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Nordic Energy Ways in Europe

With the report Nordic Energy Ways in Europe, the Nordic Action Group on Climate and Energy wishes to contribute to the Nordic policy process with a vision as well as proposals for concrete action. The work is based on business experience, academic research and expert analysis.

Summary
The Nordic countries can by acting together establish the Nordic region as a European and global model for cross-border cooperation and create an efficient energy system with very low greenhouse gas emissions. The region has a unique potential to lead the way towards clean, competitive and connected energy. This would not only counteract climate change and increase energy security. Such a strategy can strengthen the competitiveness of Nordic industries on global markets – creating growth and new employment. To achieve it there is a need for a stronger, more visible leadership of the Nordic governments joining hands with industry and academia.

1. A Nordic Energy Road Map
A Nordic Road Map would define smart ways to reach a Nordic, carbon free energy system with interim targets and policies that support this goal. The roadmap should incentivise the markets to pick the best available technologies at the lowest costs to ensure a competitive environment for our industry.

– High Efficiency Economy
For the Nordic region to become a leader in energy efficiency, we need a framework of public policies making it logical to invest in efficiency improvement measures and new technologies. Public initiatives and harmonised rules are vital to spread know-how and to show the way forward.

– A “Nordic Battery” and Renewable Energy Hub
The Nordic region has a capacity of both storage and surplus generation of renewable energy at a lower price than continental Europe. All the prerequisites are there to become a vital balancing factor, a “battery”, on the emerging European electricity market, in dire need of stable and renewable energy. Extension of interconnecting grids and smart technologies will make increased exports from the Nordic region possible and contribute to European climate and energy targets.

– Nordpool version 3.0
Nord Pool, the Nordic electricity market, should be upgraded to a smart grid able to balance supply and demand in real time for both industry and households. This will create stronger incentives for energy savings in the Nordic region, reduce electricity prices as well as provide a market model that could work for Europe as a whole.

2. A Nordic voice
Nordic countries need to develop a strong voice in support of an open, single European energy market, a wider EU use of carbon taxation and stricter application of the EU-ETS, combating the tendencies of creating costly national capacity mechanisms. A stronger Nordic voice should promote Nordic market design solutions across Europe. Governments and business, academia and non-governmental organizations should join forces in carrying these arguments forward.

3. A Nordic Energy Funding and Incentives Model
Since the price of carbon is absolutely vital for achieving climate goals, the Nordic countries should take the lead in pursuing a gradual shift from other taxes towards taxes on carbon emissions and other polluting activities or limited resources, to create incentives for green energy investments. To increase access to finance a strong umbrella function will be needed, a “Nordic Energy Financing Facility” to coordinate and facilitate large investments. Governments must act to avoid the present financial crises thwarting investments that are in fact profitable, urgent and beneficial for the Nordic economies as well as for Europe and the global climate.

4. Nordic Green Industrial Cluster
The Nordic countries already have a well-developed industrial base in the green energy sector with examples such as wind power in Denmark, offshore technology in Norway, transmission technology in Sweden and bioenergy in Finland. A Nordic Road Map, providing a stable and predictable business climate, can further strengthen such industries in developing new innovative solutions for the Nordic market as well as international export.

Download the report Nordic Energy Ways in Europe here