The study identifies key drivers including the expansion of firm capacity, investment in renewable energy, the availability of interconnector capacity, and potential trade restrictions.

Based on scenario analysis towards 2035, the report assesses how different regulatory outcomes could shape the Nordic electricity market.

The analysis points to several key findings:

• Less firm capacity increases price volatility: A shortfall in firm capacity in neighbouring markets, particularly if Germany fails to meet its gas capacity targets, would lead to more frequent price spikes, including in Nordic bidding zones, especially those closely connected to continental Europe.
• Offshore wind could sharply lower prices: If Germany, Great Britain and the Netherlands deliver on ambitious offshore wind targets without corresponding demand growth, Nordic electricity prices could fall by more than 50 percent in some scenarios. Expansions in solar and battery capacity have more moderate, though still significant, effects.
• Trade restrictions risk net welfare losses: Reduced interconnector availability or limits on cross-border trade would lower prices for Nordic consumers but reduce revenues for generators even more, particularly in net exporting countries such as Sweden, resulting in an overall welfare loss.
• Tariffs would curb trade and revenues: Transmission tariffs or surcharges would dampen cross-border flows and significantly reduce congestion revenues, even if the impact on average electricity prices remains relatively limited.
• German bidding zone split could lower Nordic prices: A division of the German bidding zone could reduce prices in northern Germany and, through market coupling, also in the Nordics, though to a lesser extent.

The findings underline the close integration of European electricity markets and how decisions taken outside the Nordics can have direct and far-reaching effects on the region’s power market.

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The analysis shows that clear political targets, stable and transparent regulatory frameworks, and better coordination between authorities are critical to reducing risk, delays and costs. The report also highlights the importance of early access to site and environmental data, streamlined consultation processes and support schemes aligned with policy ambitions.

Drawing on Nordic experience and international best practice, the report presents seven concrete recommendations to accelerate offshore wind deployment. It provides a practical basis for action for policy-makers, public authorities and companies working to scale up offshore wind in line with climate, energy security and industrial objectives.

Offshore wind energy capacity in Europe, current and under construction

Cumulative offshore wind energy capacity in Europe, in operation and under construction, 1995–2027

Technical potential for offshore wind energy capacity in Europe, in GW

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The analysis maps initiatives that build local demand‑side flexibility (DSF) and includes ten case studies across all Nordic countries. These cases cover a range of smart appliances and flexibility sources, from batteries and EV chargers to heating systems and commercial loads. Each study highlights barriers and enablers for effective use of DSF, showing how smart appliances can be integrated into markets and grid operations. Together, they offer insights into how local flexibility can be scaled to strengthen energy systems and support long‑term climate goals.

The case studies were chosen with clear criteria. They had to focus on flexibility from different smart appliances. The solutions also needed to show a certain level of maturity. We looked for innovative mechanisms that used smart appliances in new ways. The cases should cover a mix of products, flexibility sources, and providers. Finally, all Nordic countries had to be represented.

The 10 case studies

1. Byggfleks (Norway), 2019-2023. .
2. Battflex (Norway), 2019-2024.
3. Norflex (Norway), 2019-2023.
4. Sthlmflex (Sweden), 2020-2023.
5. Effekthandel väst (Sweden), 
6. E.ON Energidistribution’s flexibility markets (Sweden), Permanent from 2023/2024.
7. FUSE (Denmark), 2020-2023.
8. EcoGrid (Denmark), 2016-2019.
9. Helen and Fingrid’s marketplace (Finland), 2025-2027.
10. Elenia’s smart meters (Finland), from 2020.

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The report examines:

• What PPAs are and how they are applied in the Nordic market
• Current challenges, including price volatility, lack of transparency, and regulatory complexity
• Strategies to address these challenges, with reference to the EU’s new toolbox for promoting PPAs

PPAs remain an essential instrument for achieving climate and energy targets, but they require flexibility and predictable regulation to sustain market confidence.

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The report presents a toolbox of market-compatible support schemes designed to address gaps in firm capacity and flexibility. It evaluates both existing and new mechanisms, such as:

• Dispatchable Flexible Reserve – to provide seasonal reliability during critical shortages;
• FRR Availability Obligation – to improve local flexibility, particularly where systems depend heavily on interconnectors;
• Strategic Reserve 2.0 – a modernised, ringfenced reserve for rare, high-impact events;
• Market-wide Capacity Mechanisms – acknowledged but not recommended due to high cost and risk.

Each option is assessed for cost-efficiency, effectiveness, and compatibility with EU rules. The report also examines the role of cross-border coordination, encouraging Nordic cooperation in both risk assessment and possible joint mechanisms to reduce costs.

While support mechanisms may be needed in specific cases, the report emphasises that improving the energy-only market should remain a priority – and that any intervention should be carefully targeted, justified by rigorous needs assessment, and designed to minimise distortion and public cost.

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Tracking Nordic Clean Energy Progress 2025 shows the status of the four scenarios developed in the study four years later. By examining country-specific energy data for Denmark, Finland, Iceland, Norway, and Sweden, the report provides information on what progress has been made in critical sectors such as power, heating, transport, industry, and energy storage. It also provides insights into where action is still needed and how these efforts intersect to achieve carbon neutrality.

Progress is made but more is needed

The rate at which CO₂ emissions are decreasing in the Nordics is promising, and notable progress has been made in several sectors. However, there are still many uncertainties that risk altering the Nordic path to carbon neutrality. As non-CO₂ emissions are lagging and emissions from LULUCF are moving in the wrong direction, greater efforts will be needed to stay on track.

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While they share common goals, each Nordic country tailors its strategies to its specific context. By integrating regulatory policies with voluntary measures, they foster innovation and encourage the adoption of energy-efficient technologies. This dual approach balances mandatory compliance with incentives for proactive industry participation, accelerating progress toward sustainability.

This report presents the findings of a project initiated by the Nordic Committee of Senior Officials for Energy Policy (EK-E). The project aims to enhance knowledge sharing and collaboration among Nordic countries in their pursuit of energy efficiency goals. In response to the EU’s comprehensive directives and detailed energy efficiency requirements, the report maps and analyses the experiences of Norway, Sweden, Finland, Denmark, Iceland, and the Faroe Islands.

Report recommendations:

1. Prioritising strategic measures towards common goals
   Policy development should promote collaboration on strategic measures aligned with the national and European Union (EU) goals.
2. Leveraging exemplary initiatives and supporting transferability
   Several exemplary initiatives from Nordic countries have demonstrated success and offer transferable models for other regions. Examples of successful and scalable initiatives is Denmark’s minimum requirement targets for energy saving in new and existing buildings and the energy-saving scheme for energy companies.
3. Addressing barriers to energy efficiency implementation
   Despite a high level of policy awareness in terms of both national and EU regulations, barriers such as financial constraints, short-term planning, and fragmented policies persist. Increasing the financial incentives, simplifying subsidy schemes, and enhancing intergovernmental policy coordination could address these issues and encourage broader adoption of energy efficiency solutions.
4. Understanding changes in households’ energy behaviour
   The global energy crisis of 2021–2023 exposed households to high energy prices, sparked heated public debate, and resulted in government intervention to protect households from the worst of the price shock.

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The report Nordic Hydrogen Valleys – Value Chain Mapping Across the Region maps hydrogen value chains across the Nordic region, showcasing cutting-edge developments and ongoing deployments. This provides decision-makers, investors and society at large with the insights needed to make informed, knowledge-based decisions.

Unlike international mappings of hydrogen value chains, this report and the digital tool developed for this project are specifically designed to reflect Nordic conditions and regional energy systems. To this end, conceptual definitions of “hydrogen valley” and “hydrogen hotspot” have been developed, tailored specifically to suit the Nordic context.

Interactive Nordic tool

Explore the interactive tool here

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