Quota system

Updated: 17.01.2019

Author: Oskar Vågerö

Act No. 2011:1200 obliges electricity suppliers, certain electricity consumers and energy-intensive companies to annually acquire renewable energy certificates in due proportion to their electricity sales and their consumption by a set date (Chapter 4 §§ 1 and 4 Act No. 2011:1200). Furthermore, the Act stipulates the conditions in which owners of renewable energy generation plants may acquire electricity certificates (Chapter 2 §§ 1-13 Act No. 2011:1200).

Eligible technologies

In general, all renewable energy generation technologies are eligible for the quota system (Chapter 1 § 2 No. 2 Act No. 2011:1200). 
The following conditions apply to all renewable energy generation technologies except hydro-power plants:
If a plant's electricity output has been increased following an investment that took place after 2006, only the additional output is eligible (Chapter 2 § 8 Act No. 2011:1200).
Electricity certificates may be awarded for energy generation from existing plants for which certificates were issued before only if the plant was extensively renovated or other investments were made in the plant that give reason to consider it a new facility (Chapter 2 § 9 Act No. 2011:1200). The requirements for such investments are specified in § 7 Regulation No. 2011:1480.

Wind energy

Eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200).

Solar energy

Eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200).

Geothermal energy

Eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200).

Biogas

Eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200; § 2 Regulation No. 2011:1480). 

Hydro-power

  • Electricity from wave energy is fully eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200).
  • Other forms of hydro-electricity are eligible only if generated by plants which
    • were commissioned after 2002,
    • were in operation on 1 May 2003 and have a capacity of no more than 1500 kW, or 
    • were taken out of operation before 1 July 2001 and were recommissioned after 2002 after major reconstructions or other investments so that the plant may be considered new (Chapter 2 § 5 1 Act No. 2011:1200)
    • For existing plants with a capacity exceeding 1,500 kW, whose capacity was upgraded with an investment that took place after 30 April 2003. Only the additional output is eligible (Chapter 2 §§ 5 and 8 Act No. 2011:1200). 
  • Plants not covered by these definitions may qualify only if changes in the legal framework have made their profitable operation impossible, or if they have a capacity of 15 MW or less and have become unprofitable after renewal (Chapter 2 § 6 Act No. 2011:1200).

Biomass

Eligible (Chapter 1 § 2 No. 2 Act No. 2011:1200; § 2 Regulation No. 2011:1480). 

Amount

Amount of quota and period of application

The quota shall be calculated by multiplying the number of megawatt hours of electricity sold or used during the calculation year with the quota obligation for the calculation year.

The quotas for the period from 2018 to 2045 have been set as follows (Chapter 4 § 4 Act No. 2011:1200):

Obligation period

Quota obligation per MWh of electricity sold or consumed

2018

0.299

2019

0.305

2020

0.288

2021

0.263

2022

0.267

2023

0.271

2024

0.270

2025

0.272

2026

0.280

2027

0.293

2028

0.298

2029

0.304

2030

0.299

2031

0.284

2032

0.268

2033

0.245

2034

0.221

2035

0.206

2036

0.187

2037

0.176

2038

0.154

2039

0.132

2040

0.110

2041

0.088

2042

0.066

2043

0.044

2044

0.022

2045

0.011

 

The quota shall be calculated by multiplying the number of megawatt hours of electricity sold or used during the calculation year with the quota obligation for the calculation year (Chapter 4 § 4 Act No. 2011:1200). 

Adjustment of quotas

The procedure for changing the quota levels is not defined by law. For this reason, it will be necessary to amend the act governing the quota obligation.

Number of certificates according to technology

One certificate is issued for every MWh of electricity produced, regardless of the generation technology employed (Chapter 3 § 2 Act No. 2011:1200).

Fees and penalty charges

Quota obligation fine. Obligated persons that fail to satisfy their quota obligation shall pay a quota obligation fine. Each certificate not invalidated carries a fine of 150% of the weighed, average certificate value during the applicable obligation period (Chapter 6 § 1 Act No. 2011:1200). 

Annual average certificate price

According to the Swedish Energy Agency, the average price per certificate (per MWh) was SEK 124 (approx. € 12.1) in 2017. 

Addressees

The quota obligation applies to

  • companies supplying electricity to the consumers,
  • electricity consumers who use electricity they have produced. The electricity consumed must exceed 60 MWh per year and have been produced in a plant with an installed capacity of more than 50 kW, 
  • electricity producers outside of a grid-concession, if the production amount to more than 60 MWh and if the electricity in a professional way is distributed to users in the same grid, 
  • electricity consumers, for electricity they imported from or purchased on the Nordic electricity market, and
  • registered energy-intensive companies

        (Chapter 4 § 1 Act No. 2011:1200).

        Procedure

        Process flow

        • Issue of electricity certificates.
          • Applications must be directed to the supervising authority (Chapter 2 § 1 Act No. 2011:1200).
          • The supervising authority authorises the plant (Chapter 2 § 1 Act No. 2011:1200).
          • The electricity is measured and reported to the account management authority (Chapter 2 § 3 Act No. 2011:1200).
          • The account management authority assigns electricity certificates (Chapter 3 § 2 Act No. 2011:1200).
        • Calculation of quota obligation.
          • Those obliged to satisfy a quota shall register with the supervising authority (Chapter 4 § 6 Act No. 2011:1200).
          • Until 1 March each year, the obligated persons shall declare to the supervising authority the electricity sold. This quantity will be the basis for calculating the quota obligation (Chapter 4 § 3 Act No. 2011:1200)
          • The obligated parties shall, by 1 April, possess the defined amount of electricity certificates to be invalidated (Chapter 4 § 2 Act No. 2011:1200).
          • The account management authority invalidates the electricity certificates (Chapter 4 § 10 Act No. 2011:1200).
        • Quota obligation fine. If a producer fails to satisfy his quota obligation, he shall pay a fine (Chapter 6 § 1 Act No. 2011:1200).
        • Obligation to pay a fee. The registration and transfer of a certificate to the account management authority is subject to a fee (Chapter 6 § 7 Act No. 2011:1200).
        • Appeal. Appeals shall be made only against the above-mentioned measures, which are carried out by the supervising and monitoring authorities. Appeals shall be lodged with the general administrative court (Chapter 8 §§ 1-4 Act No. 2011:1200).

        Competent authority

        The authorities in charge of the quota system are the Swedish Energy Agency, which monitors the procedure, and the Swedish Transmission Grid Operator (Svenska Kraftnät), which manages the certificate accounts (§ 3 Regulation No. 2011:1480).

        Eligibility period

        Solar and geothermal plants commissioned prior to 1st May 2003 have become ineligible at the end of 2012 (Chapter 2 § 7 no. 1 Act No. 2011:1200); Certain plants using wind or hydro energy, biogas or biomass and commissioned prior to 1 May 2003 have become ineligible at the end of 2012 or 2014 (Chapter 2 § 7 no. 1 Act No. 2011:1200).

        The eligibility of plants commissioned after this date will end after 15 years of support (Chapter 2 § 7 Act No. 2011:1200). In any case, eligibility will cease at the end of 2045 at the latest (Chapter 2 § 11 no. 2 Act No. 2011:1200).

        International applicability

        International certificate trade

        According to the Swedish Energy Agency, Sweden and Norway introduced a common electricity certificate market on 1 January 2012. The producers of RES electricity receive certificates in their own country. These certificates can be traded on both the Swedish and Norwegian markets (Chapter 1 § 5 Act No. 2011:1200).

        Distribution of costs

        Consumers

        According to the Energy Agency, the costs are borne by the consumers.

        Distribution mechanism

        According to the Energy Agency, electricity suppliers pass on the costs arising from the quota obligation to the consumers by adding a surcharge to their services. Since the introduction of the Swedish-Norwegian common certificate market, the costs of the quota obligation have been shared by the electricity consumers in both countries.

        Sweden
        Electricity
        Heating & Cooling
        Transport

        Further information

        Basic information on legal sources