Response to interpellation 2023/24:713 on Chinese ownership of wind power in Sweden
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerned Chinese ownership of wind power and security in the energy infrastructure. KD considers the issue of ownership and control to be incredibly important 1. KD argues that the government is already doing a lot through a law on the screening of foreign direct investments 1. KD emphasizes that Chinese ownership is problematic and that it must be evaluated whether the current implementation is sufficient 2. KD argues that wind power has low efficiency compared to nuclear power 3. SD argues that one should be cautious about pushing more energy into the system 4. SD believes that Sweden should move forward on its own instead of waiting for EU regulation 4. KD argues that Sweden must not build itself into a dependency on China 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I am glad to only be allowed to debate simple, easy and superficial questions here today. It is a good compensation for other contexts one sometimes finds oneself in.
I would like to have it recorded in the minutes that this introduction from me as Minister was not included in my written response and should be interpreted in a highly ironic manner. I say this so that it will be understandable for those who subsequently read this online.
Jessica Stegrud has asked me if I intend to take any initiatives to analyze the risks of Chinese ownership in Swedish wind power and the potential consequences thereof, and if, in that case, I intend to propose any measures to reduce or eliminate such risks and consequences.
The question of who owns and controls energy infrastructure in Sweden is incredibly important. This government presented a proposal for a law on the screening of foreign direct investments already during its first year in government. The law makes it possible for the Inspectorate for Strategic Products to intervene against investments in activities of vital importance to society if there are grounds for it. Large wind farms are covered in most cases by the definition of activities of vital importance to society.
Within the EU, negotiations are currently underway regarding a new European regulation on foreign direct investments. On as recently as May 2, Minister Forssell referred the government's bill on the proposal to the Committee on Enterprise. The government welcomes the main direction of the proposal, which means that all member states must establish a screening system. At the same time, it is important for us not to create unnecessary bureaucracy at the other end, but also not to unnecessarily complicate matters for desired foreign investments. It is also important for us that Sweden retains an exclusive right to decide which investments shall be permitted and which not.
In other words, the Government is already doing a lot regarding the issue of foreign investments in energy infrastructure. The issue is a high priority and is part of the Government's work to strengthen national security.
Jessica Stegrud (SD)
Madam Speaker! I thank the Minister for the answer. I would like to provide some background to the interpellation for everyone who is not so well-versed in the issue. The fact is that approximately 16 percent of Swedish wind power is today owned by the Chinese state, primarily through complicated corporate structures. According to the review, the companies are making large losses, which is partly due to them being emptied of money through interest schemes and high internal interest rates. But Swedish taxpayers have historically paid hundreds of millions of kronor for these investments via the electricity certificate system. There are now also large green credits and very favorable loans to be obtained from the EU side via, among other things, the European Investment Bank, and that involves additional tax funds.
These ownership structures often consist of layers upon layers of different holding companies, which in practice makes it almost impossible to get in contact with the Chinese owners and demand accountability, for example if the company falls into insolvency. Something that is worrying is that it is primarily the state-owned and in the USA blacklisted China General Nuclear Power Corporation that constitutes the parent company in these complicated corporate structures.
Then one can ask what the problem is, besides that Swedish taxpayers are subsidizing Chinese investments on Swedish soil. Yes, one problem is, as I just mentioned, that it has turned out to be very difficult to get in contact with the owners if the company ends up insolvent. What actually happens to the wind farm if electricity production ceases? What happens with dismantling and restoration if you go bankrupt and the owners cannot even be reached? How can responsibility be held to account? And who ultimately has to pay? Yes, it returns: our dear Swedish taxpayers and electricity customers. Markbygden 1 is a very adequate and current example.
Madam Speaker! There is another aspect to the Chinese ownership, and it has been noted by Säpo and the newly established authority, the Inspectorate for Strategic Products, which the Minister just mentioned. In a report, it is written in their situation assessment that China's foreign investments "constitute a possible Swedish vulnerability due to the risk of political and economic pressure."
The Minister mentioned in his answer that this government "presented a proposal for a law on the screening of foreign direct investments already during its first year in government" and that this law "makes it possible for the Inspectorate for Strategic Products to intervene against investments in activities of vital importance to society if there are grounds for it." The Minister further says in his answer, Madam Speaker: "Large wind farms are covered in most cases by the definition of activities of vital importance to society."
Thus, Minister, there is, as far as I can discern, an insight into the problem. There is a proposal for a law. Furthermore, there is an authority with the responsibility to review, and we have a proposal from the EU regarding a regulation concerning foreign direct investments in the Union. The previous government did nothing in this area either, so it is very good that the current government has actually addressed the issue. What I perhaps lack from the Minister and would like to hear a bit more about is what consequences the Minister sees that we may face as a result of this ownership and the problems with accountability and so on that I have highlighted. Are there further concrete measures in the pipeline?
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I would like to begin by thanking Jessica Stegrud very much for the interpellation.
Different actors provide different figures for the Chinese ownership. Some provide significantly lower figures than 16 percent. It depends somewhat on how one views it. For example, the industry association Svensk Vindenergi has commented on this, and the Energy Agency has attempted to assess it. When a calculation was made of all ongoing projects to be commissioned by 2026, it was concluded that Chinese companies own just over 5 percent of the wind farms and account for just over 6 percent of the total installed wind power capacity in the country and 7 percent of the total annual production of wind power electricity in Sweden.
I want to be clear, however, that I find this to be problematic. I also want to emphasize that it is one thing how one weights and calculates the actual direct ownership, and another that we in the value chain around wind power and power production have a very large dependence on several actors whom we see as problematic. These are considerably more difficult to access with the legislation that has now entered into force.
The law entered into force in 2023 and, as has been said, has its background in the EU regulation. It is only non-European investors who are affected by the law, but it is designed so that it should be difficult to circumvent it through, for example, sophisticated arrangements. That is the entire intention, but it is obvious that one will need to follow this moving forward. We are wise from experience; when we succeed in closing a gap in one place, people usually find ways to try to circumvent the law in other ways. Currently, negotiations are underway regarding the revision of the regulation on foreign direct investment. The purpose of the changes is to make it mandatory for member states to have a screening system, which it is not today, and to increase the requirements for cooperation and information exchange between different member states as well as between the member states and the Commission.
It is completely obvious that since we are currently in a negotiation regarding a revision, Sweden has reason to continuously evaluate whether we are satisfied with the implementation for our own part and how we ourselves have chosen to apply it. A major challenge is investments that have already been made versus those that will come in the future, where we have it easier to navigate than when it concerns that which is already in place in Sweden.
Jessica Stegrud (SD)
Madam Speaker! Thank you, Minister, for the answer!
Just what the minister mentions, Madam Speaker, that there are different figures, reflects the complicated corporate structures that exist. It is a problem in many different ways. China is mentioned here today, for that is what I am asking about in my interpellation. But there are other very questionable states and different interests that have similar structures. It is obviously a problem for the industry in Sweden.
We now have a very good cooperation regarding energy issues. We have worked out a new direction for Swedish energy policy. I do not know if the Minister mentioned it regarding the previous question. But we are now shifting the focus from volume and quantity to more quality and effect. It is truly a step in the right direction.
Just as the Minister mentioned, it is about the green transition that everyone is talking about and the need for more electricity and so on. It is driving certain things forward in the energy market. Today, there is an incredibly large pressure from the EU, our large influential industrial actors, parts of the business community, and not least the media, to pave the way for even more wind power, even though the disadvantages are starting to accumulate significantly.
We are talking about everything from poor profitability, which can be an effect of the complicated corporate structures, to credits and other things. It is about a lack of counterweight, shorter lifespans than calculated, lack of storage possibilities, destroyed natural and property values and so on. It is a problem that one needs to look more closely at as a whole.
It is incredibly important with the balancing act between providing the system with more electricity and considering the values and problems that I just mentioned. It is of the utmost importance that we look at the whole and take all aspects into account so that we do not stand here again in a few years and say: We have been naive. It is a worn-out expression that I do not associate with the current government. But I would still like to highlight those types of questions.
The Minister mentioned the EU regulation and the government's position. There, the government emphasizes: It is also important for us that Sweden retains an exclusive right to decide which investments shall be allowed and which not. That sounds excellent, and the intention is excellent that we get some clarity in the jungle.
I go back to my concrete question. Exactly how and when in time can we see the result? When can we be in the situation where we have that overall picture so that we can say: No, now that is enough, or: No, there is no risk in this case?
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I want to begin by confirming what Jessica Stegrud says regarding the figures and that the different pieces of information that exist are a sign of the complexity that exists in the issue.
Sweden has expanded 16,700 megawatts of wind power over the last 10-15 years. At the same time, we have decommissioned predictable and controllable fossil-free baseload power in the form of nuclear power. It is four reactors that have left us, and two reactors that were planned for were stopped.
Despite the fact that we have added 16,700 megawatts of wind power, electricity consumption has remained fairly steady. We are not getting more out of the power production that we have installed. I want to take the opportunity to try to explain why in all contexts where I can.
If we look at what we get out of the land-based wind power that we install, we see that it is approximately 11 percent, if 100 percent is the possible capacity in theory. For the offshore wind power, it is approximately 18 percent. Some point to lower and others point to significantly higher levels. We hope for technology that will allow us to get more out of the offshore wind power.
Compare it with what one gets from, for example, nuclear power. Instead of 11 percent or 18 percent, it stands at 74 percent, and it is the inverse relationship when it is toughest and most difficult in our country and we need the electricity the most.
People speak many times about the installed capacity, that is, what one has the possibility to get out in theory, and one does not speak about what one actually gets out of the wind power. Furthermore, with the weather-dependent power production, one needs to increase the balancing costs significantly. In 2021, the bill landed at 1 billion kronor, in 2023 it became 6 billion kronor, and this year the bill is expected to increase to 8 billion kronor for down-regulations in the system for the wind power.
This is added on top of the interest we have seen from some dubious actors to make investments in this. That is why delivery security goals are so important. Everything is connected. It is in stark contrast to the design of the electricity certificates that we have seen over the years.
The delivery security goal is also a prerequisite for the planning goal. We do not currently have an operationally secure and delivery-secure electricity system, which prevents the connection of new industries. Furthermore, one wants to be able to trust that those behind the power production are also actors we want to involve in the process.
Madam Speaker! To answer the last question concretely: Do I have a date? No. This is something that is now being negotiated at the EU level. If we receive indications that we have ongoing problems, we will continue to adjust the system.
The reason I am making a somewhat broader expansion regarding wind power in general is that the underlying conditions are changing fundamentally. There are some serious wind power actors who are interested in developing their production so that it can contribute more with ancillary services. There, we see another type of very long-term serious ownership. I see that positively as Minister for Enterprise and Minister for Energy.
Jessica Stegrud (SD)
Madam Speaker! Thank you, Minister! It was a brilliant exposition. I would not have done it better myself. The Minister summarizes very well the situation we have found ourselves in and the path that the Sweden Democrats and the current government are now taking together. It is absolutely excellent.
I can only add that the reason why we sometimes have the situation with an electricity surplus where we have to dump prices and shut down production and power shortages in other contexts is that the incentives in the market have been completely wrong. The market has not functioned. The electricity certificates have caused a great deal of trouble in that aspect.
In conclusion, I can say that I understand that the instinct is natural. We are trying to resolve the situation with the problem of shut down planned nuclear power and to solve the power problem with the increased electricity demand ahead. In that case, one easily ends up with decisions to just push more energy into the system. I want to raise a warning finger. I know that the minister is aware of the problem.
I also want to thank you for the honest answer that there is no date. I do hear, however, that it is mostly a matter of waiting for the EU to regulate it. It is nevertheless important that we move forward ourselves so that we do not, in a few years' time, stand here again, as I mentioned earlier, and say: We were naive. We have relied on unserious actors. The electricity system, the customers, and the taxpayers will have to bear the consequences.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! We saw it coming. I received a briefing from the units working on those issues as recently as just a few weeks ago, or if it has been a few months now, given that it is legislation that entered into force last year. I have, as minister, been eager to receive an ongoing update.
It needs some time to take effect so that we can evaluate and see how we ourselves feel it turns out. I personally follow it very closely. As I mentioned, I received a briefing during the spring about what we know at the current moment, and beyond that, we are active in the EU negotiations.
To go back to the main issue, the electricity system is Swedish, Nordic, and European. We are playing on a global market, so it is incredibly important that we have clear, transparent conditions to reduce the risk. It is important that we in Sweden allow foreign investors but are not naive and that we dare to think of value chains in a double sense – value in the form of generated value for our country, for Swedish citizens, and for the electricity system, but also in terms of whether we share common, fundamental values or not, so that we are not naive in that.
I want to add something that I had the opportunity to speak with Germany's Federal Chancellor Olaf Scholz about today. Minerals are very important for electrification. We cannot just stare blindly at the ownership of the wind turbines themselves but must also look at the value chain as a whole. Today, China is dominant. We cannot build ourselves into a similar dependency as Germany and Europe did with Russian gas. Here, Sweden is literally a gold mine, if one wants to be part of the solution to this equation as well moving forward.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.