First cross-border support system launches in Europe

SWEDEN/NORWAY: Sweden and Norway are to be the first countries in Europe to launch a joint renewable-energy support programme when their electricity certificates scheme launches on 1 January.

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The two countries are using the co-operation mechanism set out in the EU's renewable-energy directive, which allows member states to work together to achieve the EU's renewable-energy targets at a lower overall cost. The European Commission estimates that up to €10 billion a year could be saved if states treated renewable energy as a commodity in the European market rather than in national markets.

The Swedish parliament voted for a joint market on 30 November and the Norwegian parliament did so in mid-December, when it also voted through the EU renewables directive — Norway is not an EU member.

Sweden's participation in the scheme will mean extending the electricity certificate scheme it has operated since 2003. In Norway, the certificates will replace investment support for wind farms provided by government-owned enterprise Enova.

The joint support scheme should make it easier for investors to evaluate project alternatives between the two countries. It should also mean that resources will be used more efficiently and lead to a reduction in costs to consumers.

Variations of electrical certificate schemes are used by several other EU member states, including the UK, Belgium, Italy, Romania and Poland.

In Sweden, eligible power producers receive one certificate per megawatt hour. The certificates are sold on a market providing extra income on top of the power sold. Demand is guaranteed as end users are obliged to buy a share from certified power production.

The Swedish wind-power industry is divided in its opinion about the joint market. It sees the need for expanding the market in order to deal with poor liquidity, but fears that investments in renewables will move from Sweden to Norway, which has better wind resources.

The Norwegian Wind Energy Association welcomed the initiative. "The Norwegian wind-power industry is very glad that we're set to have a predictable support scheme with a target that's based in law," said Oistein Schmidt Galaaen, the association's director. "And provided that the Norwegian authorities follow up when it comes to licensing and grid development, we remain confident that the scheme could boost the Norwegian wind market."

Sweden and Norway are open to the idea of more countries joining the certificate scheme, but this is unlikely to happen before a review in 2015.

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