In this fast changing industry, how did the perception of renewable shift through time?
When we first started OX2, renewable energy was considered a marginal source to the system and was perceived as heavily subsidized. In 2018, we built the first wind farm outside of the subsidy system and since then we worked actively on communicating to the industry that renewable electricity is not a cost driver but it is actually lowering prices. Many people still believe that renewables are expensive when in fact they are the most affordable way to produce electricity. However, this year's energy crisis deeply changed the approach we have towards electricity as society is gradually starting to understand that all the power they use on a daily basis needs to come from somewhere.
How did something of the size of Valhalla come to be - do you have any other projects of this size in your pipeline?
In 2017, when we first laid its foundation, Valhalla was the third largest onshore project in Europe. In the meantime it has been dwarfed by our offshore development - this being where the biggest addition for renewables will come from in the Nordic grid. We are building a new project in Finland at 455 MW (almost 100 MW bigger than Valhalla), but it is still small compared to what we are doing offshore - which is a partnership with Ingka Group where they bought 49% of three projects that could produce about 40 TWh (more than 25% of Sweden's overall consumption).
In terms of strategy, how do you balance the energy sources in your portfolio?
We came into the industry with the approach to work only with the most competitive technologies and ten years ago that was represented by onshore wind, whose price was 50% cheaper. Similarly, the price of solar energy went down by 90% in the last ten years, so that made it a competitive resource. Since 2018, we have seen the opportunity to build offshore without subsidies and that was the holy grail for our company's growth, going from a staff of 60 people to 360 people today - from a portfolio of 2 GW to 24 GW.
Of course, solar energy does not play a central role in our portfolio considering we have mainly operated in the North, but we did expand towards the southern areas where the panel costs have dropped. The first solar project we developed is in Poland but we slowly enter the markets in Spain, Italy and Greece. Offshore and onshore wind remain our main drivers, but as the permitting process in Sweden is so tedious, the only way around it is to have a diversified business model. The plan is to become a global leader in renewable energy so we are working towards expanding OX2 in Australia and North America.
What is the best way of financing the renewable energy market today?
Allowing the market to regulate itself so as to drive the energy transition from within seems a good option. What we need is a level playing field and a streamlined permitting process because if we were to have the same legal frame in the past, nothing would have been built.
Although we are able to adapt to the environment, the construction of renewable energy plants cannot be invisible and in order to successfully build projects we need all the legal support of the political side.
What are some of the most stringent challenges the market is facing nowadays?
There is a huge need for skilled workforce in servicing, developing and construction but as more and more of the industry gets automated, this issue is going to be solvable in the near future. As I mentioned before, permitting is the issue that irks us the most at the moment. And it becomes even more dire when we corroborate it with the delicate task of convincing the community that in order to be able to use clean energy, they need to accept the plants in the proximity of their dwellings. Unfortunately, there are some populistic views all across Europe that are trying to play on people's feelings to refuse these projects but they are not pointing towards an alternative.
In Sweden, we have not built significant energy production since the 1970's, but in the last 14 years the renewables market has slowly emerged into the limelight. However, right now the environmental law book is becoming so thick that it is difficult to get anything through. At times we feel like we are hitting a wall when it comes to getting our projects approved and, all in all, it seems like old environmental laws are hurting the environment more than helping it. Bottom line, I believe that we must refresh our mindset and assimilate the idea that in order to enjoy clean energy we need to be willing to give up our old ways of living.
How do you see the renewable market evolving towards the 2050 targets in the context you mentioned before?
I think that we will reach the targets before 2050 now that the ball has started rolling and people are starting to slowly understand that being dependent on external oil and gas sources is not feasible. When green energy will become consumer driven and extremely affordable, the transition is going to really take off, moreover since renewables are much faster to implement than gas pipelines or oil refineries. From a technical standpoint, all the steps are perfectly attainable, but the challenge that we need to address regards the energy situation affecting the democratic ways of living that we had for the last 70 years in Europe.
