The Swedish and Norwegian wind industry argue that proposals for an end to the countries’ shared electricity certificate system could create uncertainty and reduce profitability for developers and investors.
Both countries' governments have agreed that wind farms commissioned beyond the end of 2021 will not be eligible to receive electricity certificates under the two countries’ shared system.
Both countries can also agree another date for ending the certificate system in Sweden under a loophole in the agreement, a spokesman for the Swedish infrastructure ministry advised.
Under the system, the Swedish and Norwegian governments issue electricity producers certificates for each megawatt-hour produced.
These certificates can then be sold on the open market to consumers that have to fulfil an obligation of certified, clean electricity.
Announcing plans to ends the scheme, Swedish energy minister Anders Ygeman explained: “Larger production facilities of renewable electricity can now stand on their own two feet and that is very good.”
However, the Swedish wind energy association (Svensk Vindenergi) claims this proposal creates uncertainty, as it is unclear when the system will end.
The group argued that if a spate of new projects — commissioned between 1 January 2022 and 31 December 2023 — are eligible for certificates and flood the market, electricity prices could collapse and make Swedish wind power unprofitable. Falling prices helped drive Swedish energy giant Vattenfall to a loss in the first half of this year.
Svensk Vindenergi noted that Sweden’s electricity certificate price has plummeted since autumn 2018, following investment decisions being made on enough onshore wind capacity to meet Sweden’s 23.2TWH/year quota of electricity certificates.
It argued that if the electricity certificate system is not closed in balance, the price of the electricity certificate decreases.
Norway joined the common electricity market with its neighbour in 2012, and will also have its certificate system extended until the end of 2021.
The Norwegian wind energy association (Norwea) has long called for a volume-based stop-rule – whereby the system would end once a quota for annual wind power generation was met – rather than a date-based end.
However, its director Øistein Galaaen told Windpower Monthly that it has became more likely that the targets for annual wind power production — 23.2TWh in Sweden, 13.2 TWh in Norway, and 46.4TWh combined — would be exceeded, and so a date-based stop rule could not be designed and implemented swiftly enough to mitigate negative impacts for market players.
Therefore, he said the proposed date-based stop-rule is now the “least worst option”, but is still worried that it might not be enough to prevent a collapse in prices.
Galaaen added that Norwea shared Svensk Vindenergi’s concerns about new projects following the market and driving down prices, but was hopeful that postponing the end to the certificate system would not add to the risk.