Sweden, Norway seal end of joint green subsidy scheme in 2035

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OSLO (Reuters) - The Norwegian and Swedish energy ministers on Friday signed off on an amendment to their joint green power support scheme, which effectively closes down the system at the end of 2035, 10 years earlier than planned.

The amendment formalises an earlier end date from the Swedish side, aligning it with its westerly neighbour. Under the new terms, the system will close to new participants from January 1, 2022.

Technological and market advancements had resulted in a faster and bigger build out of renewable electricity than the electricity certificates system was designed to support, said Norway’s oil and energy minister Tina Bru at a press conference in Oslo.

“It has created - on a market basis - more and cheaper renewable energy than any other country’s system worldwide,” Swedish energy minister Anders Ygeman added.

Both highlighted the “great success” of the joint system. It was introduced in 2012 with a target to expand renewable power generation by 24.4 TWh by 2020, with Norway to finance 13.2 TWh and Sweden 15.2 TWh, irrespective of the location of the assets. Sweden later said it would fund another 18 TWh until 2030, to be built domestically.

Latest estimates expected that the overall 46.4 TWh target would be surpassed next year, with some 60 TWh of accumulative new capacity, Bru said.

Last year saw the greatest ever annual addition of 7.5 TWh - with wind power representing the largest share, according to the latest monitoring report.

The scheme issues one certificate per megawatt hour to producers of predominantly wind and hydropower over a 15-year period. Power suppliers are required to purchase an annual quota, with certificates rendered and then cancelled once a year, creating fresh annual demand.

Electricity certificates last traded around 6.25 Swedish crowns ($0.7130) per megawatt hour (MWh).($1 = 8.7655 Swedish crowns)

Reporting by Nora Kamprath Buli; Editing by Kirsten Donovan