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Episode 08

Why Does Norway's Hydropower Count as Coal on Paper?

Norway sells the certificates that prove its hydropower is green, so on paper the power Norwegians buy gets Europe's leftovers: 29% coal, 26% gas, 19% nuclear.

2 November 20267 min readVideo 8:57

Norway's hydropower counts as coal and nuclear on paper because Norway sells the certificates that prove its power is renewable to buyers elsewhere in Europe. Each renewable megawatt-hour may be claimed only once, so the power Norwegians use without a certificate is given Europe's leftover mix. For 2025, that paper mix was 29% coal, 26% gas and 19% nuclear, in a country that made 89.9% of its electricity from water.

Watch the episode: Your 100% Renewable Power Might Be Norwegian Paperwork 8:57

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Two answers to "what powers Norway?"

In 2025 Norway made a record 161.8 TWh of electricity. Hydropower made 89.9% of it, wind 8.6%, thermal 1.3% and solar 0.2%. Norway produced no nuclear power at all.

Measured by what people actually used, 96% of Norway's consumption was covered by renewable production: 85% hydro, 10% wind, 1% solar. Its regulator, NVE, puts that physical mix at 9.4 g of CO2 equivalent per kWh.

NVE also publishes a second mix every year, the varedeklarasjon, for power sold without a certificate. Suppliers that don't buy certificates must refer to it. For 2025 it comes to 28.66% hard coal, 26.19% gas and 18.67% nuclear, with hydro at 9.05%. Fossil and nuclear together make 81%. Its emissions figure is 430.93 g of CO2 per kWh, about 46 times the physical one.

I assumed somebody had put a decimal point in the wrong place. Nobody had. NVE itself says the paper mix gives no information about the electricity Norwegians have in the socket. And the electricity doesn't care: power delivered with a certificate is physically no different from power without one. Norway does sell real electricity abroad too: in 2025 it exported 34.3 TWh and imported 11.5 TWh, a net export of 22.8 TWh. That is not where the coal comes from.

What is a guarantee of origin?

The paper mix is counting certificates. In 2001, an EU directive required member states to make sure the origin of renewable electricity could be guaranteed, with a guarantee of origin issued on request. Its purpose, in the current directive, is to show final customers the share of renewables in a supplier's mix.

Each certificate stands for 1 MWh. An average Norwegian household used just under 14,700 kWh of electricity in 2024, so one certificate covers about 25 days of a home's power. Norway has been part of the scheme since the EU's first renewables directive entered the EEA Agreement in 2006. Statnett issued 157,431,922 certificates in 2025, and Norway is the largest producer of them.

Here's the part I didn't expect. The certificate is traded separately from the electricity. It is issued, transferred and cancelled electronically, and can be used for transactions for 12 months after the power was made. Norwegian certificates not used within a year expire. Sending one to another country usually takes a couple of hours. The electricity doesn't have to go anywhere.

They are cheap. Nordic hydro certificates traded at about €1.41 to €1.63 per MWh in July 2026. In 2022, when Europe was short of hydropower, they hit record highs of about €10.

And Norway sells most of them. In 2025 it was a net exporter of about 119 TWh of certificates, ahead of Sweden and France. That is about three quarters of what Statnett issued, and about 5 times Norway's net physical export of electricity.

Where do the certificates go, and where does the coal come from?

Germany is by far the largest net importer, taking in about 172 TWh more than it sent out, followed by the Netherlands and Italy. A supplier there uses certificates to show its power as renewable; once cancelled, a certificate is removed from circulation and can't be used again. Those customers still get whatever their own grid delivers.

One rule turns Norway's water into coal on paper: the same unit of renewable energy may be counted only once. Once a buyer abroad has claimed it, Norway can't claim it too. So the power Norwegians use without a certificate needs another origin, and it gets the residual mix: the sources of the power not covered by certificates.

Picture all of Europe's power with a sticker on every megawatt-hour. Certificate buyers take the green stickers, and everyone else gets what's left. In 2025 that leftover pool, the European Attribute Mix, was 66.9% fossil, 19.9% nuclear and 13.2% renewable. Norway took 93.2 TWh from it to fill the gap left by the certificates it sold, and 29.68 TWh of that was hard coal. About 76% of Norway's consumption carried no certificate in 2025, so most of it gets that mix on paper.

The mix moves with Europe's power, not Norway's rivers. Norway's residual mix was 86.4% fossil in 2023, 76.1% in 2024 and 62.2% in 2025. On paper, Norwegian electricity got a lot cleaner in two years while the rivers kept doing what rivers do.

Iceland has the same problem. Its regulator says Iceland's calculated mix includes fossil fuels and nuclear, though its power is almost all renewable. From 2023, its national power company Landsvirkjun stopped issuing certificates automatically to wholesale buyers, saying it was no longer justifiable to hand over valuables of that size for free.

Can Norwegians buy the green label back?

Yes, from their supplier. Electricity bought with certificates in Norway rose from 34.6 TWh in 2024 to 35.0 TWh in 2025, about a fifth of what the country made, or roughly what 2.4 million typical homes use in a year. Even counting those, the total supplier mix came out at only 38.39% renewable.

2025	Physical consumption	On paper
Renewable share	96%	19.18% (residual mix), 38.39% (all suppliers)
CO2 per kWh	9.4 g	430.93 g (residual mix)

So the system sells Norwegians a certificate saying their power is renewable, which it mostly was anyway. For a household it's small: at July 2026 prices, a typical home's certificates would cost about €22 a year. For the power companies it's real money: an estimate cited in parliament in 2019 said Norway exports 80 to 90% of its guarantees, earning between NOK 0.5 and 2 billion a year.

That same 2019 proposal, from four Labour MPs, asked that Statnett leave the Association of Issuing Bodies and that Norwegian power use be documentable as renewable regardless of certificates. On 3 March 2020 the Storting rejected leaving, 72 votes to 28. Norway's consumer council has warned that "100 percent renewable" deals can mislead if people read them as their actual consumption, and that the name "guarantee of origin" itself can give a misleading impression.

Do certificates get new clean power built?

A 2022 paper in Nature Climate Change says corporate certificate purchases are unlikely to lead to additional renewable production. Across 115 companies, reported electricity-emission cuts were about 31%, and about 10% without the certificates. If the trend continues, the authors say, 42% of companies' committed cuts in power-use emissions won't result in real-world mitigation.

In Norway, much of the power behind the certificates is old: a large share of its hydropower comes from plants built before 1990, years before the 2001 directive. The certificate rewards them for having been built before anyone thought of it.

The system's defenders have a point. AIB says the residual mix stops renewable attributes sold to eco-conscious buyers from being double counted to everyone else, and calls it the only way to accurately verify power claims not backed by certificates. Without it, the same Norwegian water would be sold as green twice.

What "100% renewable" on a bill means

Next time a power bill says 100 percent renewable, it's describing a certificate. As NVE puts it, buying one doesn't change the electricity in your socket. What comes down the cable is whatever the grid has.

Would you pay extra for a label saying your power is green?

Sources

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