Joint support scheme as solution to the post 2020 problem
- the tradable green certificates of Sweden and Norway
Lise-Lotte Pade, DTU Management Engineering, Technical University of Denmark, +45 4677 9154,
Lise Skovsgaard, DTU Management Engineering, Technical University of Denmark, +45 4677 5100,
Henrik K. Jacobsen, DTU Management Engineering, Technical University of Denmark, +45 4677 5100,
Overview
With the RES Directive 2009/28/EC (European Commission 2009) the EU commission has opened for the possibility for the EU countries to jointly reach their RES targets for 2020. The directive contains three different mechanisms: statistical transfer, joint projects and joint support schemes. Where statistical transfer is a simple ex-post transfer of RES credits, the joint project gives countries with relatively scarce RES resources (user country) the opportunity to develop and invest in RES in countries with relatively abundant RES recourses (host country). Finally, in the case of joint support schemes countries – two or more – agree on a common support scheme, either covering the entire RES portfolio or only specific technologies or regions. However, only few countries actually have engaged in cooperation due to a number of barriers one of which has been the lack of targets post 2020 constituting an uncertainty regarding the future value of RES. Recently the European Commission have suggested targets for 2030 (COM(2014)15) where an overall target for the EU of 27 %. However, the Commission also state that national targets will not be specified therefore not eliminating the uncertainty regarding the value of future RES. In this article we analyse a specific set up with joint support schemes as a solution to the problem of lacking future targets. We analyse the issue of preserving the cheap RES resources for own future target fulfilment and investigate how the common tradable green certificate system with Sweden and Norway as participants addresses these issues. Finally, we consider if joint support schemes can be implemented to a larger scale in the EU based on the solutions in the Swedish-Norwegian case.
Methods
We set up an analytical model to analyse the preconditions for engaging in cooperation where we distinguish between the compliance cost for the participating countries with and without cooperation. Furthermore, we analyse how the post 2020 problem affects compliance costs of the host country and the user country. Taking this into consideration we analyse how the Norwegian-Swedish green certificate scheme take these issues into account. Finally, we use the results from the Norwegian-Swedish-case to discuss the extent to which the Norwegian-Swedish green certificate scheme can be generalised for the entire EU.
Results
Norway and Sweden divide the obligations such that each country has half of the obligations and thus the total support payment is divided in half. The extent to which the two countries live up to the anticipated incentives to engage in cooperation depends on the expected development in the two countries.
The extent the Swedish-Norwegian set-up is expected to be able to be spread to the rest of EU seems limited. Norway and Sweden are on many parameters very similar countries with integrated electricity markets and similar shares of renewables in their electricity system with comparable potentials for renewable energy.
Conclusions
In this paper we have analysed what we refer to as the post 2020 problem and how the 2020 targets, 2030 targets and cooperation affect each other. Furthermore, we describe the Swedish-Norwegian tradable green certificate scheme in order to find out how the two countries have taken these uncertainties into account and the extent to which the two countries live up to our expectations in terms of incentives to engage in cooperation.
These characteristics are not translatable for the entire EU and on the basis of the Norwegian-Swedish tradable green certificate scheme it is difficult of conclude that the EU should implement such a system.
References
COM(2014)15: A policy framework for climate and energy in the period from 2020 to 2030
Lag (2011:1200) om elcertifikat
LOV 2011-06-24 nr 39: Lov om elsertifikater"
Beurskens L.W.M., et. al. (2011) Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States - Covering all 27 EU Member States - with updates for 20 Member States, November 2011, ECN
Pade Hansen LL, Klinge Jacobsen H, (2012) Barriers and Critical Success Factors for the Implementation of Cooperation Mechanisms, RES4Less Deliverable 3.1, 28p.
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC. OJ L 140/16-62.