Electricity certificates

The primary factor affecting wind power in Sweden is the national electricity certificate system that took effect on May 1, 2003 and which is intended to promote development of renewable energy.

The electricity certificate system is a market-based support to favor a build-out of electricity production from renewable sources or peat. Producers approved by the Swedish Energy Agency, such as Rabbalshede Kraft, receive one electricity certificate for each megawatt of renewable energy produced. The certificates are then sold to electricity sales companies and certain electricity-intensive industries, which are obligated to purchase certificates corresponding to a certain proportion or quota of their total electricity sales or consumption. The certificates are purchased and sold on the electricity exchange via brokers, and the cost is charged to the end electricity consumer via the electricity bill. The cost for electricity certificates for electricity consumers is in the interval from SEK 0.05 to 0.07/kWh, while producers of renewable electricity were paid about SEK 0.30/kWh during the preceding year.

Thus far, electricity certificates have been necessary to motivate investment in renewable electricity, since Swedish electricity prices have most often been at a level that is not sufficient to cover costs and provide an acceptable profit. With increased electricity prices and improved wind turbines that are gradually becoming increasingly less expensive in relation to how much electricity they produce, this support may be reduced in the future.

The government submitted a bill in March 2010 with the objective of increasing the proportion of energy originating from renewable energy sources to 25 TWh by the year 2020, compared with 2002. Measures to achieve this goal include new electricity certificate quotas and an extension of the electricity certificate system from 2030 to 2035. The Energy Agency has concluded that the quota level should be increased to stimulate expansion. At the same time, the Energy Agency deems that the cost for electricity consumers through the electricity certificates will remain at the same level as today.