Researchers found 80% of Swedish wind power producers in the red

Losses ”accelerated” for Swedish wind power producers in 2024 despite a rise in generated power, shows research paper. ”The problem of intermittency is very real,” says researcher. 

In 2024, Swedish wind power producers lost at total of SEK 6.3bn – or around EUR 620m – while the sector’s profit margin fell to minus 51%.

This is the conclusion in a paper published this year by Christian Sandström, a former associate professor at Jönköping University, and economist Christian Steinbeck.

The two researchers analyzed the annual reports of 244 wind power producers owning just over 3,700 turbines in Sweden – covering 85% of the country’s total estimated annual generation – and found that 80% of them were effectively operating at a loss.

Despite wind power production rising from 34.2TWh in 2023 to 40.6TWh in 2024, the sector’s revenue fell for the first time in at least six years.

”The installed capacity kept increasing, but the turnover declined. That tells you a fair bit about the cannibalization that is going on,” Sandström elaborates to EnergyWatch.

That wind power producers in northern Sweden are losing money, partly due to the prevalence of low and negative power prices in the area, is well-known. Here, wind power producers lost a total of SEK 4.8bn in 2024, while the region’s profit margin lay at minus 83%.

At the same time, costs in the Swedish balancing market have increased dramatically, while a lack of grid expansion has made it hard to export power to more profitable markets in the south.

But Sandström and Steinbeck’s calculations show that the issue is not isolated to northern Sweden.

In Svealand and Götaland, losses among wind power producers amounted to SEK 1.5bn, while their average profit margin was at minus 26%. Close to half of southern Sweden’s wind power producers were operating at a loss in 2024, with 46%.

”There is currently an overcapacity of electricity production in Sweden,” sums up Sandström, pointing out that the country currently exports around the same amount of electricity as its wind farms produce in a year.

”Why anyone would want to build more wind under these circumstances is beyond my understanding,” he adds.

Delayed demand

The overflow of electricity especially in northern Sweden can partly be attributed to a range of heavy industrial projects which have either been abandoned, postponed, or gone bankrupt, the two researchers note.

In 2024, Swedish state-owned mining company LKAB announced it would postpone its transition to fossil-free iron ore in Kiruna, dampening the demand for renewable power in the region significantly.

The transition was expected to create demand for 50TWh by 2024, and 70TWh by 2050 – close to half of Sweden’s electricity consumption today. Or, as Sandström flatly notes:

”That’s pretty much the entire electricity consumption of Finland for one company. If you want to believe that’s realistic, you can of course do so. I don’t.”

Add to this battery company Northvolt’s collapse and green steel project Stegra which has just secured SEK 15bn in new capital after months of uncertainty about its future.

As a columnist at Swedish business media Affärsvärlden and author of several books on the topic, Sandström has followed these projects closely.

”They’re going to cannibalize”

With industrial power consumption’s rise remaining a mirage, many of Sweden’s wind power producers are now tied to loss-making investments.

”The over-establishment of wind in Sweden, especially in the north, has created the obvious dilemma that they’re all selling the same thing at the same time, when the wind blows.”

This has caused power prices to fall significantly and, more frequently, below zero.

”The amount of hours with negative electricity prices has just been growing,” Sandström says.

”That makes for a financial suicide, pretty much, for the entire industry.”

The researchers point to state-owned energy company Vattenfall’s wind power business losing EUR 870m in 2024 and 370m the year before.

In its annual report, one of Vattenfall’s subsidiaries owning wind power mostly in southern Sweden notes that 17% of its potential production was curtailed because shutting down turbines made more economic sense than feeding electricity onto the grid.

”If you build more, the only thing that’s going to happen is they’re going to cannibalize,” says Sandström.

The situation in northern Sweden has led to several bankruptcies, including for Sweden’s largest wind farm Markbygden 1 and the smaller Aldermyrberget. Both had suffered under unprofitable long-term power purchase agreements (PPAs).

Although only Markbygden 1 was responsible for losses of 1.7bn in 2024, Sandström and Steinbeck note that the profitability issues are clearly affecting the whole sector.