Norway and Sweden agree on extending the El-certificate system

By:

Norway and Sweden have agreed on changes to the El-Certificate support system. This is good news for the RE marked in the Nordics as there have been a lot of uncertainty on the future of the support system, when Norway from 2021 no longer award El-Certificates and Sweden extending the support system until 2030 with new 18 terawatt-hours (TWh).

The main takeaway is that Norwegian projects have equal status as Swedish projects, the El-certificate system will have a stop mechanism in the future to avoid over establishment, Sweden will frontload volumes in 2018 and 2019 to raise demand and it will be a linear increase from 2022 to 2030.

The agreement between Norwegian and Swedish authorities regarding a Swedish expansion of the El-certificate system comprises the following main items:

  • Arrangements will be made for Sweden to extend the joint El-certificate system and introduce a target on renewable el production of 18 TWh in 2030. The system will then continue until the end of 2045.
  • Expansion of the El-certificate system is implemented by that quotas in Sweden are increased with 18 TWh in linear during the period from 2022 up to 2030. This will come in addition to present Swedish financing of 15,2 TWh in 2020. Norway retain financing of 13,2 TWh as in the original agreement.
  • Sweden will have to accelerate some of its existing quota obligations up toward 2018 and 2019 in order to increase demand for El-certificates at an earlier point in time.
  • Norwegian and Swedish El-certificates will have equal validity in the common market up to and including 1 April 2046. That is to say that Norwegian El-certificates shall be able to fulfill Swedish quota obligations with equal validity as Swedish certificates. Sweden shall have decisive influence on the framing of the El-certificate system after 2035.
  • Norwegian plants must be operational within the end of 2021 in order to be included in the El-certificate scheme and shall not be allocated El-certificates for production after 2035.
  • Before the end of 2020, Sweden shall introduce a stop mechanism that can contribute to achieving targets in 2030 and for predictability for market participants regarding the period after achieving targets.
  • Norway and Sweden shall share the results of the joint market in connection with reporting under the renewables directive. Norway and Sweden share results equally until Norway achieves reporting of 13,2 TWh.