Wherever the Wind blows - A comparative analysis of Wind Power diffusion in the bilateral green certificate system between Norway and Sweden

Abstract

The European Union (EU) has decided to transform the energy sector into renewable energy technologies in order to reduce greenhouse gas emissions. Sweden and Norway have established a bilateral green certificate system to jointly reach the emission targets stated by EU. To encompass different renewable energy sources for electricity in a country s energy system firms need to overcome path-dependency. This thesis explores in a comparative study how different framework conditions affect the diffusion process of wind power in Norway and Sweden. The functions of technological innovation system approach have been used to unveil what factors induce and hamper the diffusion process. Factors affecting wind power diffusion have been further corroborated by empirical data from interviews of energy companies. Main findings show that unequal framework conditions generate a higher share of wind power in Sweden than in Norway. The share of wind power in Norway has increased with the establishment of the bilateral green certificate system but the challenges with path-dependency remains. The characteristics of the electricity systems, energy policies, tax regimes, grid capacity and legitimacy are substantial to the diffusion process. The main findings support previous studies done of the bilateral green certificate market by exploring framework conditions. This thesis argues around what measures need to be taken to level out the playing field of wind power investments in Norway.