Large wind farm in crisis - applying for restructuring.
Dagens Industri|Jens Kärrman|November 11, 2023
The company, which is 75 percent owned by the Chinese state, has been making big losses for several years. ...Markbygden Ett writes to the Umeå district court that the payment difficulties are due to a very unprofitable electricity contract with the Norwegian company Hydro Energi. The agreement, according to Piteå-Tidningen, requires that the project owner sell a fixed volume of electricity at a fixed price for 19 years. When the wind farm does not produce enough electricity, the company must cover the deficit with its own purchases on the electricity market.
The company, which is 75 percent owned by the Chinese state, has been making big losses for several years. ...Markbygden Ett writes to the Umeå district court that the payment difficulties are due to a very unprofitable electricity contract with the Norwegian company Hydro Energi. The agreement, according to Piteå-Tidningen, requires that the project owner sell a fixed volume of electricity at a fixed price for 19 years. When the wind farm does not produce enough electricity, the company must cover the deficit with its own purchases on the electricity market.
Luleå -- One of Sweden's largest wind farms, Markbygden Ett, has applied for corporate restructuring.
The reason is that the company entered into a very unprofitable agreement to sell electricity to Norwegian Hydro Energi.
Markbygden is the largest land-based wind farm in Europe, with over 500 wind turbines. When the park is fully developed in a few years, it will produce around 10 terawatt hours of electricity per year.
Markbygden Ett, which operates 179 wind turbines, applied for restructuring on November 2.
The company, which is 75 percent owned by the Chinese state, has been incurring significant losses for several years. Now the situation is urgent.
On November 2, Markbygden Ett submitted an application for corporate restructuring to …
... more [truncated due to possible copyright]Luleå -- One of Sweden's largest wind farms, Markbygden Ett, has applied for corporate restructuring.
The reason is that the company entered into a very unprofitable agreement to sell electricity to Norwegian Hydro Energi.
Markbygden is the largest land-based wind farm in Europe, with over 500 wind turbines. When the park is fully developed in a few years, it will produce around 10 terawatt hours of electricity per year.
Markbygden Ett, which operates 179 wind turbines, applied for restructuring on November 2.
The company, which is 75 percent owned by the Chinese state, has been incurring significant losses for several years. Now the situation is urgent.
On November 2, Markbygden Ett submitted an application for corporate restructuring to the Umeå District Court. The payment difficulties, according to the application, are due the power purchase contract with the Norwegian company Hydro Energi. The agreement requires Markbygden Ett to sell a fixed volume of electricity at a fixed price for 19 years. When the wind farm does not produce enough electricity to meet the contract obligation, the company must cover the shortfall with its own purchases on the electricity market.
What has happened in the last year is that Markbygden Ett has been forced to buy electricity at extremely high prices when its own wind turbines have been idle. The company has since sold the electricity to Hydro Energi at a fixed price, which was much lower.
In order to meet Markbygden Ett's commitments to Hydro Energi, all income in the company has gone to buy replacement electricity. During 2022, Markbygden bought Ett replacement electricity for 61.6 million euros, corresponding to 717 million kroner calculated at today's exchange rate.
The forecast for 2023 is that expenses will far exceed income. The turnover is expected to be EUR 40 million with a loss of EUR 52 million.
Markbygden Ett wants to terminate the agreement with Hydro Energi and during the reconstruction the company wants to sell electricity on the open market. The company has around SEK 6 billion in debt.
Hydro Energi has opposed the decision on corporate restructuring.
Translation into English assisted using Google translate.