Nordic countries: renewable energy leaders
The Nordic countries rely on renewable energy sources in different proportions. Norway, with over 25,000 kilometers of continental coastline and a wide mountain area, accounted for one of the largest volumes of hydroelectricity produced globally. This energy source represented almost 90 percent of the country’s electricity generation in 2022. Hydropower is also the main electricity source in Iceland, which relies almost exclusively on water and geothermal energy for its power generation, and Sweden. Nuclear energy in the Nordics is only produced in Sweden and Finland. The latter has one of the largest nuclear energy contributions to its power supply in the world. In turn, the main power source in Denmark is wind energy. The country’s wind energy infrastructure is expanding, and Denmark is forecast to maintain a relevant position in the global offshore wind sector in the next decade. Denmark has set one of the most ambitious energy transition goals in the European Union: the Nordic country plans to generate 100 percent of its electricity from renewables by 2030.Nordic electricity market
Since the 1990s, most of the electricity transactions in the Nordics –excluding Iceland- have taken place in the deregulated spot power market managed by NordPool, which operates in the Baltics as well. In the Nordics, this day-ahead electricity market is divided into 12 pricing areas, to balance electricity supply and demand and avoid the congestion of the grid.One of the region’s sustainability targets is to become a stable net exporter of clean energy to other European countries to support the EU's energy transition. However, over the last decade, the only net electricity exporters in the Nordics have been Norway and Sweden.
Although the Nordics were hit by the 2022 energy supply crisis to a lesser extent than many European countries, their interconnection with the EU power market and the instability of an economy still transitioning from thermal to renewable energy production without sufficient energy storage and electricity transmission infrastructure resulted in general increased volatility in electricity prices in 2021 and 2022.
