sweden and Norway are far away from using 100% renewable energy for all their sectors, so until then they should add renewables. It is a no-brainer really.

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