Author: Jarra Hicks
In a unique agreement with a national energy retailer, the Swedish Wind Power Co-operative has found a way to secure clean, reliable energy supply at wholesale prices for its members. Its mutually beneficial relationship with Falkenberg Energy means anyone in Sweden connected to the grid can get involved, regardless of which wind turbines the energy comes from.
Project overview
The Swedish Wind Power Co-operative began in 1998 and opened its first wind farm in 2000. The co-op has developed a unique, nationwide, direct-sale service, selling the electricity it produces directly to its members — basically cutting out the ‘middle-man’ energy retailer. The co-op has achieved this by establishing a clever relationship with Falkenberg Energy, a national electricity retailer. It means the co-op can offer its members cheaper, community-owned, environmentally-friendly electricity anywhere in Sweden.
The co-op has continually grown and installed turbines in new locations. It currently owns and runs six turbines throughout Sweden and is building another two in late 2010. Turbines' capacity ranges between 660 kW and 1.5 MW, collectively producing 26,000 MWh each year. That's enough to supply 80% of its 1,300 members' energy needs. Electricity from the co-op’s wind farms is sold as shares to members in lots of 1,000 kWh for $1,114 (2009).
Project cost and funding
The project currently has six wind turbines, totalling 5.4 MW capacity, at a cost of $9.6 million.
The cost of the project is ongoing, as the co-op funds new wind turbines through increasing demand for shares. Share sales contribute about 80% of the finance, the rest comes from loans.
Background
The co-op arose from several parties wanting to protect the environment, and provide cheap and stable electricity prices — by selling electricity from wind power directly to its members. Often, community energy projects like this sell the electricity they produce to an energy retailer, which then sells it onto customers. This means the community gets the minimum price for the energy the project produces, and co-op members pay retail rates. In bypassing energy retailers, co-op members enjoy the advantage of paying wholesale electricity prices instead of retail. It also means members can produce their own power. And as a national co-operative, the co-op can supply power to its members all over the country, regardless of where the wind turbines are located.
The co-op’s unique relationship with ‘green’ national energy retailer Falkenberg Energy made this arrangement possible. For a small fee per kWh -- about 0.06¢ -- Falkenberg Energy agreed to take responsibility for the collection and supply of electricity from the project and deal with some of the administration. This means the co-op has access to a national grid network, and when it can't produce enough power to meet its members' needs, Falkenberg Energy does. Operationally, this requires all members of the co-op to also be Falkenberg Energy customers. Generally, members source 80% of their electricity from the co-op and 20% from Falkenberg Energy. The arrangement also means Falkenberg Energy can expand its customer base.
The co-op is open to Swedish electricity consumers all over Sweden, as long as they're connected to the grid. Co-op members include individuals, businesses, apartment blocks, other co-operatives, farmers, and because it's a national co-op, moving isn’t an issue. Members simply change their address with the co-op and with Falkenberg Energy. Shares can be sold on by the current shareholder and approved by the co-op board. What's more, the co-op helps link sellers with buyers. To date, shares have increased in value, which with cheap and stable electricity prices, makes it an attractive investment option.
Members pay nearly half the average market price for electricity. This is possible through selling the electricity to members at wholesale, cost of production prices, and because the co-op rolls all Swedish government wind incentives, such as subsidies, tariffs and taxes, into its price per kWh.
Challenges
In Sweden’s liberalised energy market, electricity prices were driven down by competition and the advent of hydropower. This, and drop-in feed-in tariffs for wind energy, challenges the financial viability of wind power. But because the co-op can sell directly to its members, it has a guaranteed market, and a fixed low price for the energy it produces.
Results
Successfully negotiating a relationship with a national energy provider has helped the co-op work on a national level, selling its electricity directly to its members. This means members get a stable, cheap supply of electricity and the co-op gets a better price for the electricity it produces.
Many local co-ops face funding limitations as there are limited investors among local people and businesses. Working nationally, the co-op has overcome this constraint, drawing members and investment from all over the country. Furthermore, the national co-operative model means people living in areas where local wind is not feasible can still effectively own and consume clean energy from wind power.
More information
Find out more about the Swedish Wind Power Co-operative or email info@svef.nu
Bolinger, M. (2001) Community Wind Power Ownership Schemes in Europe and their Relevance to the United State