A presentaion held by Mr Ola Alterå, Senior Advisor to Global Challenge at a meeting with the board of ECF, the European Climate Foundation, in Stockholm on the 24th of September 2013

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Nordic Energy in Europe
– a way forward
Clean, Competitive and Connected
by
Nordic Action Group on Climate and Energy
European Climate Foundation
24 September 2013

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Nordic Action Group
on Climate and Energy
Hördur Arnarson CEO, Landsvirkjun, Iceland
Carl Bennet Chairman, Getinge, Sweden
Ingrid Bonde CFO, deputy CEO Vattenfall , Sweden
Anders Eldrup Former CEO DONG Energy, Chairman Copenhagen
Cleantech, Denmark
Henrik Ehrnrooth Chairman, Caverio, Pöyry och YIT, Finland
Ulrik Federspiel Executive Vice President Haldor Topsoe A/S,
Denmark
Anders Olsson Deputy CEO E.ON Norden, Sweden

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Background and assumptions
• The Nordic countries are comparably far in
transition to sustainable energy
• Nordic governments aim at Zero emission targets
for 2050 (IEA interpretation)
• This will necessitate very large investments in
renewables, transmission, energy efficiency and
transport systems
• A proactive, bottom-up approach from Nordic
Business can lead to competitive strength for the
Nordic region

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Main message
• The Nordic countries have a story to tell in the EU
– especially the trans boundary electricity market
• We can do more - and it is more efficient if cooperating
closer
• There is a potential for further increase in renewable
energy in the Nordics, at competitive prices
– a portfolio with potential for net export and
balancing electricity market in northern Europe
• The transition will need a gradually higher price on CO2
• Nordic Green Industrial Clusters can develop further
and grow

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Content
1. A Nordic Energy Way
2. A Nordic Energy Road Map – we can do more
– High efficiency/Low Energy Economy
– A Nordic Battery and Renewable Energy Hub
– Nordpool 3.0
3. A Nordic Voice – there is a story to tell
4. A Nordic Funding Model and Incentives
5. Nordic Green Industrial Cluster

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2.1 High Efficiency Economy
High potential. Many measures already profitable but do not happen...
• Transport sector
• Housing sector
• Industry and Service Sector
Recommendations
• Take lead in early market for electric cars.
• Pioneering region in electrification of roads.
• Nordic building standards, gradually strengthened towards zero.
• Use the EU compulsory energy declaration as a basis for targets
based on Nordic best practice.
• Nordic voluntary scheme for energy improvements for industries,
including tax incentives and sharing of know-how.

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2.2 Nordic Battery and Renewable
Energy Hub
Capacity to export renewable energy (electricity, maybe biofuels)
as well as a balancing region on the European markets
Recommendations
• Increase integration across Nordic renewable support
schemes
• Utilize co-operation mechanism within the EU RES directive
• Technology specific support only for non mature technologies
• New transmission investments within Nordic counties and to
continental Europe

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A thought experiment
• Assume export of 50-100 TWh of renewable electricity (IEA/Nordic
Energy Research.)
• Yearly export earnings of € 50-100 million.
• Reducing European CO2 emissions by 40-90 million tonnes
(replacing coal condensing power)
• Reduced cost for European climate policy
• Increase potential for wind and solar in northern Europe.
• Direct yearly cost benefits for Nordic business and households
relative to continental Europe
• Industrial development, improved investment climate,
innovation, jobs creation, stronger competitiveness etc. in the
Nordic countries.
Export electricity price the lowest assumption among IEA main scenarios, USD 136/MWh

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2.3 Nordpool 3.0
The worlds first and most successful multinational
power market. 3.0 comes with flexible supply,
export of surplus and flexible demand in real
time.
Recommendations
• Design the Nordic market to retain and develop
flexibility.
• Promote Nordic solutions for Europen market
design.
• Strengthen R&D efforts to adapt Nordpool to the
emerging energy scene.

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3. A Nordic Voice
Nordic governments and business should join forces
to develop a strong voice for
• …an open, single, interconnected European
electricity market
• …the economic benefits for all by avoiding
isolated, national capacity markets
• broader use of taxation on carbon and stricter
application of the EU-ETS
• …Nordic market model design for use in the EU.

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4.1 Increased price on carbon
The key is carbon pricing.
Recommendations:
• A wider use of carbon taxation within the EU
as well as a stricter application of the EU ETS
in order to raise the end price for using fossil
fuels
• Nordic countries can show the way by
pursuing a further shift to tax on energy and
carbon emissions.

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4.2 Investment opportuntities
Recommendations
• Bring together a large number of national and
Nordic entities under a “Nordic Energy
Financing Center”, not to replace present
institutions but to take a leading role in
coordinating the present institutional set-up.

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4.3 Nordic Energy Research
• Bring together smaller actors under a common
and strengthened head institution, for
example Nordic Energy Research, which could
then more effectively perform its tasks as a
contributor and coordinator.

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5. Nordic Energy Green Clusters with
potential
• Wind power - focus on cold climate, off shore and
forested areas.
• Climate efficient biofuels from indigenous sources.
• Electrification of transport including vehicles, charging
infrastructure and electrification of roads.
• Combined operation of heat and electric power
systems, including efficient use of heat pumps.
• Smart electrical grids combining IT with power.
• Solar power solutions.

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Possible following steps
• Dialogue with governments and other stake
holders
• Contribute to a (northern) European discussion
• Deepening of some proposals.
– the industrial perspectives
• Studies of economic benefits, quantified?
Possibly even modelling of connected grids (including heat
grids)?

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Swedish Climate Policy Update
• On track to 2020 targets
• Roadmap to zero net emissions 2050
– not yet any targets between 2020 and 2050
• Vehicle fleet independent of fossil fuels by
2030 – proposed strategy in december
• International initiatives
– short lived green house gases
– climate economy – the benefit of action