The Energy Regulation and Markets Review - Stikeman Elliott

Norway
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The following plants are entitled to electricity certificates:
power plants based on renewable energy sources (hydro or wind) where
construction started after 7 September 2009;
existing power plants expanding their production on a permanent basis,
construction started after 7 September 2009; and
hydroelectric power stations with installed capacity up to 1MW where
construction started after 1 January 2004.
The system may cover the entire production or parts of it.
Power plants must be built in accordance with the licensing terms or comply
with conditions for exemption from licensing. Any government investment aid received
needed to be repaid before 30 April 2012 in order to receive certificates.
All actors delivering electricity to end-users must buy or obtain by other means
(e.g., own production) a certain yearly quota of electricity certificates. In addition,
certain electricity users that have entered into bilateral agreements (e.g., with a producer)
have to buy electricity certificates. Moreover, generators who use their own electricity are
to a certain extent required to buy electricity certificates.
The end-users finance the system, as the costs of purchasing certificates is added
on the electricity bill; however, the certificate cost must be an upfront fixed part of the
suppliers’ handling costs. In this way the suppliers must calculate the cost before delivery
starts and in this respect compete with other suppliers in offering the lowest handling
costs. Still, the certificate costs are shown as a separate item on the invoice to customers.
The NVE manages the electricity certificates in Norway in cooperation with
Statnett (register coordinator) and Energimyndigheten (the Energy Agency) in Sweden
in order to develop a well-functioning Norwegian–Swedish electricity certificates market.
Statnett issues electricity certificates to accredited power generators and maintains
an electronic certificate register that shows how many electricity certificates power
producers and electricity certificate-liable actors hold.
Certificates are sold on the Norwegian–Swedish electricity certificate market.
Power suppliers and some electricity users are required to purchase electricity certificates
for a certain proportion of the electricity they deliver or use.
The NVE and the Energy Agency accredit power plants that receive one electricity
certificate for each MWh of electricity generated. Thus, the support is independent of
whether the power plant is located in Sweden or Norway, and which renewable energy
source is used.
Participants liable for electricity certificates (i.e., the power suppliers and certain
electricity users) may choose to purchase their electricity certificates in Norway or Sweden.
Trading of electricity certificates across national borders means that the renewable energy
resources in both countries are utilised more effectively than if national markets were
established.
The price of electricity certificates is determined by supply and demand. The
demand is determined by how much power is used and the set electricity certificate
quota for each year. The supply is dependent on how much electricity is being produced.
Large-scale investments in new energy production will result in many certificates in the
market and the price of each certificate will drop. Few power plants under construction
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