Norway and Sweden have been operating a common market for electricity certificates since 2012; however, this has caused some complaints of an uneven playing field.
Last year, Sweden's political parties agreed a long-term strategy to develop a 100% renewable energy system by 2040. To do this, it proposed an increase in the renewable target, something Norway did not want to do.
This had caused uncertainty in the sector, which the Norwegian Wind Energy Association (NORWEA) said had affected energy prices in the country.
A new deal between the two countries has been reached, which will allow Sweden to increase its quota to 18TWh by 2030. Currently, the common market is targeting 28.4TWh of renewable energy by 2020, with Sweden aiming for 15.2TWh, and Norway providing 13.2TWh towards the target.
Norway will retain the target from the original agreement, even though Sweden is increasing its aim. In April 2016, the Norwegain government unveiled plans to end its certificate system from 2021, which NORWEA criticised as being "premature".
Under the new agreement, Sweden will also devise a "stop mechanism" which will set a limit on when new projects can qualify for the scheme once the target has been reached.
"We have been through a period of great insecurity, which has reflected on prices in recent weeks. The provisions in today's agreement as well as a constructive effort to enact the agreement, should ensure that we land on an even keel before summer," said NORWEA.
Despite not increasing its target, Norway has pledged to increase support for renewable energy. In early April, the government proposed doubling funding to NOK 1 billion (€109.7 million) by 2019.