Sweden

Sweden

Controversy in Sweden over unofficial permitting 'tax'

Local governments using veto to demand share of wind farm revenues

Offshore wind developers planning projects in Swedish waters run the risk of having to pay an unofficial tax to local governments that have the power to veto their wind farms, a media investigation has concluded.

Veto powers over new wind energy developments were awarded in 2009 to county and municipal governments. Since then, many authorities have begun to charge a so-called "construction fee" or "rural allowance" in return for environmental approval of projects, Sweden's public service radio programme, Kaliber, has discovered. Fees appear to range from 0.5-1.0% of a wind farm's gross operating revenue.

No new offshore wind capacity in Swedish waters has been permitted since these local fees have become widespread, but all future offshore concessions are expected to fall within the coastal waters of a county permitting authority and, thus, potentially be subject to such a charge.

Opinions about the local fees vary amongst wind energy players interviewed by Kaliber. Some denounce the charges as "extortion", while others view them as an acceptable tax on access to an area's wind resource.

Speaking with Windpower Offshore, Maria Stenkvist, programme manager at the Swedish Energy Agency (SEA), said: "It is acceptable for local governments to seek financial compensation from wind developers, but a decision to veto a specific wind energy project should not be tied to monetary compensation".

A veto was given to local authorities via a last-minute clause added to a 2009 regulatory reform. The following year, the SEA recommended that local veto powers be reconsidered, but Sweden's national government has not acted on this suggestion. "There is apparently no political will to take up the issue," said Stenkvist.

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