Hidden Billions in Subsidies Keep Wind Power Alive

Despite recurring claims that wind power stands on its own, a completely different picture emerges for those who look behind the scenes. The losses are extensive—and the financing largely relies on public funds, credit guarantees, and pension capital. Christian Sandström, researcher, associate professor of business administration, and prominent columnist at Affärsvärlden, has in several analyses highlighted a system where risks are shifted away from investors and, in practice, end up with taxpayers.

For many years, the wind power industry has claimed that new production is built on strictly commercial terms without subsidies. But according to Christian Sandström, this is an oversimplified—and in practice misleading—description.

The profitability of Swedish wind power has for a long time ranged from weak to non-existent to negative. Double-digit loss margins have been the rule rather than the exception, while investments have continued to pour in. This raises a central question: Why does capital continue to flow into a sector that does not generate sustainable returns?

The answer lies, according to Sandström, in how the financing is structured. Instead of direct subsidies, a complex system of loans, guarantees, and publicly backed investments is used—often from foreign actors. The result is that capital costs are artificially pushed down.

Önusberget—an extreme example

A clear example is the Önusberget wind farm in northern Sweden. Even though the facility is one of the largest in Europe in terms of installed capacity, the company behind it shows an almost extreme financial structure.

With a share capital of only SEK 50,000 and debts of around SEK 8 billion, the business appears severely undercapitalized. The loss margin in 2024 was about minus 69 percent, and the company was forced to prepare a balance sheet for financial distress.

Yet the business continues—thanks to what is described as “favorable payment terms” in the long-term financing.

According to Sandström, this is difficult to explain with traditional market mechanisms. Rather, it indicates that lenders do not bear the full risk themselves, but that various forms of public support are present in the background.

Bankrupt projects and strange capital flows

Similar patterns are seen in other projects. The Aldermyrberget wind power facility, which went bankrupt in 2024, was financed through a series of unusual arrangements—including a total of 18 shareholder loans.

That type of loan usually occurs only in acute crisis situations. Here, it seems to have been a permanent state instead, Sandström observes.

The financing also had ties to Luxembourg and international capital structures, making transparency difficult. At the same time, it is apparent that the German state-owned bank KfW IPEX-Bank GmbH was a central financier.

A system of public financiers

Broadening the perspective reveals a bigger picture. The expansion of wind power has, to a large extent, been supported by a range of public and semi-public actors, both in Sweden and internationally.

Among the most prominent are the European Investment Bank—with billion kronor loans to Swedish projects, the Nordic Investment Bank—funding several facilities, Swedish Export Credit Corporation—”green” loans and export guarantees, the Swedish Energy Agency—direct grants and EU funds, and Euler Hermes—extensive credit guarantees.

Additionally, there are state-owned companies like Vattenfall, municipal energy companies, as well as Swedish and foreign pension funds. What these actors have in common is that they reduce the risk for private investors in various ways—often without it showing up as direct subsidies in the state budget.

“Russian dolls” of financing

According to Sandström, wind power project financing is often so complex it resembles a Russian doll—layer upon layer of loans, guarantees, bonds, and public funds.

This makes it practically impossible to determine exactly how large the public support is. But the extent is estimated to be in the tens of billions of kronor.

This is not just about the money of Swedish citizens. EU institutions, foreign state-owned banks, and international pension funds play a crucial role.

Municipalities and pension savers take the blow

A particularly controversial part of the financing involves pension capital and municipal investments.

Swedish AP funds, foreign pension systems, and municipal energy companies have invested large amounts in wind power—often with significant losses. In some cases, the projects have led to billion-kronor costs that ultimately affect welfare or pension payouts.

For example, municipal investments have meant that resources have been tied up in unprofitable projects instead of being used for core activities such as healthcare and elder care.

What happens if the money disappears?

One way to test the system’s sustainability is to ask a simple question: What would happen if the public financing sources disappeared?

According to Sandström, the answer is clear. The expansion of wind power would basically cease immediately. Many existing projects would quickly end up in restructuring or bankruptcy, since they lack equity and are dependent on continuous public injections.

In the longer term, even landowners risk being left with the costs of dismantling and remediation. By then, the green entrepreneurs will have left the sinking ship with their profits in hand.

A comfortable narrative questioned

In summary, Sandström believes that the image of an independent and profitable wind power sector is a “comfortable untruth.”

Behind the facade is an industry that for a long time has been marked by weak profitability—but which has been able to continue expanding thanks to extensive, and often hidden, public support mechanisms.

The question that remains is how long this system is sustainable.