My interest in wind power began almost six years ago when Thomas von Otter and I started what is now O2. Our venture was based on a concept that expanding renewable energy is essential for a future that is sustainable in the long term. The fact that it’s a profitable business with great potential is also attractive from a commercial perspective. Wind power is entering the biggest growth period in its history–globally and in Sweden.
Land-based wind power is a renewable energy source and one of the less expensive alternatives for new wind power plant construction.
At O2 we want to drive, renew and create good business just as the energy sector is facing a necessary shift to renewable energy sources.
The Company’s history, is consideraby long – our Wind park development celebrate its 20th anniversary next year and we have a significant portion of the most attractive wind locations in Sweden. We realised early on that it’s important to understand the concerns of the people whose immediate surroundings are changed when wind power comes into the picture. We offer our neighbours the opportunity to be shareholders by owing “wind shares” and we sell whole plants to municipalities and large electricity consumer.
O2 has developed and built one fifth of all wind power plants in Sweden. We are the biggest electricity producer and owner of land-based wind power with the ambitious goal of accounting for a substantial portion of the wind power to be built over the next few years.
Growing market
With its long coastlines, mountainous and sparsely populated areas, Sweden is one of the European countries with the best conditions for wind power. Today wind power production in Sweden amounts to 3.0 TWh per year. Climate goals and political ambitions as well as the Swedish Parliament’s planning goals and numerous forecasts point to an expansion in wind power up to 12–15 TWh by 2020.
Sweden has a market-based green certificate system with broad political support from both the governing Alliance and the Opposition. Since demand is essentially fixed by law, the allowance price (i.e. the electricity price plus the green certificate price) represents a level where investors and lenders are motivated. The electricity prices are set according to a margin where the most expensive production determines the price. Wind power in general has low production costs and O2 has efficient production facilities, which means there is potential for good profitability.
Ambitious growth goal helps the environment
We have an ambitious growth goal: By the end of 2015, O2 intends to be operating or will have started construction on wind power equivalent to 1,000 MW (around 400–500 wind power plants). Today we already have a project portfolio representing wind power plants with an effect of 2,000 MW in good conditions. If we achieve our goal we will have created 3 TWh of renewable electricity, which is equivalent to around 25 percent of the wind power that is expected to be operating in 2020.
The renewable energy sector is far more exciting and commercially attractive than I ever imagined. We intend to be a leading player in wind power in Sweden. This will not only require a pioneering spirit, but also a long-term commercial approach, considerable expertise and capital. I believe that O2 is well equipped for this challenge and the opportunities that are opening up for us.
Johan Ihrfelt, VD