Electricity certificates are a way to financially support new renewable electricity production in Norway and Sweden. The certificate system is market-based and increases production from renewables in a cost-effective way. One certificate is allocated for every new megawatt hour (MWh) produced renewable electricity.
Electricity certificates make it more profitable to invest in new renewables such as hydropower, wind power, solar power and bioenergy. Electricity consumers pay for this development, as the cost of electricity certificates is included in the electricity bill. The Norwegian Water Resources and Energy Directorate (NVE) governs the system for electricity certificates. The Act on Electricity Certificates and the Regulation on Electricity Certificates legally regulate the system.
Since the 1st of January 2012, Sweden and Norway have had a joint market for electricity certificates. This collaboration will continue until the end of 2035. The aim of the collaboration is to increase total renewable electricity production from by 28.4 TWh in 2020. 28.4 TWh equals half the annual Norwegian household consumption.