There is a clear technological and economical pathway for the Nordic region to push towards a more near carbon-neutral energy system in 2050. The Nordic countries want to send a strong signal to the global community that the ambitious aims of the Paris Climate Agreement are achievable. This is the conclusion from the; Nordic Energy Technology Perspectives Report 2016 – from The International Energy Agency and Nordic Energy Research.
The ambitious pathway outlined by the Nordic countries, who specifically wants to act in four key areas:
- Strengthen incentives for investment and innovations in energy technologies.
- Boost European cooperation on grid infrastructure and electricity markets.
- Reduce process-related emissions in industry
- Accelerate transport decarbonisation
1.Strengthen incentives for investment and innovation in energy technologies.
The Renewable Energy Policy should accelerate the roll-out of key flexibility technologies and incentivise their utilisation for flexibility through market mechanisms and regulation. Markets must also adequately compensate flexibility services such as demand response in industry and buildings, as well as the flexible operation of small power plants. Information technology (IT) infrastructure (smart meters) and IT platforms (consumer Apps or control systems) will be important in achieving a rapid penetration of these flexibility services.
2. Boost European cooperation on grid infrastructure and electricity markets.
Coordinated effort to strengthen domestic grids and install new transmission lines is needed to establish the future Nordic and European electricity system (‘The Green Battery Strategy’). Regional collaboration on infrastructure planning is needed to ensure optimal investments and avoid bottle-necks in the grid. Coordination among Nordic governments is vital to ensure that policy accelerates technological and regulatory progress in order to reduce total costs. Cooperation in reforming the common Nordic electricity market to allow greater flexibility and accommodate higher shares of variable renewables will also be important.
3. Reduce process-related emissions in industry.
The Renewable Energy Policy should take steps to ensure long-term competitiveness of Nordic industry while reducing process-related emissions. More variable and potentially higher electricity prices will put additional pressure on energy-intensive industry in the Nordic region, stressing the need to step up low-carbon industrial innovation. Governments should act to reduce the risk of such investment and use public funding to unlock private finance in areas with significant emission reduction potential.
4. Accelerate transport decarbonisation.
Even as Nordic countries pursue different technology strategies in parallel, they should not wait to draw on the wide range of available policy instruments to stimulate fuel efficiency, low carbon technologies and shifts to more efficient transport modes. Governments should build upon positive experiences with measures such as congestion charging in urban settings, differentiated vehicle registration taxes, bonus-malus regimes, and altered parking fees, while also stepping up investments in infrastructure for cycling, public transport and rail. Policies should also incentivise modal shifts from road freight to sea and rail, and from cars to public transport and cycling.
Nordic and European collaboration on energy policy can play a role to reach the ambitious aims of the Paris Climate Agreement.