Norway

Norway

Certificate market decision delayed -- Cross border market in 2007

The final decision on what shape Sweden's revamped green electricity certificate market will take -- widely expected last month -- has been postponed. The plan now is for Sweden and neighbouring Norway to launch a joint market for trade of green certificates in January 2007.

xSweden's decision to delay the long awaited improvements to its wind power market comes after the government reorganised its ranks, including the appointment of a new energy minister, Mona Sahlin. Pressure of work is the reason given by government for not yet adding much needed security to the existing green certificates mechanism (Windpower Monthly, December 2004). While expressing concern at the delay, wind industry players concede it is reasonable for Sahlin not to want to make any rush decisions.

xIn parliament, Sahlin has said she is determined that changes to current legislation are made to give wind power "the best possible chance of success." Calling the goal of 10 TWh of wind generation by 2010 "ambitious," Sahlin says government would like to raise it further. "A review of the certificates system is ongoing, but let me stress that the system will be made permanent and thereby create the long term view that is necessary for more investment." The wind industry has presented three different legislative proposals for securing the market. Sahlin also vowed to speed up the site permitting and wind project approval process.

xState owned utility Vattenfall is to have a major role in shaping the future of the electricity industry, she said. "The company's new focus on offshore wind power is a step in the right direction." Sahlin added: "It is the government's view that it will be able to provide up to 5 TWh of the 10 TWh target from renewable sources."

xxdominance

xThe suggestion that 50% of the target is to be met by Vattenfall is causing some concern, however. "The dominance of one or possibly two huge utilities is not good for competition and that is the main problem for Sweden," says Achim Berge of Sweden Offshore Wind, the developer behind the country's largest proposed offshore plant, Krieger's Flak (page 21). "What we need are many smaller utilities, developers and producers, like in Germany, so real competition can be healthy and help create a stable and realistic price structure." Changes to the certificates system, he adds, should be made "as soon as possible and the legislation passed so talks with investors will not be jeopardised."

xxsetback

xGunnar Fredriksson of the Swedish Wind Power Producers Association (SVIF) agrees. The delay, he says, is a setback. "When the government initially promised to confirm its response to our three scenarios, there was a wave of enthusiasm and renewed confidence among developers and producers," he says. "The fear now is that confidence may begin to decrease with yet another delay. Most critical for us is that the changes are decided upon, taken and written down in Swedish law."

xFredriksson is far from pessimistic. "At least we will know our position once and for all," he says. "It makes sense for Norway to join in at the same time, as it will be less upheaval and a smoother transition. I still believe that Norway could have been forced to accept the Swedish terms, but this way at least it should all happen at once."

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