Vattenfall abandons Vidar offshore wind projects

Vattenfall, the Swedish utility, will not proceed with the 'giant Vidar offshore wind farm,' one of two that the government approved this week because it would not be 'profitable,? CEO Anna Borg stated.

Vidar, located off the coast of Sweden north of Gothenburg has the capacity to provide 7.8 terawatt-hours of electricity for southern Sweden. This is important because a lack in power has caused a major problem in industry.

Borg stated that the current calculation does not add up.

The two main reasons are that there is no offshore transmission grid in Sweden. The second reason is that electricity prices are too low to justify new capacity.

Vattenfall halted the development of Kriegers Flak, another wind park located in southern Sweden.

Borg stated that even restoring this would not make offshore winds a viable proposition.

She said that "over a longer-term horizon, we do not yet see an increase in demand which would?push the prices up to levels at which investing in these wind farm becomes profitable" after the company's results for the second quarter.

Sweden's energy mix has a fossil-free composition and is cheaper than countries such as Germany, where Vattenfall, the German company building Nordlicht, is building its largest offshore wind farm.

Sweden does not subsidise wind energy like many other countries. The government offers hundreds of billions of crowns worth of cheap loans and price guarantees to nuclear developers. The government claims that the country requires base power which is not dependent on weather. $1 = 9.6476 Swedish Crowns (Reporting and editing by Emelia Sithole Matarise).

(source: Reuters)