The Swedish support system for renewable electricity is inefficient

Sweden has decided to increase electricity production from renewable energy sources such as wind, water and biofueled thermal power. Green certificates are the primary support system for renewable electricity: Generation companies receive one certificate for every MWh of approved renewable electricity they produce. The certificates are sold primarily to retailers who are legally bound to cover a share of final consumption by certified electricity. Certificate revenue adds to the income from selling the electricity itself, thereby stimulating the production of renewable electricity. This paper reexamines the Swedish support system and address problems associated with the certificates and the permit processes surrounding investments in renewable electricity.