The Swedish-Norwegian

Electricity Certicate Market

AN N UAL R E P OR T 2 0 1 2
2
1
Contents
Preface 3
The Nordic electricity market 4
Key gures for 2012 6
How the electricity certicate market works 7
Goal fullment 16
Issuing of electricity certicates 20
Cancellation of electricity certicates 22
Surplus 24
Price and trading 27
Progress review 30
Tables 32
Glossary 38



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3
Preface
The rst joint annual report from the Swedish Energy Agency and the Norwegian Water Resources
and Energy Directorate (NVE) about the Swedish-Norwegian electricity certicate market has now
been completed. With this report, we wish to present a picture of the most important events and key
gures for the electricity certicate market during 2012.
For further information about the electricity certicate system and the electricity certicate market,
please see the websites of either public authority.
Since 1 January 2012, Sweden and Norway have had a common market for electricity certicates.
It is based on the Swedish electricity certicate market, which has been in existence since 2003.
The goal of the electricity certicate market is to increase the renewable electricity production in
both countries combined by 26.4 TWh by the end of 2020. Sweden and Norway are responsible for
nancing half of the increase each, but it is up to the market to decide where and when the new
production is to take place.
In addition to information about fullment of the common goal, this report also includes a
summary of approved production in the Swedish electricity certicate system up to the end of 2011
and approved plants in the Norwegian transitional settlement.
The Agency and NVE are happy to receive feedback about the annual report. Please contact us if
you wish to put forward your views on how to make next years report even better.
The project managers for the annual report were Johanna Nilsson at the Swedish Energy Agency
and Anton Jayanand Eliston at NVE.
Erik Brandsma,
Director-General
Swedish Energy Agency
Per Sanderud
Water and Energy Director
Norwegian Water Resources and Energy Directorate
4
The Nordic electricity market
1
The Nordic countries have a common, deregulated electricity market, where energy companies
can buy and sell electricity via the Nord Pool exchange. Electricity distribution via the electricity
networks (national, regional and local grids) is controlled by monopolies. The trading in electricity
involves producers who sell electricity via the electricity exchange (Nord Pool) to electricity
trading companies, who in turn sell the electricity to users. Alternatively, producers may sell the
electricity direct to users. The total price paid by the user includes tax as well as the cost of the
electricity. In addition to the sale of electricity, the producers costs and income are affected by
the EUs Emission Trading Scheme and the electricity certicate system.
Many energy companies and functions must cooperate efciently on the electricity market in order
to safely deliver electricity to users and in order to enable consumers to buy their electricity on a
market where free competition prevails.
The national grids are owned and managed by each countrys transmission system operator
(TSO). They are Svenska Kraftnt in Sweden, Statnett in Norway, Energinet.dk in Denmark and
Fingrid in Finland.
Electricity producers can choose whether they wish to sell the electricity directly to major users,
to electricity trading companies or to the electricity exchange. Most of the electricity produced is
sold via the electricity exchanges spot market.
Electricity trading companies purchase the electricity from the producers or from the electricity
exchange, and sell it to electricity end users. The role as electricity retailer (electricity supplier)
involves having commercial contacts with the end users.
The grid operators own the regional and local networks. They are responsible for ensuring the
electric energy is delivered to the users. The regional networks transport electricity from the natio-
nal grid to the local networks, in some cases also to major users, such as large industrial companies.
The local networks distribute the electricity to other electricity end users, such as households,
ofces, industries, etc.
1) Source: Svenska kraftnt, Elmarknaden i Sverige och Svenska kraftnts roll (The Electricity Market in Sweden and the Role of Svenska Kraftnt),
ISBN 978-91-976721-0-8, May 2011
5
Electricity end users, such as households and industries, use the electricity. Users normally have
both an agreement with an electricity trading company to buy electricity and an agreement with an
electricity network company to be connected to its network. Users pay a network fee to their
electricity network company for the connection and transfer of electricity.
The marketplace for trading in electricity - the Nordic electricity exchange Nord Pool Spot -
offers standard agreements that make it easier for the market participants to do business with each
other. Nord Pool Spot has a spot market (physical trading) for the trade in electricity per hour up to
the day before delivery. Nasdaq OMX Commodities have a forward market (nancial trading) for
long-term trade, where the market participants can hedge their electricity price. Most of the trade
per hour is done on the spot market, while a minor part is done bilaterally between electricity
producers and electricity trading companies. The long-term trade can also be done bilaterally.
6
Key gures for 2012
The tables below summarise relevant gures for the electricity certicate market in 2012.
Analyses and clarications of the content of the tables are provided continuously in the publication.
Key gure table A
Key gures Sweden Norway
Electricity certicates issued [million electricity certicates]
1
21.4 0. 2
Electricity certicates issued to plants included in the common
electricity certicate goal [million electricity certicates] 0.74 0.04
Electricity certicates issued to plants not included in the
common electricity certicate goal [million electricity certicates] 20.7 0.16
Expected renewable mean annual production for plants included
in the common electricity certicate goal [TWh] 2.8 0.4
Cancelled electricity certicates [million electricity certicates] 16.3 2.4
Quota obligation fullment [%] 99.95 99.97
1) 1 million electricity certicates = 1 TWh electricity production entitled to electricity certicates.
Key gure table B
Key gures Sweden and Norway
Surplus for 2012 [million electricity certicates] (change since 2011) 11.7 (+ 3)
Volume-weighted average price of transactions in the electricity
certicate registers NECS and Cesar [SEK/electricity certicate]
(change since 2011) 201 (- 46)
Average spot price [SEK/electricity certicate] (change since 2011)
1
168 (- 19)
1) Average of daily closing prices for spot price contracts of the three largest brokers on the electricity certicate market during 2012.
7
How the electricity certicate
market works
1.
2.
3.
4.
4.
5.
5.
Electricity certicates provide nancial support to producers of renewable electricity in Sweden
and Norway. The electricity certicate system is market-based and aims to increase the production
of electricity from renewable sources in a cost-effective way.
Illustration of the electricity certicate market
1. Electricity producers 2. The electricity certica- 3. Demand for electricity 4. It is the electricity end 5. Each year, the body with
receive one electricity tes are sold on the electri- certicates is created by user who nally pays for quota obligation must can-
certicate for each mega- city certicate market, electricity suppliers and the expansion of the rene- cel electricity certicates
watt-hour (MWh) of where supply and demand some electricity end users wable electricity produc- in order to full its quota
renewable electricity govern the price. In this being obligated by law to tion, as the cost of the obligation.
produced for a maximum way, the producers receive buy electricity certicates electricity certicate is
of 15 years. an extra income from the corresponding to a certain part of the electricity in-
electricity production in proportion (quota) of their voice
addition to the price of electricity sales or usage.
the electricity.
8
A COMMON MARKET These plants are thus not included in the common
Since 1 January 2012, Sweden and Norway have goal. During the period from 2003 to 2012, i.e.
had a common market for electricity certicates. before Sweden and Norway formed a common
It is based on the Swedish electricity certicate market, Sweden nanced increased renewable
market, which was established in 2003. The goal is electricity production of 13.3 TWh.
to increase renewable electricity production by a to-
tal of 26.4 TWh in the two countries between 2012 The common electricity certicate market means
and 2020, and in this way contribute to the achie- that the renewable resources are used more
vement of the countries goals under the EUs Rene- efciently than if the countries were to work each
wables Directive
2
. The common electricity certi- by itself on increasing the production of renewable
cate market is due to continue until the end of 2035. electricity. A larger market with more participants
contributes to increased liquidity. As both Swedish
Sweden and Norway are benetting from equal and Norwegian producers of renewable electricity
shares of the increased common renewable electri- can receive support from the system, investments
city production from the 2012 level when offset- are made where the circumstances and the prota-
ting the countries goals for 2020. In addition to bility are best. This means that the goal of
this, Sweden and Norway shall independently increased renewable electricity production can be
nance the renewable electricity production in achieved in a more cost-effective way than by
plants that became operational before 1 January having two national markets.
2012 and which are entitled to electricity certicates.
FACT 1: Contractual undertaking
According to the agreement on a common market for electricity certicates between
Sweden and Norway, both countries together shall strive to cancel 198 million certicates
(corresponding to 198 TWh) by 2035. The reason why 198 TWh are to be cancelled is that
each country shall nance 13.2 TWh new renewable electricity production during 15 years
(which makes 15 year x 13.2 TWh = 198 TWh).
Sweden and Norway have agreed on equally ambitious undertakings from the time the
common market started. In conjunction with the Swedish Riksdag deciding on a new
Swedish quota curve in 2010 in order to produce an increase of 25 TWh between 2002
and 2020, a quota curve was achieved that was designed to produce an increase of 13.2
TWh as from 2012. As the countries had agreed on an equally ambitious undertaking,
the goal for the common market became 26.4 TWh between 2012 and 2020
2) The EUs Renewables Directive was incorporated in the EEA agreement in December 2011.
9
ELECTRICITY PRODUCERS
Electricity producers apply to have their plant
approved for allocation of electricity certica-
tes from the Swedish Energy Agency or the
Norwegian Water Resources and Energy Direc-
torate (NVE). The Swedish or Norwegian state
issue electricity certicates to the electricity
producers for each megawatt-hour (MWh) of
renewable electricity produced. The electricity
certicates can then be sold, and the electricity
producers receive an extra income from the
electricity production over and above the price
charged.
Electricity certicates are issued on the 15th of
each month, based on the electricity produc-
tion of the previous month. The certicates are
issued to the electricity producers certicate
accounts with the Swedish or Norwegian
accounting systems, named Cesar and NECS
3

respectively.
New plants and production increases within
existing plants are entitled to receive electricity
certicates for a maximum of 15 years, however
no longer than to the end of 2035, when the
electricity certicate system ends. The total
number of electricity certicates issued is
governed by the electricity production of the
approved plants. For combined heat and power
plants, the proportion of renewable fuel also
has an impact. External factors, such as tempe-
rature, precipitation, wind availability and
electricity balance affect the electricity produc-
tion, and therefore also the number of electrici-
ty certicates issued.
FACT 2: Energy sources
Electricity produced from the follo-
wing sources is entitled to electri-
city certicates:
biofuels
4
(and peat in combined
heat and power plants in Sweden),
geothermal energy,
solar energy,
hydro energy,
wind energy,
wave energy.
FACT 3: Assignment periods for
approved plants
Plants that have become operatio-
nal in Sweden as from 1 May 2003
are entitled to electricity certi-
cate for 15 years.
In Norway, the assignment period
is 15 years from the approval date,
minus any time the plant may have
been operational before 1 January
2012.
Production increases within exis-
ting plants in Norway and Sweden
give entitlement to electricity
certicates for the increased
renewable electricity production
for a maximum of 15 years.
Major reconstruction within exis-
ting plants in Sweden is deemed
equal to new plants, with an alloca-
tion period of 15 years.
3) Svenska Kraftnt is the accounting authority for Cesar, and Statnett has registration responsibility for NECS.
4) In Sweden according to the Ordinance (2011:1480) concerning Electricity Certicates. I Norway according to FOR 2011-12-16 No 1398: Regulation concerning Electricity
Certicates. Owners of biofuel plants must declare monthly in arrears in Cesar or NECS respectively how large a proportion of the electricity produced comes from fuels
entitled to electricity certicates compared to the total input fuel.
10
QUOTAS AND MARKET PARTICIPANTS 2012 to 2035. The quota curves are designed to
WITH A QUOTA OBLIGATION stimulate the expansion of renewable electricity
Market participants with a quota obligation are according to the goals set for the countries. Each
primarily electricity suppliers, but there are also countrys quota curve has been calculated and
some electricity end users (see fact box below). adopted based on assumptions about future elec-
Each year, they must buy electricity certicates tricity usage with quota obligation. If the actual
for a certain proportion of their electricity sales electricity usage with quota obligation diverges
or usage the quota obligation. The quotas from the expected electricity usage, this may
state the percentage of the electricity usage with mean that the quota curves need to be adjusted
quota obligation for which the market partici- in order for cancellation to take place according
pants with quota obligation need to purchase to the agreement between the countries. The rst
electricity certicates. adjustment will be made in conjunction with the
progress review in 2015.
The quotas, which are set in the Act concerning Such an adjustment of the quotas does not entail
Electricity Certicates, will gradually increase a change of the goal of 26.4 TWh new produc-
until 2020 (see Table 1 in the table section, and tion of renewable electricity.
also Figure 1), which leads to increased demand
for electricity certicates. The quotas are set for For 2012, Swedish market participants with a
each country. Swedens quota curve applies from quota obligation needed to buy electricity certi-
2003 to 2035. Norways quota applies from cates equal to 17.9 % of their electricity sales/
FACTA 4: Market participants with a quota obligation
In Sweden, the following market participants have a quota obligation:
Electricity suppliers.
Electricity end users who use electricity they have produced themselves, if the
amount of electricity used is more than 60 MWh per calculation year and has been
produced in a plant with an installed capacity higher than 50 kW.
Electricity end users to the extent they have used electricity they have imported or
bought on the Nordic electricity exchange.
Electricity-intensive industries registered by the Swedish Energy Agency.
In Norway, the following market participants have a quota obligation:
Those who deliver electricity to an end user.
Electricity end users who use electricity they have produced themselves.
Electricity end users to the extent they have used electricity they have bought on
the Nordic electricity exchange or through bilateral agreements.
11
2
0
0
3
2
0
1
5
2
0
2
7
2
0
0
6
2
0
1
8
2
0
3
0
2
0
0
9
2
0
2
1
2
0
3
3
2
0
3
5
2
0
1
2
2
0
2
4
20
18
16
14
12
10
8
6
4
2
0
Figure 1. Quotas for Sweden and Norway
Source: Act (2011:1200) concerning Electricity Certicates; LOV 2011-06-24 No 39: Act concerning Electricity Certicates.
Q
u
o
t
a

[
%
]
Quota for Sweden
Quota for Norway
usage, and in Norway the quota was 3 %. The QUOTA OBLIGATION AND
reason why the quotas differ is mainly because CANCELLATION
they are set so as to also nance the production Each year, market participants with quota obli-
of renewable electricity in plants that are inclu- gations shall inform the Swedish Energy Agency
ded in the transitional settlement. These plants or the Norwegian Water Resources and Energy
are not part of the common goal. The difference Directorate respectively of the number of electri-
in quotas is also because the usage of electricity city certicates they need in order to full their
with a quota obligation is higher in Sweden than quota obligation and hold this number on their
in Norway. electricity certicate account. Swedish market
participants with quota obligations do this by
TRADING submitting a declaration of their quota obligation
Trading in electricity certicate is done on the to the Agency. Norwegian market participants
electricity certicates market, where the price is with quota obligations shall instead approve the
determined by supply and demand. The com- quota obligation presented in NECS.
mon market makes it possible to trade in both
Swedish and Norwegian electricity certicates. In order to full the quota obligation, the mar-
The trading is carried out through bilateral ket participant with a quota obligation must
agreements between electricity producers and also hold electricity certicates corresponding
market participants with quota obligations and to the statutory quota of the sales/usage of elec-
also via brokers. Both electricity producers and tricity. The electricity certicates are thereafter
market participants with quota obligations cancelled on 1 April, which means that the elec-
must have an electricity certicate account with tricity certicates are deleted and cannot be
Cesar or NECS. During trading, electricity
certicates are transferred from a sellers
account to a buyers account.
12
used again. With the cancellation, the market
participant must buy new electricity certicates
in order to full the quota obligation for the
next year. In this way, a demand for electricity
certicates is constantly being created.
Important dates for quota obligation and
cancellation:
15 February
- Norway:
Network companies owners shall notify NECS
of the amount of electricity relevant to the cal-
culation used by each market participant with a
quota obligation in their network area.
16 February
- Norway:
The total electricity sales/usage by the market
participants with quota obligations for the pre-
vious year is available on their accounts with
NECS.
1 March
- Norway:
Last day for Norwegian market participants with
quota obligations to approve the quota obligation.
- Sweden:
Last day for Swedish market participants with
quota obligation to submit a declaration of the
electricity sales and usage on which the previous
years quota obligation is based.
31 March
- Sweden and Norway
Last date for market participants with quota
obligations to hold a sufcient number of elec-
tricity certicates on their electricity certicate
accounts to full the quota obligation.
1 April
- Sweden and Norway
Cancellation of the number of electricity certi-
cates required to full the quota obligation.
If there are not a sufcient number of electricity
certicates on the account, the Swedish Energy
Agency or NVE shall decide to impose a quota
obligation charge.
FACT 5: The cost to electricity suppliers
The electricity suppliers buy electricity certicates on the electricity certicate market,
where the price is set on the basis of supply and demand and varies over time. The elec-
tricity suppliers cost for electricity certicates is part of the customers invoices. The
cost varies with the expense to the electricity supplier for the purchase of the electricity
certicate and the years quota. The cost to the electricity customer for the electricity
certicate on the invoice is also dependent on the type of electricity contract. In order to
make an assessment of what a certain price of an electricity certicate corresponds to in
terms of cost per kWh for an electricity certicate, the following formula can be used:
SEK
Electricity certicate price MWh x years quota
= cost of the electricity certicate [SEK 0.01/MWh]
10
The volume-weighted annual average price of transactions in the electricity certicate regis-
ters NECS and Cesar for electricity certicates during 2012 was SEK 201 per electricity certi-
cate. The quotas were 17.9 % in Sweden and 3 % in Norway during 2012. This corresponds to
an estimated average cost of electricity certicates of SEK 0.036/kWh in Sweden and SEK
0.06/kWh in Norway during the year. In addition to this cost, transaction costs for the elec-
tricity supplier and value added tax for the electricity customer may also be added.
13
THE ELECTRICITY CERTIFICATE
MARKET IS FINANCED BY ELECTRICITY
END USERS
If the market participant with a quota obliga-
tion is an electricity supplier, its cost for electri-
city certicates will be part of the customers
invoices. In this way, electricity customers in
Sweden and Norway contribute to paying for
the expansion. Electricity-intensive industries
have an electricity certicate cost only for that
part of the electricity not used in the manufac-
turing process.
Despite the fact that Sweden and Norway are
to nance the common goal in equal parts, the
cost per kilowatt-hour (kWh) differs in the two
countries. Different quotas and a common elec-
tricity certicate price means that the cost per
kilowatt-hour differs.
ONE ELECTRICITY CERTIFICATE
MARKET, TWO NATIONAL REGULATORY
FRAMEWORKS
With the common market, an agreement was
entered into between Sweden and Norway con-
cerning the way in which the common market
was to work. But even if there is a common
market, in addition to the agreement the
countries have their own national legislation
regulating the electricity certicate system in
each country.
The agreement on a common market for
electricity certicates between Norway and
Sweden is available in its entirety on the
government website for each country.
www.regeringen.se
www.regjeringen.no
The national laws that govern the electricity
certicate system in Sweden are the following:
Act (2011:1200) concerning Electricity
Certicates
Ordinance (2011:1480) concerning
Electricity Certicates
The Swedish Energy Agencys Regulations
STEMFS (2011:4) concerning electricity
certicates
The national laws that govern the electricity
certicate system in Norway are the following:
LOV 2011-06-24 No 39: Act concerning
Electricity Certicates
FOR 2011-12-16 No 1398: Regulation
concerning Electricity Certicates
FACT 6: Differences between the two countries
There are certain differences between the countries legislation, even if the fundamental
principles are the same. Some important differences are presented below:
In Sweden, peat is entitled to electricity certicates.
The proportion of biofuel in mixed waste qualies for electricity certicates in Norway.
Plants that become operational in Sweden after 2020 can receive electricity certicates.
In Sweden, there is an opportunity to be issued electricity certicates for the entire pro-
duction following a major reconstruction; in Norway, electricity certicates are issued
for the production increase.
Some minor differences in exception rules for electricity-intensive industry.
14
WHO DOES WHAT?
The Swedish Energy Agency and the
Norwegian Water Resources and Energy
Directorate:
Manage the electricity certicate system in
each country.
Handle applications for electricity certicates.
Register/deregister market participants with a
quota obligation.
Supervise each countrys regulatory frame
work for electricity certicates.
Provide continuous information about the
development of the electricity certicate market.
Administer sanction and quota obligation
charges.
The Swedish Energy Agency and NVE report
market statistics, such as the number of approved
production plants and registered market partici-
pants with quota obligations on their websites.
These also include information about the electri-
city producers from which electricity certicates
can be bought, and other general information
about the electricity certicate system. The web-
sites also include this publication in an electronic
edition.
www.energimyndigheten.se
/the-electricity-certicate-system
www.nve.no/elsertikater
Svenska Kraftnt and Statnett
Responsible for registration in the Swedish and
Norwegian accounting systems (Cesar and
NECS respectively).
Issue electricity certicates on the 15th of each
month.
Cancel electricity certicates following
decisions from the Swedish Energy Agency
and NVE respectively.
Publish information continuously about the
number of electricity certicates issued, sold
and cancelled, and also the average price of
electricity certicates.
Svenska Kraftnt and Statnett report informa-
tion continuously on their websites. These inclu-
de information about the number of electricity
certicates issued, sold and cancelled, and also
the average price of electricity certicates.
http://certikat.svk.se
http://necs.statnett.no
Swedish Energy Markets Inspectorate
In Sweden, the Swedish Energy Markets Inspec-
torate (Ei) is the supervisory authority for the
energy markets for electricity, natural gas and
district heating. Ei checks that energy companies
comply with the regulatory framework and
works to ensure the energy markets function
well. SEMIs website shows information about
the electricity prices of the electricity suppliers -
including the electricity certicate price - which
makes it possible for electricity customers to
compare electricity prices on the market.
The website also includes analyses and monito-
ring of the contemporary environment of the
electricity market
www.energimarknadsinspektionen.se/en
15
The Council
The Council for the electricity certicate
system was set up in accordance with Article
11 of the Agreement on a Common Market for
Electricity Certicates dated 29 June 2011
between Sweden and Norway. The Council
consists of representatives from the Norwegian
Ministry of Petroleum and Energy and the
Swedish Ministry of Enterprise, Energy and
Communications. The task of the Council is to
facilitate planning and the implementation of
progress reviews, among other items. This is
done by initiating investigations, maintaining
continuous supervision of the development of
the market, analysing any needs for develop-
ment of the regulatory framework and developing
a common communication strategy for measures
of importance to the market participants.
The Council is a non-decision-making body in
relation to national entitlement, for example
changes in national legislation.
The Committee
The Committee for the electricity certicate
system was set up in accordance with Article
12 of the Agreement on a Common Market
for Electricity Certicates dated 29 June 2011
between Sweden and Norway. The Committee
consists of representatives from the Swedish
Energy Agency and NVE.
The Committee shall keep itself informed and
discuss the design and implementation of the
regulatory framework for allocating electricity
certicates. This applies, for example, the allo-
cation for production increases within existing
plants and new allocations following major
reconstruction.
It is the Council that sets the Committees
work procedures. The representatives on the
Committee shall provide the background infor-
mation necessary for the Committee to carry
out its tasks.
16
Goal fullment
During 2012, plants with an expected mean annual production of 3.2 TWh became operational
and were approved for inclusion in the electricity certicate system. Of this production, 2.8 TWh
was constructed in Sweden and 0.4 TWh in Norway. Production from these plants is included in
the common goal of 26.4 TWh electricity production from renewables before the end of 2020.
In 2012, Swedish wind power represented
around 68 per cent (2.1 TWh) of the new expec-
ted mean annual production included in the
common goal. The wind power plants that beca-
me operational in Sweden during 2012 are relati-
vely evenly distributed across the area prices
(see Table 4.1 in the table section).
It was primarily new hydro plants that contribu-
ted to the increased expected mean annual pro-
duction in Norway. The major part of the new
electricity production in Norway is in NO2 and
NO5 (see Figure 3 and Table 4). Most of the
Norwegian wind power plants that became
operational in 2012 are not included in the
electricity certicate system, as the owners
instead chose to retain the investment grant
from ENOVA.
In order to achieve the goal of 26.4 TWh
by the end of 2020, an average of 2.93 TWh
new electricity produced from renewables
needs to become operational in the two
countries together each year.
FACT 7: Expected mean annual production in relation to actual production
The expected mean annual production is an estimate of the annual production of electricity
from renewables at one plant under normal operational circumstances. This will differ from
the actual production each year for the plant. This chapter uses expected mean annual pro-
duction, as this gives a picture of the expected annual production for the operational plants.
It is the actual production that determines the number of electricity certicates issued to the
plant. The production entitled to receive electricity certicates is dependent upon the wea-
ther and the time of the year the plant was approved for inclusion in the system. The goal of
26.4 TWh will correspond to the actual production by 2020. In 2012, these plants were issued
electricity certicates corresponding to 0.04 TWh in Norway and 0.74 TWh in Sweden.
17
There is no xed goal for each year, but the re- It is the market participants that make the
lationship between actual expansion to the aver- investment decisions and build the plant, and
age gure still provides an indication of how thereby determine how much renewable electri-
much new production is needed each year in city production is expanded each year.
order to reach the goal by 2020 (see Figure 2).
2
0
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6
2
0
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0
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30
25
20
15
10
5
0

E
x
p
e
c
t
e
d

m
e
a
n

a
n
n
u
a
l

p
r
o
d
u
c
t
i
o
n

[
T
W
h
]
Figure 2. New expected mean annual production within the 26.4 TWh goal
Sweden
Norway
2,93 TWh/year
26,4
2
0
1
2
FACT 8: Plants not included in the common goal
The plants entitled to receive electricity certicates that became operational before 2012
are not included in the common goal of 26.4 TWh by 2020. Electricity certicates issued
to these plants shall instead be nanced by each country. During 2012, these plants were
issued with electricity certicates for production corresponding to 0.16 TWh in Norway
and 20.7 TWh in Sweden. On 1 January 2012, approximately 1,450 plants were phased out
of the electricity certicate system in Sweden. This means that the allocation of electricity
certicates will reduce signicantly during 2013.
Source: Swedish Energy Agency, NVE
18
Figure 3. New expected mean annual production for plants within
the 26.4 TWh goal divided up by area prices

SE1
SE2
SE3
SE4
NO4
NO3
NO5
NO2
NO1
Wind
Hydro
Biofuel
Expected mean annual production per
area prices
Sweden GWh Norway GWh
SE1 432 NO1 22
SE2 1 049 NO2 49
SE3 579 NO3 119
SE4 787 NO4 64
Total 2 847 NO5 104
Total 358
Source: Swedish Energy Agency, NVE
19
20
Issuing of electricity certicates
Sweden Norway
Norway
25
20
15
10
5
0
0,25
0,20
0,15
0,10
0,5
0
During 2012, the electricity producers in Sweden and Norway were issued 21.6 million electricity
certicates in total. The number of electricity certicates issued will fall in 2013, however, as a
result of older plants being phased out of the system.
In total, electricity producers in the two
countries were issued 21.6 million electricity
certicates during 2012. The distribution
between Sweden and Norway was 21.4 and 0.2
million electricity certicates respectively.
Figure 4 and the table on the next page shows
the allocation within the countries and the dist-
ribution between different sources of energy.
DISTRIBUTION OF ISSUED
ELECTRICITY CERTIFICATES
The reason the number of electricity certicates
issued in Sweden continues to increase is largely
due to the continued expansion of wind power.
In 2012, the number of electricity certicates
issued to wind power amounted to 7.2 million.
The allocation to biofuels in Sweden was at
approximately the same level in 2012 as in
2011, despite new biofuel power having been
added. Electricity certicates issued to electrici-
ty production from hydro energy in Sweden
increased signicantly compared to 2011. This
may be explained by 2012 having been a year
with much greater water availability.
Figure 4. Electricity certicates issued in Sweden and Norway during 2012
Source: Svenska Kraftnts and Statnetts accounting systems (Cesar and NECS respectively)
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[
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]

Solar
Peat
Biofuel
Wind
Hydro
Wind
Hydro
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21
Key gure table C
Electricity certicates issued [million] Sweden Norway
Wind 7,16 0,003
Hydro 3,14 0, 20
Biofuel 10,57 -
Solar 0,001 -
Peat 0,55
21,4
-
Total 0,2
FACT 9: Electricity producers receive one electricity certicate for each megawatt-hour (MWh)
renewable electricity produced.
1 MWh = 1 electricity certicate 1 TWh = 1 million electricity certicates
PHASING-OUT OF APPROVED PLANTS
During 2013, the number of electricity certica-
tes issued on the market will be reduced. This is
because many older Swedish plants were phased
out from the electricity certicate system at the
end of 2012, and will therefore no longer be
entitled to certicates. Some of these plants have
however been given a longer allocation period
following outages. The plants also have the
opportunity to get a new allocation period if
major reconstruction has been carried out, or if
production has increased within the existing
plant.
Of the Swedish plants that were operational be-
fore 1 May 2003 and have been issued electricity
certicates, the allocation period for the majori-
ty ended at the end of 2012. The older plants
remaining are entitled to receive electricity
certicates until the end of 2014.
The number of approved plants fell by approx-
imately 1,450 due to the phasing-out as from
1 January 2013. During 2012, these plants were
issued 10.8 million electricity certicates.
During the same period, 10.8 million electricity
certicates were issued to the plants that remain
within the system. Some of those that remain in
the system became operational in 2012, and
were therefore not issued electricity certicates
for a full year.
Tables 7 and 8 (see the tables section) show the
installed capacity and expected mean annual
production for all approved plants, divided up
by when their allocation period ends. For biofuel
plants, an annual average for the electricity pro-
duction entitled to electricity certicates over the
last two years is shown instead of the plants
expected mean annual production. It is im-
portant to remember that the amount of electri-
city produced that is phased out at various times
may change due to differing operational circum-
stances. As the annual average for biofuel plants
is calculated using longer series of production
data, the importance of structural and overall
changes is smaller. Factors that may impact on
the calculation are changes in the proportion of
fuel entitled to electricity certicates and exter-
nal factors, such as temperature.
22
Cancellation of electricity certicates
In 2012, a total of 18.7 million electricity certicates were cancelled. Of these, 16.3 million were
cancelled in Sweden and 2.4 million in Norway. This is 1.2 million electricity certicates fewer
than the authorities had assumed when drawing up the quota curves.
The quota curves are based on how much elec- this was that electricity usage with a quota obli-
tricity produced from renewable resources is to gation was lower than expected. The discrepan-
be nanced and how large the electricity usage cy between actual and expected electricity usage
with a quota obligation can be assumed to be in with a quota obligation was about the same in
each country. The relationship between these Sweden and in Norway, but because of the hig-
gures provides a percentage, which constitutes her quota in Sweden, the discrepancy between
the quota. As the quota is xed, while the elec- actual and assumed cancellation of electricity
tricity usage with a quota obligation varies with certicates was greater in Sweden.
factors such as the temperature and economic
outlook, the number of cancelled electricity QUOTA OBLIGATION FULFILMENT
certicates will not always correspond to the The cancellation for 2012 shows that most mar-
cancellation calculated to achieve the goal. A ket participants with a quota obligation cancel-
year with greater electricity usage than assumed led a sufcient number of electricity certicates.
in the quota curves means that too many electri- For 2012, the overall quota obligation fullment
city certicates are cancelled, while years with was 99.9 per cent. Market participants with a
lower electricity usage means that too few quota obligation who do not cancel electricity
electricity certicates are cancelled. certicates have a quota obligation charge impo-
In order to ensure that Sweden and Norway sed for the electricity certicates lacking on the
nance equal amounts of electricity production, certicate account. For 2012, 48 market partici-
the quota curves must be adjusted during the pants (6 in Norway, 42 in Sweden) had to pay
on-going collaboration on the electricity certi- the quota obligation charge of SEK 297.86 per
cate market. Any adjustment will be made in electricity certicate that had not been cancelled.
conjunction with the progress review in 2015. A total of 9,490 electricity certicates were lack-
During 2012, the electricity usage with a quota ing at cancellation. The charge amounts to 150
obligation in Norway was higher than expected per cent of the volume-weighted average price
in the quota curve. Therefore more electricity under the calculation year on transactions in the
certicates were cancelled than expected. Howe- accounting systems (Cesar and NECS). Histori-
ver, as the quota in Norway was low, the discre- cally, the proportion of cancelled electricity cer-
pancy between the assumed and actual cancelled ticates has been almost 100 per cent in Sweden.
electricity certicates was small (see Figure 5). In Norway, the quota obligation fullment was
Contrary to what happened in Norway, fewer similarly almost 100 per cent for the rst cancel-
electricity certicates were cancelled in Sweden lation, which occurred in 2012.
than expected in the quota curve. The reason for
23
Cancellation of electricity certicates
20
18
16
14
12
10
8
6
4
2
0
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Assumed in the quota curve
Actual cancellation
Norway Sweden
Key gure table D
Cancellation for 2012 Sweden Norway
Cancelled [million electricity certicates] 16,3 2,4
Quota obligation fullment [%] 99,9
SEK 297.86 each
99,97
NOK 267.80 each Quota obligation charge
Key gure table E
Cancellation for 2012 Sweden Norway
Assumed Actual Assumed Actual
in the quota curve usage and in the quota curve usage and
cancellation cancellation
Usage [TWh] 96,6 91 74
3
2, 2
79,4
2,4
Quota obligation [%]
Cancelled [TWh]
17,9
17,3 16,3
Figure 5. The number of cancelled electricity certicates in relation to the
number assumed in the quota curve for Norway and Sweden respectively
Source: Svenska Kraftnts and Statnetts accounting systems (Cesar and NECS respectively), Swedish Energy Agency and NVE
24
Surplus
25
20
15
10
5
0
At the end of 2012, the surplus minus the certicates cancelled, amounted to 11.7 million electri-
city certicates. This is an increase of 3.0 million electricity certicates compared to last year and
corresponds to an increase of 33 per cent.
Electricity certicates issued but not cancelled participants with quota obligation do not cancel
constitute the electricity certicate surplus. electricity certicates according to their quota
There must be sufcient electricity certicates to obligation.
balance the market. The surplus increases
during the years when the allocation of electrici- At the start of the common market for electricity
ty certicates is higher than the demand for certicates in 2012, the surplus was 8.7 million
them. The explanation for differences between electricity certicates. This surplus has been
supply and demand for electricity certicates built up gradually since 2003 on the Swedish
during individual years may be the time when electricity certicate market, and is now part of
plants are built and start producing, or the fact the common market.
that fewer electricity certicates are cancelled
than expected. The latter occurs if the electricity In 2012, the surplus increased by 3.0 million
usage with quota obligation is lower than assu- electricity certicates. This means that after the
med when the quota curve was set, or if market 2012 cancellation, the surplus held 11.7 million
Figure 6. Electricity certicates issued, cancelled and the accumulated surplus
during 20032012
Source: Svenska Kraftnts and Statnetts accounting systems (Cesar and NECS respectively)
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Electricity certicates issued
Electricity certicates cancelled
Accumulated surplus
2
0
0
3
2
0
0
7
2
0
1
1
2
0
1
2
2
0
0
4
2
0
0
8
2
0
0
5
2
0
0
9
2
0
0
6
2
0
1
0
25
electricity certicates (see Figure 6). To reduce DISTRIBUTION OF THE SURPLUS
the surplus, Sweden adjusted its quotas at the Following the cancellation of electricity certi-
latest progress review. The new quotas apply cates on 2 April 2013, there were 14.2 million
from 2013, and will contribute to reducing the electricity certicates in various accounts with
surplus as a one-off measure. NECS and Cesar. This also includes electricity
certicates issued in relation to production in
The surplus in relation to the number of electri- January and February 2013.
city certicates to be cancelled may provide an
indication of the pressure on the electricity cer- The electricity certicates in accounts as of
ticate market. A low surplus in relation to the 2 April 2013 had a market value of SEK 3.3
number of electricity certicates to be cancelled billion, based on the average closing price of
may contribute to increased price pressure on SEK 230/MWh for spot price contracts for
the electricity certicate market, as the compe- electricity certicates on 2 April 2013 with the
tition to buy electricity certicates increases. In three largest electricity certicate brokers.
the same way, a large surplus in relation to the Figure 7 shows how these electricity certicates
number of electricity certicates cancelled may were distributed across the accounts of various
contribute to a negative price pressure on the market participants in Sweden and Norway.
electricity certicate market.
NO - Market participant
1%
NO - Electricity supplier entitled to electricity
certicates and with quota obligation
with quota obligation

SE - Market participant
with quota obligation
SE - Electricity supplier
entitled to electricity
12%
19%
8 %
23%
37%
37 %
NO - Trader, ~ 0 %
NO - Market participant entitled to electricity
certicates, ~ 0 %
SE - Market participant entitled to electricity
certicates
certicates and with
quota obligation 23 %
SE - Trader
Size of the surplus on 2 April 2013: 14.2 million electricity certicates. This also includes electricity certicates issued in
relation to production in January and February 2013.
Figure 7. Distribution of electricity certicates between different market
participants in Norway and Sweden
Source: Svenska Kraftnts and Statnetts accounting systems (Cesar and NECS respectively)
26
27
n
o
v

-
1
2
d
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c

-
1
2
450
400
350
300
250
200
150
100
50
0
250
200
150
100
50
0
Price and trading
The average spot price registered with the three largest brokers of electricity certicates amounted
to SEK 168/MWh during 2012. This corresponds to a price fall of 10 per cent since 2011. Despite a
fall in the average market price of electricity certicates, over the full year, the spot price of electri-
city certicates rose by as much as 44 per cent during 2012.
2012 STARTED WITH LOW PRICES ON expansion rate may be some of the factors that
ELECTRICITY CERTIFICATES could explain the price development.
The lowest level was reached in February,
when the average spot price for the month TRADING ON THE ELECTRICITY
from the three largest brokers of electricity CERTIFICATE MARKET
certicates was SEK 140/MWh. The prices in Trading in electricity certicates is mostly done
these marketplaces in 2012 have been approx- between market participants with quota obliga-
imately equal to an average difference between tions and market participants entitled to electri-
highest and lowest prices of SEK 2/MWh. city certicates. There are also traders with
Prices rose during the second half of 2012, accounts in the electricity certicate registers
and the average price of electricity certicates NECS and Cesar. These traders intention is
for December nished up at SEK 210/MWh to buy electricity certicates and sell them at a
(see Figure 8). The size of the surplus and the prot at a later date, and they may thereby
Figure 8. Average price of electricity certicates in spot trading during
the period 20032012
A
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SKM
ICAP
CleanWorld
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3
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2
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2
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2
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-
1
2
s
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p

-
1
2
o
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t

-
1
2
2
0
0
7
2
0
1
1
2
0
1
2
2
0
0
4
2
0
0
8
2
0
0
5
2
0
0
9
2
0
0
6
2
0
1
0

Difference between highest and lowest prices
Source: CleanWorld, ICAP and Svensk Kraftmkling
SKM
ICAP
CleanWorld
28
contribute to evening out prices of electricity
certicates over time.
According to a summary of the transactions
in NECS and Cesar during the period from
1 April 2012 to 31 March 2013, approximately
49.4 million electricity certicates were sold
(which corresponds to 49.4 TWh).
Data from the three largest brokers on the elec-
tricity certicate market shows that approxima-
tely 25 TWh was traded via brokers during the
period 31 March 2012 to 1 April 2013. Figure 9
shows the distribution of the various contracts
traded via brokers.
Figure 9. Electricity certicate trading via brokers divided up by type of
contract during the period 1 April 2012 up to and including 31 March 2013
35
30
25
20
15
10
5
0
P
r
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p
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n

[
%
]
SPOT
(8,1 TWh)
Type of contract
March 2013
(7,9 TWh)
March 2014
(5,8 TWh)
March 2015
(2,3 TWh)
March 2016
(1,0 TWh)
Source: CleanWorld, ICAP and Svensk Kraftmkling
FACT 10: Standard contracts supply and payment
Electricity certicates are bought and sold both bilaterally and via brokers. There are two
types of broker contracts available on the electricity certicate market, namely spot price
contracts and March contracts. These contracts are available for the next ve years.
Spot contract Price Determined on the contract date
Delivery Within ve banking days of the contract date
Payment Within ten banking days of the contract date
March contract Price Determined on the contract date
Delivery 18 March each year
Payment Within ve banking days of the contract date
29
REGISTER PRICES
The volume-weighted average price of transac-
tions in NECS and Cesar as from 1 April up to
and including 31 March 2013 was SEK 198.57/
MWh. This is a decrease of SEK 7.9/MWh
since 1 April 2012. The average prices presen-
ted in the electricity certicate registers Cesar
and NECS are volume-weighted average prices of
transactions in each register during the period in
question. The price therefore reects all transfers
between two legal entities during the period.
The register price provides a value of the electri-
city certicates over a historic period, weighted
in relation to the volume turned over during the
same period. The market price, on the other
hand, provides an indication of the value of an
electricity certicate at a given point in time.
The register price can therefore not be consi-
dered to be the market price of electricity
certicates.
30
Progress review
NVE and the Swedish Energy Agency are working on producing a basis for how the rst progress
review of the Norwegian-Swedish electricity certicate market should be designed. The review shall
be carried out before the end of 2015.
According to the agreement for the Swedish-Nor- 5. Evaluation of the current quota obligation
wegian common market for electricity certicates, charge compared to alternative fee structures.
progress reviews shall be carried out at regular
intervals. The reviews shall carry out joint analysis The Swedish Ministry of Enterprise, Energy
to evaluate the need for changes to the regulatory and Communications has mandated the
framework and adjustments to the quota curves in Swedish Energy Agency to:
order to achieve the goal.
1. Analyse and propose any adjustments of the
The Norwegian Ministry of Petroleum and quota obligation curve necessary in order for
Energy has mandated the Norwegian Water Sweden to full its commitment to Norway
Resources and Energy Directorate NVE to produce in the agreement on a common market for
a basis for the progress review as follows: electricity certicates;
1. Technical adjustment of the quota curve based 2. Identify and assess risks that may lead to the
on an assessment of the electricity usage with expansion rate of renewable electricity pro-
quota obligation up until 2035 and the produc- duction not developing as expected up to 2020;
tion within the Norwegian transition system;
3. Highlight the role of peat in the electricity
2. Assistance to the Norwegian Ministry of certicate system and analyse the conse-
Petroleum and Energy in the evaluation of the quences of a possible phasing-out of peat;
electricity usage with quota obligation;
4. Analyse the historical development of the
3. Evaluation of whether there is sufcient availa system, in relation to electricity certicate
bility of feasible projects in Norway and prices, saved electricity certicates and the
Sweden and of the risk that the expansion rate phasing-out of plants; and
does not develop in a favourable way in order
to achieve the goals for 2020; 5. Analyse the functionality of the market, in
relation to turnover, liquidity, number of
4. Evaluation of advantages and disadvantages of market participants and market clearance,
determining the quota as a proportion of electricity and as necessary propose measures to
usage compared to determining it in TWh; and further improve the functionality.
You can read more about the mandates on the websites of the Swedish Energy
Agency and Norwegian Water Resou

rces and Energy Directorate.
31
32
Tables
Table 1. Quotas for Sweden and
Norway respectively

Year
2003
Quota Sweden
0,074
Quota Norway
2004 0,081
2005 0,104
2006 0,126
2007 0,151
2008 0,163
2009 0,170
2010 0,179
2011 0,179
2012 0,179 0,030
2013 0,135 0,049
2014 0,142 0,069
2015 0,143 0,088
2016 0,144 0,108
2017 0,152 0,127
2018 0,168 0,146
2019 0,181 0,165
2020 0,195 0,183
2021 0,190 0,182
2022 0,180 0,181
2023 0,170 0,180
2024 0,161 0,179
2025 0,149 0,176
2026 0,137 0,164
2027 0,124 0,151
2028 0,107 0,132
2029 0,092 0,113
2030 0,076 0,094
2031 0,061 0,075
2032 0,045 0,056
2033 0,028 0,037
2034 0,012 0,018
2035 0,008 0,009
Source: Act (2011:1200) concerning Electricity Certicates [Sweden]
LOV 2011-06-24 No 39: Act concerning Electricity Certicates [Norway]
33
Table 2.1 The estimated cost to electricity customers of electricity certicates in
Sweden (per kWh electricity) during 2003-2012
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Volume-weighted
annual average
price of electricity
certicates (Cesar,
NECS) [SEK]
201 231 216 167 195 247 293 295 247 201
Quota for Sweden 0,074 0,081 0,104 0,126 0,151 0,163 0,17 0,179 0,179 0,179
Average cost of
electricity certi-
cates to electricity
customers in Swe-
den (SEK 0.00/
kWh]
1
1,5 1,9 2,3 2,1 3,0 4,0 5,0 5,3 4,4 3,6
0,7
1) VAT and transaction costs may be added.
Source: Svenska Kraftnts accounting system (Cesar), Swedish Energy Agency
Table 2.2 The estimated cost of electricity certicates to electricity
customers in Norway (per kWh electricity) during 2012
2012
Everage cost of electricity certicates to electricity customers in Norway (SEK 0.00/kWh]
1

1) VAT and transaction costs may be added. The cost to Norwegian household customers is based on statistics from 77 out
of 106 electricity suppliers in Norway.
Source: Norwegian water resources and energy directorate
Table 3. Expected annual production for plants
within the 26.4 TWh goal during 2012
Energy source Norway [TWh] Sweden [TWh]
Biofuel - 0,77
Solar - 0,001
Hydro 0,34 0,01
Wind 0,02 2,06
Total 0,4 2,8
Source: Swedish Energy Agency. Norwegian water resources and energy directorate
34
Table 4.1 Expected annual production per area price for plants in Sweden
within the 26.4 TWh goal
SE1

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro 4
Wind 428
Total 432
SE2

Expected mean annual production
[GWh]
Biofuel 323
Solar 0,03
Hydro 2
Wind 724
Total 1 049
SE3

Expected mean annual production
[GWh]
Biofuel 207
Solar 0,91
Hydro 6
Wind 365
Total 579
SE4

Expected mean annual production
[GWh]
Biofuel 243
Solar 0, 25
Hydro -
Wind 544
Total 787
Source: Swedish Energy Agency
Table 4.2 Expected mean annual production per area price for plants in
Norway within the 26.4 TWh goal
NO1

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro 22
Wind -
Total 22
NO2

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro 44
Wind 5
Total 49
NO3

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro 108
Wind 11
Total 119
NO4

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro -
Wind 64
Total 64
NO5

Expected mean annual production
[GWh]
Biofuel -
Solar -
Hydro 104
Wind -
Total 104
Source: Norwegian water resources and energy directorate
35
Number of 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
plants [ea]
1
May-Dec
Biofuel, peat 87 105 118 125 131 142 156 163 170 180
Solar 1 1 2 3 4 9 11 13 31 61
Hydro 966 1 040 1 060 1 075 1 094 1 120 1 144 1 164 1 200 1 210
Wind 543 613 668 706 846 948 1 108 1 371 1 633 1 875
3
Total 1 597 1 759 1 848 1 909 2 075 2 219 2 419 2 711 3 034 3 326
Electricity 2003
production
May-Dec
renewable and
peat [MWh]
2004 2005 2006 2007 2008 2009 2010 2011 2012
Biofuel 4 218 276 7 670 770 7 925 790 8 593 538 9 049 308 9 599 311 9 765 983 11 162 850 10 305 639 10 571 205
Solar 4 6 5 20 19 129 212 275 529 1 027
Peat - 544 791 634 012 556 380 579 622 834 194 871 437 792 434 657 438 550 734
Hydro 963 637 1 968 325 1 799 446 2 018 577 2 195 320 2 607 348 2 441 624 2 611 044 2 698 130 3 144 187
Wind 455 642 864 546 939 125 988 340 1 431 644 1 995 846 2 490 409 3 485 933 6 093 169 7 159 745
Total 5 637 559 11 048 438 11 298 378 12 156 855 13 255 913 15 036 828 15 569 665 18 052 536 19 754 905 21 426 898
Installed capa- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
city [MW]
2
May-Dec
Biofuel, peat 3 157 3 185 3 424 3 643 3 676 3 451 3 892 4 056 3 924 4 138
Solar 0,008 0,008 0,011 0,036 0,043 0,309 0,369 0,557 1,001 1,601
Hydro 491 504 517 540 558 598 602 620 657 662
Wind 401 472 530 583 831 1 074 1 440 1 998 2 688 3 495
Total 4 049 4 161 4 471 4 765 5 066 5 123 5 935 6 674 7 271 8 296
Energy source Sweden [millions of electricity certicates] Norway [millions of electricity certifcates]
Biofuel 10,57 0,0
Solar 0,001 0,0
Peat 0,55 0,0
Hydro 3,14 0, 20
Wind 7,16 0,003
Total 21,42 0,20
Table 5. Electricity certicates issued in Sweden and Norway during 2012
Source: Svenska Kraftnts accounting system (Cesar respective NECS)
Table 6.1 Number of plants, installed capacity and electricity production per
energy source during 2003-2012 in Sweden
1) Number of plants issued more than 0 electricity certicates for each year.
2) Number of plants issued more than 0 electricity certicates.
3) 1,875 wind power plants consisting of 2,285 individual turbines.
Source: Svenska Kraftnts accounting system (Cesar); Swedish Energy Agency
36
Table 6.2 Number of plants, installed capacity and expected electricity mean
annual production per energy source during 2012 in Norway
128 249 34 62 62 59 243 251 361 558 735 809 Wind [MW]
479 4 17 18 6 19 54 19 48 22 71 173 Hydro [MW]
2 685 209 1 40 44 151 144 59 417 132 484 214 Biofuel [MW]
0,008 0 0 0 0 0,028 0,007 0,267 0,060 0,458 0,375 1,339 Solar [MW]
3 293 462 52 120 112 229 441 329 827 713 1 290 1 197 Total [MW]
2012 2014 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Energy source
262 545 60 135 134 112 655 634 973 1 523 1 945 2 137 Wind [GWh]
1 896 14 83 73 18 94 311 77 179 74 248 491 Hydro [GWh]
6 647 943 3 39 122 567 574 70 1 357 356 58 989 Biofuel [GWh]
0,040 0 0 0 0 0,023 0,010 0,221 0,053 0,243 0,358 1,167 Solar [GWh]
8 805 1 502 147 247 273 773 1 540 781 2 509 1 954 2 251 3 618 Total [GWh]
2012 2014 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Energy source
Number of plants Installed capacity [MW] Expected mean
annual production [GWh]
0 0 0
0 0 0
150 256 799,3
2 4,6 15,8
Source: NVE
Energy source
Biofuel
Solar
Hydro
Wind
Table 7. Phasing-out of plants (installed capacity) during 20122027
Source: Cesar, Swedish Energy Agency, Norwegian water resources and energy directorate
Table 8. Phasing-out of plants (electricity production capacity) during 20122027
1
1) For wind, hydro and solar, the expected mean annual production is shown. For biofuel, an annual average for the
electricity production entitled to electricity certicates over the last two years is shown.
Source: Cesar, Swedish Energy Agency, Norwegian water resources and energy directorate
37
Table 9.1 Cancellation of electricity certicates during 20032012 in Sweden
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
63,3 97,4 97,6 97,1 96,0 94,0 90,6 98,0 92,5 91,0 Electricity with
quota obligation
[TWh]
77 99,2 99,9 99,9 99,8 99,96 99,99 99,99 99,8 99,95 Quota obligation
fullment [%]
175 240 306 278 318 431 470 402 310 298 Quota obligation
fee [SEK/each]
37,8 40,6 40,9 40,5 42,8 41,6 36,5-37,4 39,7-40,6 40,3-41,3 ~ 42,3
2
Exempted elec-
tricity in electrici-
ty-intensive com-
panies [TWh]
1
182,8 14,4 3,1 2,3 8,3 2,3 0,7 0,8 9,5 2,6 Total quota
obligation fee
[MSEK]
3,5 7,8 10,1 12,4 14,5 15,3 15,4 17,5 16,5 16,3
3
Number of can-
celled electricity
certicates
[million]
0,074 0,081 0,104 0,126 0,151 0,163 0,170 0,179 0,179 0,179 Quota
1) A new regulatory framework for electricity-intensive industry was introduced on 1 January 2009
2) In 2012, the exempted quota obligation for electricity-intensive industry with a declaration obligation corresponded
to 40.8 TWh. Exemptions for industry with no declaration obligation amounted to approximately 1.5 TWh.
3) These gures may be changed slightly, as an option for the Swedish Energy Agency to decide to cancel more
electricity certicates than stated in the declaration was introduced on 1 January 2012. The surplus number of
electricity certicates are registered as locked and cancelled or given back to the owners once the decision has
come into legal force. Source: Act (2011:1200) concerning Electricity Certicates; Cesar; Swedish Energy Agency.
Source: Act (2011:1200) concerning Electricity Certicates; Cesar; Swedish Energy Agency
Table 9.2 Cancellation of electricity certicates in 2012 in Norway
2012
Electricity with quota obligation[TWh] 79,4
Electricity exempted from quota obligation [TWh] 37,3
Quota 0,03
Number of cancelled electricity certicates [million] 2,4
Quota obligation fullment [%] 99,97
Quota obligation fee [NOK/each] 267,8
Total quota obligation fee [MNOK] 0,22
Source: LOV 2011-06-24 nr 39: Lov om elsertikater, NECS, NVE
38
Glossary
Cancellation of electricity certicates entails an The declaration shall state the proportion of each
electricity certicate being returned to the govern- fuel out of the total energy input.
ment from the account of the market participant
with a quota obligation (Cesar in Sweden and NECS Electricity certicate is an electronic proof
in Norway). When an electricity certicate is cancel- issued by the Norwegian or Swedish government
led it is used up and cannot be sold or used to full that one megawatt-hour (MWh) of renewable elec-
the quota obligation again. Cancellation is done on tricity has been produced in accordance with the
1 April for the quota obligation of the previous year. Swedish Act (2011:1200) concerning Electricity
Certicates or the Norwegian LOV 2011-06-24
Cesar is the electronic accounting system for No 39: Act concerning Electricity Certicates
electricity certicates used by Svenska Kraftnt. respectively.
In order to be issued, buy and sell electricity
certicates, an market participant has to have Electricity-intensive industry has an
a certicate account with Cesar. electricity certicate cost only for that part of the
electricity not used in the manufacturing process.
Declaration by market participants with
quota obligations in Sweden shall be submit- Electricity producer with entitlement to
ted to the Swedish Energy Agency no later than electricity certicates is the owner of a plant
1 March for the previous calendar year. The decla- producing electricity from renewable energy sour-
ration shall state the amount of electricity sold, ces and peat . The plant shall be approved by the
electricity used and any deductions, for example Swedish Energy Agency or NVE respectively for
electricity usage in electricity-intensive manufac- the allocation of electricity certicates. By being
turing processes, auxiliary power, free power and approved by the electricity certicate system,
electrical losses. the producer is issued one electricity certicate
per megawatt-hour of electricity producer and
Declaration of electricity production in measured.
Norway from biofuel and peat shall be submitted
to Statnett no later than the 10th of the month Electricity production with entitlement to
following the production month. The declaration electricity certicates is electricity produced
shall state the proportion of each fuel out of the from renewable energy sources (and peat in Swe-
total energy input. den) that comply with the requirements of the
Swedish Act (2011:1200) concerning Electricity
Declaration of electricity production in Certicates or the Norwegian LOV 2011-06-24
Sweden from biofuel and peat shall be submitted No 39: Act concerning Electricity Certicates
to Svenska Kraftnt no later than the 15th of the respectively.
month following the production month.
39
Electricity supplier is a market participant course. In addition to these energy sources, there
supplying electricity that it or someone else are also geothermal energy sources, whose source
produces. Apart from those companies that is the interior of the Earth.
have electricity supply as their main objective,
market participants such as property companies Spot contract is a contract at market price
that deliver electricity to their customers may where the electricity certicates are transferred
also be included in the concept. from the seller to the buyer within one week.
Expected mean annual production is the Statnett manages the national grid for electrical
estimated annual production of electricity from power in Norway and has system responsibility for
renewables under normal operational circum- the Norwegian electricity supply. Statnett is the
stances. authority managing the accounting system for the
electricity certicate system in Norway and is
Forward contract is a purchase agreement in- responsible for the accounting system NECS.
tended to be completed at a set time in the future
at a price set when the contract was entered into. Svenska kraftnt (SvK) manages the national
grid in Sweden for electrical power and has
Industrial back-pressure power produc- system responsibility for the Swedish electricity
tion is a combined heat and power plant within supply. SvK is the authority managing the
industry used to produce process steam (heat) accounting system for the electricity certicate
and electricity simultaneously. system in Sweden and is responsible for the
Combined heat and power production (CHP) accounting system Cesar.
is the use of a thermal process, for example a
steam boiler, for the combined production of Quota obligation is the obligation to hold the
electricity and heat. right number of electricity certicates on 1 April
each year in relation to the market participants sa-
NECS is the electronic accounting system for les or usage of electricity during the preceding year.
electricity certicates used by Statnett. All mar-
ket participants with a quota obligation in Nor- Quota obligation fee must be paid by the
way must have their own account with NECS. market participant with a quota obligation that
does not cancel the number of electricity certi-
Renewable energy sources are those owing cates corresponding to its quota obligation.
energy sources that are recreated constantly The fee is calculated per electricity certicate
through the impact of the sun on Earth and on that has not been cancelled and amounts to 150
nature. They are therefore called renewable. per cent of the volume-weighted average price of
Water, wind and wave power are owing energy electricity certicates during the period as from
sources, as is tidal energy. Biomass is regarded as 1 April of the calculation year up to and inclu-
a solar-based energy source, and is therefore also ding 31 March the following year.
a renewable energy source, as is solar power of
40
ET 2013:19
Stockholm/Oslo 2013
Edition: 200
Graphic design: Granath Havas Worldwide
Printing: Arkitektkopia AB
Photo: www.sxc.hu
Since 1 January 2012, Sweden and Norway have had a common market for electricity
certicates. Electricity certicates provide support to producers of renewable electricity.
A common market for electricity certicates means that the renewable resources can be
used more efciently than if the countries were to work individually.
The annual report for the electricity certicate market is published by the Norwegian
Water Resource and Energy Directorate (NVE) and the Swedish Energy Agency.
With this publication, the NVE and the Agency wish to provide statistics relating to the
electricity certicate system and increase the understanding of how the system works.
The publication A Swedish-Norwegian Electricity Certicate Market - Annual Report 2012 is also published in
Norwegian and Swedish. You can download them or order them from www.energimyndigheten.se or www.nve.no