Sweden

Sweden

Minister says system not yet ready -- Green certificates delay

The Swedish government has bowed to criticism of the implementation of its planned green electricity certificate trading system by delaying its launch from January 1 to May 1. Svensk Energi, Sweden's electricity industry organisation, had accused the industry ministry of rushing through the new system without allowing the market adequate time to prepare. The ministry's Lotta Brede concedes the transition period has been too short and says more work is needed to define the way certificates can be traded as financial instruments.

Svensk Energi's Åke Rangborg applauds the decision, but adds that it will still be difficult for the industry to adjust to the new rules in time for the May start. The government is requiring power companies to gradually increase the proportion of electricity they sell from clean energy sources.

They must demonstrate their compliance with the mandate by acquiring green certificates, either by building their own power plant or buying them from green power generators. At present it is unclear how trading of certificates will be administered.

The postponement will come as little consolation to Sweden's wind power companies, which have complained that as proposed the green certificates system will benefit alternative "clean" energy sources such as biofuel and hydropower at the expense of wind power. They insist the wind power industry requires a more generous transitional period for the phase-out of state subsidies and that scrapping wind power subsidies without simultaneously imposing a carbon tax on fossil-based electricity production will distort competition.

Once green credit trade starts, subsidies to wind power will be successively phased out over a five year period. The government hopes the initiative will result in a 10 TWh increase in annual renewable energy production between 2003 and 2010.

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