Sweden Gets Hydropower Proposal Seen Cutting Output by 20%

Swedish Environment Minister Lena Ek received a final report today on proposed water quality rules that utility Vattenfall AB said may cut hydroelectric output by a fifth.

The report on the ministry’s website follows a two-year government-appointed investigation into how to make Sweden’s hydropower regulations compliant with a European Union directive on water and the environment. New rules may force hydro operators to release reserves in order to improve plant and animal habitats downstream, according to the power industry lobby group Svensk Energi.

About 53 percent of the Nordic area’s power comes from running water through turbines. Sweden’s largest hydropower producer Vattenfall said March 25 the new rules may cut its water-driven generation by as much as 20 percent. The Stockholm-based utility produced 38 terawatt-hours from hydropower in 2012, or more than Denmark’s total power demand that year.

Magnus Kryssare, a spokesman for Vattenfall, declined to comment before taking more time to study the report.

Helsinki-based Fortum Oyj, which owns hydro assets with an average annual production of about 17 terawatt-hours in Sweden, said the proposal may have a limited effect.

“I am disappointed but not surprised,” Jens Bjoorn, head of communications for Fortum’s production assets in Sweden, said today by phone after the report was published. “We wanted to see more possibilities for the reappraisal of current permits for hydro production. Still, the goal of implementing the EU directive with less than 2 percent production cuts is within reach with this proposal.”

Fortum’s estimate is based on the most probable actions it sees are needed to implement the EU directive, rather than the report’s complete list of proposed measures, Bjoorn said.

Previous reports by consultants Sweco and the Swedish agency for marine and water management estimated a maximum 10 percent of hydro production losses if the government study’s proposals are made law.

To contact the reporter on this story: Jesper Starn in Stockholm at jstarn@bloomberg.net

To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Andrew Reierson, John Deane

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