Programme of International Training Conference on RES The Swedish/Norwegian Electricity Certificate Market – An Example of practical cooperation between countries Programme of International Training Conference on RES EEA Grants Torodd Jensen tje@nve.no

The European Economic Area (EEA) Energy policy RES directive 2009/28 Target for Norway?

Renewable energy targets 2020 EU rewable target 20 % in 2020 Norway renewable target 67,5% i 2020

How can Norway reach the 2020-target? TWh Vi har hatt en solid økning i fornybarproduksjon siden 2005, slik denne figuren viser. Denne figuren er hentet fra arbeidet med Norges handlingsplan. Og den store økningen fra 2005 skyldes både våte år, Eus beregningsmetode for normalisering av vannkraft og at det har blitt bygd noen nye kraftverk i denne perioden. Men for å nå målet om 67,5% må vi gjøre mye mer og her kommer elsertifikatene inn. A target of 67,5% renewable energy requires a substantial increase in renewable energy generation The Norwegian-Swedish el-certificate market established in 2012 is the main tool for Norway to reach the target The el-certificate market shall increase the electricity generation i Norway and Sweden with 26,4 TWh from 2012 until the end of 2020. It is stated in the treaty between Norway and Sweden that the 26,4 TWh shall be divided 50/50 towards the renewable targets in 2020. 23. nov. 2018

The Electricity Certificate Market Why a common certificate market? The regulations The market in brief The supply side The demand side The market itself Progress review 2015 Will not focus on the practical implications for different actors of the system. Will rather focus on more theoretical details of the market, such as what can be expected of new production, how is the demand for certificates constructed and what influences the price of certificates? Lista Vinkraftverk. Foto: NVE

a Treaty between Kingdoms Traktat mellom Kongeriket Norges regjering og Kongeriket Sveriges regjering Mål og forpliktelser Fordeling av fornybarandel Kontrollstasjon Nasjonale lover Hvem har rett på sertifikater? Hvem er sertifikatpliktige? Hvem har hvilke roller? Nasjonale forskrifter Målet med ordningen er å øke produksjonen av fornybar kraft i Norge og Sverige fram til 2020. Til å begynne med var dette begrunnet med ønske om å styrke forsyningssikkerheten – men etter hvert dukket også Eus andre fornybardirektiv opp. Norge og Sverige ble enige om prinsippene for et felles sertifikatmarked den 7.9.2009 – signerte en Overnskomsten Like ambisiøse forpliktelser i begge land – 13,2 TWh fra 1.1.2012. Teknologinøytral ordning! Protokoll i 2010 Traktat i 2011 – avtale mellom to land. Denne regulerer hvordan landenes forpliktelser skal oppfylles! Viktig forutsetning for at ordningen kunne tre i kraft er at Norge har innlemmet fornybardirektivet i EØS-avtalen.

Certificates Support Certificate Electricity Total income from power sale Certificate market Certificate Support NOK MWh Electricity Power market NOK I Norge – teknologinøytral ordning! Alle vannkraftanlegg under 1 MW og med byggestart etter 1.1.2004 har rett til sertifikater! Elsertifikat I 15 år minus tiden det har vært I drift før 01.01.2012 Alle anlegg (teknologinøytralt) med byggestart etter 7 september 2009 har rett til elsertifikater. Elsertifikat I 15 år minus tiden det har vært I drift før 01.01.2012

New production – so far Ta eventuelt vekk denne og kom inn på det under Issued certificates / production per 2015 (slide 17 og 18)

The basics of the system Start in 2012 26.4 TWh Common responsibility Technology neutral Market based 15 years of support Progress reviews 50/50 target sharing 13,2 TWh to be financed in each country within 2020 TN means all technologies recieve the same amount of support while, MB means the governments of Norway and Sweden doesn’t intervene in the market to ensure new production is realized in the respective countries. Green value of the new production shared equally between Norway and Sweden The role of the norwegian authorities in this scheme is not to ensure Norway get as much new procution as possible, but to pave the way for investments through amongst others giving licenses and sufficient grid development. Important: New subsidy scheme is not followed by new environmental legislation. Licenses are still only supposed to be given to projects where the benefits for the society are larger than the negative impacts.

The Swedish-Norwegian certificate market Investment period: 01. 01 Market based instrument Technology neutral scheme 13.2 TWh to be financed in each country within 2020; in total 26.4 TWh Green value of the new production shared equally between Norway and Sweden for use in EU Renewable Energy Directive Norwegian target in the Directive: Up from 58 to 67.5 % renewable share of energy consumption. Technology neutral means all technologies recieve the same amount of support while, Market base means the governments of Norway and Sweden doesn’t intervene in the market to ensure new production is realized in the respective countries. The role of the norwegian authorities in this scheme is not to ensure Norway get as much new procution as possible, but to pave the way for investments through legislation, giving licenses for generaton and grid development. Important: New subsidy scheme is not followed by new environmental legislation. Licenses are still only supposed to be given to projects where the benefits for the society are larger than the negative impacts.

The Demand side IT is compulsory to buy the certificates for: All power suppliers delivering electricity to final consumers Consumers that purchase electricity through bilateral agreements Consumption of self-produced electricity For a given share of their consumption/sales Expected cost for consumer 12 - 100 €/year. However, cost for consumers can be zero or minus since the price in the power market can be reduced compared to situation without the electricity Certificate Market Hvis elektrisk energi kjøpes for videresalg, er salgsleddet som omsetter til sluttbruker elsertifikatpliktig. Kommuner som mottar konsesjonskraft blir elsertifikatpliktige dersom de selv bruker kraften eller videreselger til sluttbruker. Dersom kraften videreselges til kraftleverandør, blir kommunen ikke elsertifikatpliktig. Nettselskap omfattes også av sertifikatplikten når de leverer til kunder på leveringsplikt med beregningsrelevant forbruk etter bestemmelsene fastsatt i eller i medhold av energiloven § 3-3. Forbruker av egenprodusert kraft er elsertifikatpliktig etter forskriften § 18, dersom forbruket er beregningsrelevant etter forskriften § 19. Sluttbruker er elsertifikatpliktig etter forskriften § 18 ved kjøp til eget forbruk på den nordiske kraftbørsen eller gjennom bilateral avtale (dvs. ikke avtale med ordinær kraftleverandør), dersom forbruket er beregningsrelevant etter forskriften § 19. Unntak følger regler om forbruksavgift på elavgift. Eksempler på unntatte sektorer: Kraftintensiv industri Veksthusnæringen Husholdninger og offentlig forvaltning i Nord-Troms og Finnmark 23.11.2018

STATUS 2015

New elcertificate production i NO og SE per Q2 2015

Present Hydropower activity in Norway Summary License given for SHP: 408 schemes, 1 160 MW, 3 642 GWh. Only ~1/3 developed Under License work: 516 schemes, 1 477 MW, 4 561 GWh SHP inaugurated in 2015: 20 schemes, 61 MW, 205 GWh Large hydro license given: 64 schemes, 1 275 MW, 2 940 GWh (~2/3 is upgrading and enlargement of existing) Under License work: 91 schemes, 1 880 MW, 4 600 GWh.

Present Windpower activity in Norway Summary License given in 2015: 6 windfarms, 527 MW, 1654 GWh. License given not developed: 54 Windfarms, 4 397 MW, 12 261 GWh Under License work: 14 Windfarms, 1 889 MW, 5 894 GWh.

Who’s buying the certificates? All power suppliers delivering electricity to final consumers Consumers that purchase electricity through bilateral agreements Consumption of self-produced electricity For a given share of their consumption/sales 23.11.2018

Progress review ”A progress review is the conduct of joint reviews and discussions between the parties concerning matters such as the need for amendment or adjustment of the regulations governing electricity certificates” Source: The agreement between Norway and Sweden. The reviews shall carry out joint analysis to evaluate the need for changes to the regulatory and adjustments to the quota curves in order to achieve the goal. We are now in the process of preparing a report for the Ministry of Petroleum and Energy which will be the basis for the possible changes in the quota curve in ordet to hit the target of 26,4 TWh in 2020. The Swedish Energy Agency is preparing a similar report to The Swedish Ministry of Enterprise, Energy and Communications. Since the demand for el-certificates are made on assumptions regarding the energy demand and the yearly production from power plants which came into operation before 2012 – there is a need for some adjustment in the quota curve in both countries. The target of 26,4 TWh in 2020 is not considered in the progress review – only how to reach that exact target in 2020!

1st Progress review Next Progress review! Reports by NVE and the Swedish Energy Agency Processing the laws in the Parliaments Open hearing - Proposal for changes in the law Changes implemented Next Progress review!

New targets 2030?

Thank you for your attention