System effects of the subsidy regime for a wind power in Sweden and Denmark

Panel: Panel 5: Energy Policy for a Sustainable Environment

Author:
Peter Helby, Department of Environmental and Energy Systems Studies, University of Lund

Abstract

This study comprise analysis and discussion of incentives inherent in the Swedish and Danish subsidy regimes for household owned wind power.
New results include an evaluation of the subsidy value of income and VAT tax breaks available to investors, and a demonstration of the importance of the choice of ownership arrangements for the profitability of wind power projects.

The study outlines the complex restrictions associated with different forms of wind power ownership. These cause the investment market to be highly segmented. The discussion includes several irrational system effects of the subsidy regimes. Among these are collision with energy saving goals, excessive capital costs, dubious siting decisions, and distorted competition among technologies.

In conclusion, some policy recommendations are suggested.