More efficient national planning and permitting process

– lessons from wind power

Wind power is seen as an important part of the electrification of society to reduce greenhouse gas emissions, particularly from industry and transport. Although wind power can be positive for the development of society as a whole, local communities risk bearing costs in the form of, for example, additional physical infrastructure and a possible deterioration in quality of life.

Summary

Balancing these factors will be particularly difficult for democratic constitutional states that want to be competitive in the climate transition, i.e. where investments may need to be implemented at a rapid pace in order for countries to maintain or create new comparative advantages and thus become attractive for investment. Compared to other EU countries, Sweden has a long permit process, which thus constitutes a comparative disadvantage for Sweden's attractiveness in the climate transition.

The purpose of this study is to increase understanding of how the permit process and national planning can be developed to create greater attractiveness for investments in wind power. A key element in achieving this is acceptance. For acceptance, three aspects are crucial, there should be: (i) a broad acceptance of the technology in general and for individual projects, (ii) a permit process that is functional and where local actors feel that they are treated fairly by companies and authorities, and (iii) a distributive justice by perceiving risks and benefits equally distributed.

Several challenges for investments in Sweden

Interviews with wind energy developers show that there are several challenges related to the permit process and national planning in Sweden that are linked to the three factors mentioned above.

These are:

• the lack of a political consensus and vision for wind power,
• the large number of stakeholders and authorities involved in the permit process, which means that the permit process risk taking longer,
• the municipal endorsement that allows municipalities to delay projects or enter late in the permit process with a veto,
• the lack of political prioritisation of land use interests,
• the overriding land use interest of defence and lack of dialogue
• the late exclusivity of offshore wind projects; and
• ambiguities with grid connections. The analysis in this report shows that Sweden can learn from Denmark and Finland to address these challenges.

Sweden can learn from Denmark and Finland to increase acceptance of wind power

Denmark has clear policy targets and planned areas for wind power, while Finland focuses on combining social acceptance with a favourable investment environment. In Sweden, the political situation is more polarised, which contributes to obstacles in wind power development, especially through the municipal veto and a slow permit process.

Although the Swedish public is generally supportive of wind power, there is often local opposition to specific wind power projects. In Denmark and Finland, planning issues are dealt with at an early stage at the municipal level, allowing for quicker dialogues and decisions, whereas in Sweden, trade-offs are only made in later court cases. Denmark has also introduced special laws for energy parks, where certain protection considerations can be overlooked to facilitate renewable energy development. The system is based on municipalities voluntarily identifying areas for wind and solar power that the state can later approve as energy parks. This contributes to a faster and more efficient planning and permit process by making government priorities clear from the outset.

Distributive justice is important for acceptance

Distributive justice, where risks and benefits are perceived as fairly distributed, is another area where Sweden can learn from its neighbours. Denmark and Finland have established systems for financial compensation to municipalities and local residents, which increases the acceptance of wind power. Sweden has recently decided on a support scheme corresponding to the property tax for municipalities with wind power, but this support is both less generous and is subject to change over time. To ensure longterm local acceptance, Sweden should consider a more permanent solution for compensation to municipalities and local residents, in line with Danish and Finnish models.

Sweden can learn from Denmark and Finland to create a more functional permit process

A major challenge for investments in onshore wind power in Sweden is the requirement in the Environmental Code for municipal approval (the municipal veto). Denmark and Finland do not have directly the same regulation, but they have other tools that give municipalities great opportunities to prevent wind power development. Although the systems do not work in quite the same way, Sweden can be inspired, not least in terms of limiting the influence of the municipalities to being at an early stage in the permit process before wind power developers and the rest of society have invested unnecessarily much resources in a specific project.

Sweden can be inspired by Denmark's permit process for offshore wind power. For many years, Denmark has had a rapid expansion of offshore wind power. Two parallel procedures have been applied in the past: government auctions and an ‘open door’ model (which has similarities to the Swedish authorisation process). Although Denmark has now moved to a procurement model due to EU rules, the systems offer greater predictability for developers. This is particularly true of the absence of early exclusivity for project sites in Sweden, which creates uncertainty and can lead to competition for the same sites between different developers. Unlike Sweden, both Denmark and Finland also support offshore wind, which with the current cost picture makes Sweden significantly less attractive for investment.

Recommendations

Both a functional permit process and national planning are needed for wind power to be developed at a pace required for the green transition. Several proposals have been, or will soon be, presented to create a more functional permit process. This applies not least to a change in municipal approval from the Inquiry into a legally secure wind power permit process and legislative proposals expected from the Inquiry into offshore wind power.

These proposals should, however, be complemented by efforts on national planning. Sweden needs a more structured and coordinated strategy for wind power development. In particular, there is a need for a political consensus on the importance of wind power for the Swedish green transition and its importance for the development of a competitive manufacturing industry. In the shorter term, this may involve concrete targets for wind power, but also that in the longer-term targets may be needed for a national planning framework. The latter is not about setting targets for actual deployment, but about the Swedish public sector needing to create the conditions for a certain level of deployment.

To facilitate a faster expansion of wind power, acceleration areas should be designated in accordance with the EU Renewable Energy Directive.

This can be done by:

1. the government points out areas based on documentation from authorities, which requires municipal approval, and/or
2. allowing municipalities to apply to the government for a specified acceleration area, similar to the Danish system for energy parks, and ensuring that the government fulfils the requirements of Article 15 of the Renewable Energy Directive.

This needs to be linked to a long-term solution for how these wind power municipalities will be supported financially. One criterion for being designated as an acceleration area should be that there are good conditions for grid connection or that there are customers in the immediate area who produce or are expected to produce other energy carriers of electricity (i.e. power-to-X). These two variants may also need to be combined in order for acceleration areas to exist throughout the country and not just in municipalities with weaker economies. The starting point should also be that municipalities need to have a clear role and influence in national planning. This follows from the fact that local actors need to feel that they are treated fairly by companies and authorities in order to create local acceptance for wind power projects.