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The renewable energy bubble may be showing its first signs of bursting. In late July, the Swedish business magazine Affärsvärlden published an account of the developments of the wind power market that shows an extremely steep decline in value for several existing, or proposed, wind farms in northern Sweden. Investors are bailing out of the green projects when faced with rising costs, and lack of profits – and perhaps most centrally, that the political support for the expansion of wind power has begun to falter. This means less, if any, public funding, guarantees, and loans for wind power projects, that have so far managed to keep this generally unprofitable industry afloat.
In northern Sweden, which has been the site for many wind farms due to the very low population density, many “parks”, as they are often called in an attempt to “greenwash” them, were valued at up to 1,5 million euros per installed megawatts around 2018. Today, the same projects have seen their values crash to 10 euros per megawatt, according to ELS Analysis, who wrote the account of the wind power business for Affärsvärlden.
This development, which has occurred in silence, has likely evaded the broader media in order to prevent an absolute and immediate crash of the wind power sector, which, although it has been quietly sidelined during the past three years of conservative government, remains politically favoured. The financial interests engaged in wind power and other so-called green technologies, are also likely to want to avoid a panic, so an orderly withdrawal from the failing enterprises can be made.
But on top of that, there is of course the ideological bias in the mainstream press that is positive to the so-called green transition, and which consistently has neglected to highlight the criticism that wind power receives, both from the public, and in academia. Out of all the factors, it is probably the media’s enthusiasm that has done the most to inflate the bubble to the point where it is today.
Sweden in particular was until recently marketed as attractive for wind power, both due to geographical factors, but also due to widespread political support for “green” projects, which had wind power magnates rest assured. Due to the political shift in the country, however, this has changed. Now, the investors are stuck without options – their facilities and plans are costly to maintain, and there are no buyers to be found, because everybody who would even tentatively be interested in operating wind power has seen the writing on the wall.
Yet the wind is picking up speed elsewhere
The negative prospects for wind power in Sweden is not reflected everywhere in the world. On the contrary, the green model of societal development seems to be prevailing in many other countries, and the proportion of the world’s electricity production that is derived from renewable energy sources is rising. According to the IEA, “clean” energy output will surpass fossil fuels already in 2026. Though wind power only constitutes a segment of this renewable expansion, it shows that time has yet to run out for wind turbines globally.
The growing prevalence of wind power may be attributable to states such as China investing, both domestically and abroad, in the technology. State-sponsored or state-adjacent projects have a higher tolerance for dearth of profit, and are often ideologically compelled to sustain economic hits. A key actor in the spread of wind power in Europe is of course the European Union, which has programmes intended to advance the green transition with loans and grants. These funds are able to withstand multiple failures, due to the sheer size of the bureaucratic machine.
In Sweden, the worst of the green ideology may be nearing the end of its course. The latter half of 2024 was spent speculating when, and not if, the hyped-up green battery manufacturer Northvolt was going to go out of business, due to the overextension of its idealistic business plan. The collapse of Northvolt left the mid-sized town of Skellefteå in northern Sweden in a disillusioned state, with untold amounts of withdrawn private and public investments. This large-scale green bankruptcy, enabled and caused entirely by the political tendency to spend public resources on things that sound too good to be true, left a sour taste for many Swedes who were duped on the incredible opportunities of the green transition.
Sweden may as a result of the far-gone mismanagement and false promises as such be ahead of the curve when it comes to the collapse of the wind energy sector. While we have yet to see the steep collapse of the market for wind farms in any other country, it is likely to come there too, when the patience of politicians and investors finally runs out. Wind energy is tied to a number of critical volatilities that essentially prevents it from surviving against planable energy sources, such as nuclear, and even fossil fuels.
Economic challenges to wind power obvious from the start
Many commentators on the crisis of wind energy in Sweden have in vain argued about what they mean are facts of physics, that prevent wind turbines from becoming reliable generators of electricity – and profit.
The primary argument is that wind energy is only situationally dependable due to their reliance on the weather – and as such require backup from planable power sources in order to not break the energy supply. The practice of prioritising renewable technologies such as wind and solar power in the EU means that planable sources are instead put in the backseat. Nuclear and fossil fuels serve as the backup to systems that are rendered inoperable when it is not windy enough – or too windy for the wind turbines to function.
What results from the largely unpredictable shifts in the weather is that wind and solar power is subject to abrupt shutdowns, such as when the power drops dramatically, or surges beyond the capacity of the electricity grid. This is given as the short-hand explanation for the massive Iberian blackout in April, that saw most of Spain and the entirety of Portugal cast in darkness for more than 24 hours. That incident alone likely contributed to the growing skepticism of renewable energy in Sweden, and across Europe.
But even if the balance is properly maintained in order to avoid shortfalls or overloading, wind power fails as a sustainable enterprise. As skeptical economists have also pointed out, when wind power is over-producing, which is common on its “good” days, power comes in such an abundance that the energy price sharply drops. Sometimes even to negative levels. Operating and maintaining wind turbines as such often becomes an endeavour that costs more than it brings in. This effect is further entrenched in Sweden in particular, due to geographic factors. Often, wind farms across the country are enjoying similar wind conditions, which means installations in the north, in the south, or out to sea, don’t have any competitive edges over each other – they are all affected by the nation-wide price plummet and cannot take advantage of the wind to fill any shortfalls of energy; there simply isn’t any.
These may be facts that have caught up with the wind energy sector and caused the panic that is brewing under the surface.
And there might be more physics-based cold showers for this increasingly desperate industry. While many wind farm entrepreneurs are banking on proposals of massive wind turbines, mounted on poles as tall as 240 metres, no such project has yet been realised. They may in fact be physically impossible to erect, due to the forces of nature. The structural stress on the poles, the fragility of the blades and the turbines itself, poses major challenges to these idealistic green mega-projects. Some commentators have ruled out the possibility of these crown jewels of the green transition ever leaving the blueprint stage. But despite this, they are being used to market the technical prowess and majesty of wind power technology.
These facts and other irreconcilable flaws of the wind power industry are slowly seeping into the public discourse in Sweden. It is only a matter of time before it happens in the rest of Europe as well. The question is, will the EU then surrender its green idealism, or double down on its life support?