ELECTRICAL CERTIFICATES AND THE JOINT MARKET SWEDEN-NORWAY. Tomas Söderlund, TSEM AB Tallinn 20 October, 2011

Transcription

1 ELECTRICAL CERTIFICATES AND THE JOINT MARKET SWEDEN-NORWAY Tomas Söderlund, TSEM AB Tallinn 20 October, 2011

2 PRESENTATION IN THREE PARTS 1. Swedish certificate system 2. Joint market Sweden-Norway 3. Cooperation mechanisms

3 SUPPORT SYSTEMS IN THE EU (JANUARY 2011) Source: Ecofys

4 MAIN SUPPORT SYSTEMS IN THE EU Feed in tariffs Used by a majority of the Member States (MS). Producers of renewable electricity are guaranteed a fixed price [ /MWh] for electricity they deliver to the grid. Prices are fixed in order to reach a certain national volume of renewable production. Financed by taxes. Electricity certificate with quota obligation Used by several MS, including Sweden. Sweden started in Market based system were the Producers receive income by selling certificates. Buyers are the end users that are obliged to buy a certain quota. The price for certificates is set by the interaction between the supply and demand like an ordinary market. Volumes are fixed but prices are set by a market and varies. End user pay on their power bill to the supplier. Others as: Feed-in-premie Used in Denmark and the Netherlands. Producers receive income from selling to the market and a fixed price [ /MWh].

5 SEK/MWh Source: CERTIFICATE + POWER PRICE = TOTAL INCOME FOR THE PRODUCER Certificate price Power price

6 END USER COST FOR CERTIFICATES 1 öre/kwh 0.1 cent / kwh Administration (red) VAT (orange) Customer price certificates= price certificates x quotas (yellow) Source: Swedish Energy Agency

7 WIND POWER PRODUCTION INCREASE! Wind power Hydro power Bio fuel power Source: Swedish Energy Agency

8 JOINT MARKET SWEDEN - NORWAY Source: Swedish Energy Agency

9 EXPECTED RESULT FROM A JOINT MARKET Market function: Joint and larger market lead to higher liquidity. Increase power from renewable: From January, 2012 to year 2020 both countries aim to increase their renewable power production by 13.2 TWh (total 26.4 TWh). Investments: The market will determine where the renewable electricity production is being built, ie. was the most cost-effective to build a certain type of power generation. Energy Agency estimates that there are equally good prospects for wind power development in both countries. Prices: In the longer term, the Energy Agency's assessment is that a common market will not have a particularly strong impact on the certificate prices compared to existing solution. Future: If the joint market works as planned, further work on mechanisms for cooperation in renewable directive can focus on getting more countries into the joint market.

10 COOPERATION MECHANISMS Member States (MS) have national commitments to that EU as a whole will reach 20% by year 2020 renewable energy from for sources as wind power. Cooperation of mechanisms means that the EU's overall goal are reached not necessarily meaning that each individual MS achieve their own national goals. The Renewable Energy Directive makes it possible for member states to work together in order to achieve the EU s targets for renewable energy at a lower overall cost. 1 Billion euro per year can be saved through European cooperation using mechanisms. Source: Swedish Energy Agency

11 SWEDISH STUDY ABOUT COOPERATION MECHANISMS The Swedish Energy Agency has recently released a study (ER 2011:16) looking into three different ways for cooperation mechanisms: Joint support system as earlier mentioned Sweden Norway may include more countries in the future. Statistical transfer MS having a surplus of renewable production can sell this to those that are short. Probably mainly interesting for the target year Joint projects MS can sell share or whole projects to others. Special interest for off shore. Source: Swedish Energy Agency

12 JOINT PROJECTS FOR OFFSHORE Joint projects: Possibility to realize projects that currently are not profitable in the certificate system, such as offshore wind power using other countries support systems. Sellers: MS with off shore projects of interest that will have a surplus of renewable. Buyers: MS short of renewable power to fulfill target using their own support system. This can be more cost effective than developing them in your own country. Price: Appropriate pricing model depends on the type of cooperation mechanism is used. The final price is the result of negotiations between the MS. End user: According to the Energy Agency electricity prices for Sweden as a selling MS would decrease. Source: Swedish Energy Agency

13 CONCLUSIONS 1. Electrical certificates is one of the two most used support systems for renewable in the EU. Swedish system started in Joint certificate market Sweden-Norway will start January 1st, Other countries may join in the future. 3. Cooperation mechanisms as joint projects between MS can be one way to realizing more off shore windpower projects shows Swedish study.

14 INFORMATION IN ENGLISH Source: Swedish Energy Agency

15 INFORMATION ON THE INTERNET General information: Energimyndigheten/Swedish Energy Agency ( Prices: Svenska Kraftnät/Swedish National Grid ( ) Svensk Kraftmäkling ( Source: Swedish Energy Agency