On Thursday December 2nd and Friday December 3rd the Nordic Working groups for Renewable Energy and the Electricity Market discussed recent developments and future possibilities at a conference in Copenhagen.

Substantial renewable energy development is needed in the Nordic region to meet EU’s goals of increasing the share of renewables in Europe’s total energy consumption to 20% before 2020.

This will require an extraordinary effort in the electricity-, heating- and transport sectors and is expected to result in a large surplus of energy in the Nordic electricity transmission system. The challenge of integrating renewable energy in the Nordic energy system and ensuring implementation was the main theme of Nordic Energy Cooperation 2010, held in Copenhagen on December 2-3.

Already above the European Targets
The region itself is well ahead of the development in EU, as a large part of the Nordic energy supply already comes from renewable energy sources. Despite this, the Nordics are committed to contributing to achieving the goals, set by EU’s new Renewable Energy Directive, by elevating the share substantially.

According to Bjarne Juul-Kristensen, chairman of the Nordic working group for renewable energy, the Nordic countries’ national targets for 2020 in the EU-Directive for renewable energy vary from a 30% share in Denmark to Finland’s target on 38% and Sweden’s target of approximately 50% of the final energy consumption, which will secure the top position in the EU. Norway and Iceland are negotiating RES – targets with EU, which will be even higher due to these countries very high current renewable energy shares.Target compliance can be ensured through use of national measures or through use of the co-operation mechanisms, which are made available in the EU-Directive. The Nordic working group for renewable energy is presently developing these mechanisms in order to investigate the possibilities for co-operation within the Nordic Countries and EU.

A challenging Integration
The integration of renewables into the Nordic transmission grid creates various challenges, one being the intermittent character of the renewable energy sources, i.e. wind- and solar power.

“The biggest challenge is that we are going from a production that is largely predictable, that responds to economic signals and takes place pretty much when we need it. Now we are moving towards an intermittent production, where the energy generation is controlled by nature and is non-responsive to economic signals,” says Niclas Damgaard, director at Pöyry Management Consulting in Stockholm.

Damgaard explains that the unpredictability and variations in power generation create a need for more extensive balancing of energy supply via interconnected transmission grids.

“Large production fluctuation can occur and we have to compensate for that with energy storage, with other production that serves as backup and also through transmission to a larger area,” Niclas Damgaard continues.
Substantial Power Surplus

Substantial Power Surplus
Lars Hansen from the Danish Energy Association described the outlook for the Nordic energy industry, based on a study conducted by Nordenergi in collaboration with Econ Pöyry and Thema Consulting. He explained the background for the expected energy surplus in the Nordic grid.

“Norway already has a share of almost 100% renewable energy in their electric system and in Sweden, nuclear power plants will still be producing power in 2020 with minimal production costs. The increase in renewable energy generation will be added on top of this, which means that both countries will have a massive surplus of energy and therefore have to export to other countries,” says Lars Hansen.

The report’s calculations were based on four different economic and political scenarios, that all gave clear indications of a substantial power surplus in the Nordic region towards 2020. This will result in lower prices for Nordic consumers, but also requires investment in the Nordic grid and further harmonization of the commercial energy market, prizing strategies and legislation.

Need for continued Development of the Nordic energy systems
Lars Hansen stresses the importance of looking at Nordic grid investment planning and policymaking regarding renewable energy in an international perspective.

“To ensure that we can export all this surplus energy, we need to continue to invest in cables and develop the transmission grid, not only between the Nordic countries but also towards Europe. If we do not succeed with that, a lot of the investment in developing the renewables will go to waste,” Hansen replies when asked about the need of expanding the Nordic grid.
Close cooperation with continental Europe is also essential in the future development of the Nordic transmission infrastructure. Niclas Damgaard mentions energy trading with Germany as an example.“We have to be aware that it might not be enough to expand the Nordic transmission to northern Germany, as we also need to get the energy further south to the consumers. Apart from that, we need to ensure a relatively continuous export, it is not going to be sufficient for us only to export energy when wind levels in northern Germany are low,” Niclas Damgaard continues.According to Juha Ruokonen, Manager at Greenstream, some of the European countries have already decided to rely on import of renewable energy to meet their 2020-targets, something that might present new possibilities for the Nordic energy market.“Italy is planning to purchase the renewable energy production as well as Luxembourg so they are looking at the opportunities from a buyer’s perspective. I think it is worthwhile to start a dialog with these countries and create a common ground for collaboration in the future,” says Ruokonen.

Finland’s New Presidency
The last speaker at the conference was Petteri Kuuva, Director of the Renewable Energy Division in the Ministry of Employment and the Economy in Finland, who spoke on behalf of the Finnish presidency of the Nordic Council of Ministers and the Nordic Energy Collaboration in 2011.“The headline for Finland’s presidency is ‘The Nordic Region – A Green Climate Leader’ and dealing with climate change is the most important objective of our programme. The Nordic Countries must actively show initiative regarding climate issues, we must lead the way, much like we have done with the common Nordic energy market,” Petteri Kuuva said in his speech, before thanking the organisers, speakers and participants at the conference.By Páll Tómas Finnsson

Further information about discussion on electricity market integration at the conference.