Long‐term trends of Nordic power market: A review

Abstract

The Nordic power system will play an important role in a future carbon‐neutral European power market. In this study, 43 scenarios in 15 Nordic power market outlooks published between 2016 and 2019 are reviewed. Most scenarios see high future power prices with substantial correlation with assumed gas and emission quota prices. The underlying uncertainties in gas and emission quota prices are passed on to future power prices. The power prices are well above the cost of wind power, indicating that the wind deployment is either underestimated or might be largely dependent on non‐market factors. The models used for the outlooks have limited sector coverage and trade‐offs are made between computational resources and complexity. A set of recommendations for future outlook publications are proposed based on this review experience. Moving towards a low‐carbon future, more attention should be put to the demand side, especially with increasing importance of sector coupling and electrification. Also, to assess the profound uncertainties in the energy transition period, techniques besides scenario analysis can be applied. Explicit assessments on impacts of emerging topics, such as social oppositions to particular technologies and increased awareness of sustainability indicators besides clean energy, will add values for long‐term decision making in the power markets. Last but not the least, best efforts of clarity and transparency should always be ensured.