The use of renewable energy cooperation mechanism: Evidence from hydropower projects in Norway.

Properly designed, renewable energy support schemes have the potential to ensure a given quantity of new, renewable energy to the least cost for society. However, non-economic barriers may prevent the best projects being realized first. Based on a survey of 447 planned hydropower projects in Norway, we examine the potential for and barriers against Norwegian hydropower within the joint Norwegian-Swedish market for green certificates. Investors expect most of these projects to be profitable with manageable risk and access to funding. However, problems getting access to the transmission net and entrepreneurial services and problems raised by external stakeholders in the process from planning to installation, may prevent their projects from being realized within the deadline set by the support scheme in 2020. The expectations vary across project types, and all else equal, unexperienced investors are more optimistic than experienced investors. We conclude the paper by examining measures to improve the cost efficiency of the scheme.