Nordic energy market
Encyclopedia
Nordic energy market is a common market for energy
in Nordic countries
. It is one of the first free energy markets in Europe
and is traded in NASDAQ OMX Commodities Europe and Nord Pool Spot
. In 2003, the largest market shares were as follows: Vattenfall
17%, Fortum
14.1%, Statkraft
8.9%, E.on
7.5%, Elsam 5%, Pohjolan Voima
5%. Other producers had 42.5% market share.
provided 18.9% of electricity production and 24.1% of generation capacity in Denmark
in 2008, Denmark was a pioneer in developing commercial wind power
during the 1970s, and today almost half of the wind turbine
s around the world are produced by Danish manufacturers such as Vestas
and Siemens Wind Power
along with many component suppliers.
and 22.0% of the heat in district heating
in Denmark
in 2008; and in total provided 21.6% of total energy consumption (187PJ out of 864PJ) and is based mainly on coal imported from outside Europe.
Cheap and reliable energy is of exceptional importance to Finland. The energy demand is high because of its cold climate and the structure of its industry. Finland's hydrocarbon
resources are limited to peat
and wood
, while neighboring Norway
has oil and Estonia
oil shale
. Until the 1960s, Finnish energy policy relied on the electricity produced by hydropower
stations and extensive decentralised use of wood for energy. Finland's 187,888 lakes do not lie much above sea level – less than 80 metres in the case of the two biggest lakes, Saimaa
and Päijänne. Consequently, Finland has less hydropower capacity than Sweden or Norway.
Finnish energy cooperative Teollisuuden voima
operates four nuclear reactors that produce 18 percent of the country's energy. There is also one research reactor in Otaniemi
campus and Olkiluoto Nuclear Power Plant, the fifth AREVA
-Siemens
-built reactor – world's largest at 1600 MWe and a showcase of new technology – is currently under construction and is scheduled to be operational by 2013. Finland's Kyoto and EU emission terms are causing a sharp increase in energy prices and the existing reactors are aging: there has been talk about many more reactors and the sixth is already under environmental impact assessment.
Nuclear power is by far the cheapest energy form in Finland (the few hydropower plants excluded), but because political parties - particularly the Green League
- are hesitant to grant nuclear power permits, most energy is produced from fossil fuel
s, mainly coal
and oil
. About 25 percent of energy production is categorized to be renewable energy
, which is high compared to the EU average 10 percent. About one fifth of all the energy consumed in Finland is wood-based. Industrial residue and garbage are often utilized for energy. Many homeowners use wood as an additional (but not primary) heat source. About seven percent of electricity is produced from peat
harvested from Finland's extensive bog
s.
Currently, some electricity is imported to Finland. In recent years, a varying amount (5–17 percent) of power has been imported from Russia, Sweden and Norway. The Norwegian and Swedish hydroelectric
plants remain an important source for imported power. The current energy policy debate is centred on self-sustainability. There are plans to build a submarine power cable
from Russia, but this is also considered a national security
issue. The government has already rejected one plan for such a power cable. Neste Oil operates two large oil refineries
for domestic and Baltic markets, refined products making 36 percent of chemical exports.
strengthened Sweden's commitment to decrease dependence on imported fossil fuels. Since then, electricity
has been generated mostly from hydropower
and nuclear power. Among other things, the accident of Three Mile Island Nuclear Generating Station
(USA) prompted the Swedish parliament to hold a referendum
on nuclear power. The referendum led to a decision that no further nuclear power plants should be built and that a nuclear power phase-out
should be completed by 2010.
In 2006, out of a total electricity production of 139 TWh
, electricity from hydropower accounted for 61 TWh (44%), and nuclear power
delivered 65 TWh (47%). At the same time, the use of biofuel
s, peat
etc. produced 13 TWh (9%) of electricity, while wind power produced 1 TWh (1%). Sweden was a net importer of electricity by a margin of 6 TWh. Biomass
is mainly used to produce heat for district heating
and central heating
and industry processes.
In March 2005, an opinion poll showed that 83% supported maintaining or increasing nuclear power. Since then however, reports about radioactive leakages at a nuclear waste store in Forsmark
, Sweden, have been published, although this does not seem to have changed the public support of continued use of nuclear power. In 2010 Parliament halted the phase-out policy, allowing for new reactors to replace existing ones.
In an effort to phase out the dependency on nuclear power and fossil fuels, the Swedish government has launched a multi-billion dollar program to promote renewable energy
and energy efficiency. The country has for many years pursued a strategy of indirect taxation as an instrument of environmental policy
, including energy tax
es in general and carbon dioxide
taxes in particular. Also in 2005, Sweden garnered international attention by announcing its intention to break its dependence on foreign oil within 15 years, with the goal of becoming the world's first oil-free economy.
Internal bottleneck
s in the Swedish electric grid (Cut 2 and Cut 4) restrict transmission of electricity between hydro plants in the north, and nuclear and fossil plants in the south. Sweden has a policy of a single system price regardless of power differences between areas.
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
in Nordic countries
Nordic countries
The Nordic countries make up a region in Northern Europe and the North Atlantic which consists of Denmark, Finland, Iceland, Norway and Sweden and their associated territories, the Faroe Islands, Greenland and Åland...
. It is one of the first free energy markets in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and is traded in NASDAQ OMX Commodities Europe and Nord Pool Spot
Nord Pool Spot
Nord Pool Spot runs the largest market for electrical energy in the world, measured in volume traded and in market share. It operates in Norway, Denmark, Sweden, Finland, and Estonia. More than 70% of the total consumption of electrical energy in the Nordic market is traded through Nord Pool...
. In 2003, the largest market shares were as follows: Vattenfall
Vattenfall
Vattenfall is a Swedish power company. The name Vattenfall is Swedish for waterfall, and is an abbreviation of its original name, Royal Waterfall Board...
17%, Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...
14.1%, Statkraft
Statkraft
Statkraft is a Norwegian state owned electricity company. With a total energy production of 44.9 TWh in 2007, the Statkraft Group is the third largest energy producer in the Nordic region, as well as the largest energy producer based on renewable energy sources in Europe,consisting of 40% of the...
8.9%, E.on
E.ON
E.ON AG, marketed with an interpunct as E•ON, is the holding company of the world's largest investor-owned energy service provider based in Düsseldorf, Germany. The name comes from the Greek word aeon which means eternity....
7.5%, Elsam 5%, Pohjolan Voima
Pohjolan Voima
Pohjolan Voima Oy is the second biggest Finnish energy company, which owns hydropower and thermal power plants . Pohjolan Voima is a founder and main shareholder of the Olkiluoto Nuclear Power Plant operator Teollisuuden Voima Oy...
5%. Other producers had 42.5% market share.
Denmark
From 1999 and onwards, Denmark is a net exporter of fossil energy.Wind power in Denmark
Wind powerWind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....
provided 18.9% of electricity production and 24.1% of generation capacity in Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
in 2008, Denmark was a pioneer in developing commercial wind power
Wind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....
during the 1970s, and today almost half of the wind turbine
Wind turbine
A wind turbine is a device that converts kinetic energy from the wind into mechanical energy. If the mechanical energy is used to produce electricity, the device may be called a wind generator or wind charger. If the mechanical energy is used to drive machinery, such as for grinding grain or...
s around the world are produced by Danish manufacturers such as Vestas
Vestas
Vestas Wind Systems A/S is a Danish manufacturer, seller, installer, and servicer of wind turbines. It is the largest in the world, but due to very rapid growth of its competitors, its market share decreased from 28% in 2007 to 12.5% in 2009...
and Siemens Wind Power
Siemens Wind Power
Siemens Wind Power, or SWP, is a wind turbine manufacturer with headquarters and main production facilities established in 1980 in Brande, Denmark. SWP is wholly owned by Siemens of Germany since 2004 through the Renewable Energy division in the Siemens Energy sector...
along with many component suppliers.
Coal power in Denmark
Coal power provided 48.0% of the electricityElectricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
and 22.0% of the heat in district heating
District heating
District heating is a system for distributing heat generated in a centralized location for residential and commercial heating requirements such as space heating and water heating...
in Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
in 2008; and in total provided 21.6% of total energy consumption (187PJ out of 864PJ) and is based mainly on coal imported from outside Europe.
Finland
Hydrocarbon
In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons from which one hydrogen atom has been removed are functional groups, called hydrocarbyls....
resources are limited to peat
Peat
Peat is an accumulation of partially decayed vegetation matter or histosol. Peat forms in wetland bogs, moors, muskegs, pocosins, mires, and peat swamp forests. Peat is harvested as an important source of fuel in certain parts of the world...
and wood
Wood
Wood is a hard, fibrous tissue found in many trees. It has been used for hundreds of thousands of years for both fuel and as a construction material. It is an organic material, a natural composite of cellulose fibers embedded in a matrix of lignin which resists compression...
, while neighboring Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
has oil and Estonia
Estonia
Estonia , officially the Republic of Estonia , is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia , and to the east by Lake Peipsi and the Russian Federation . Across the Baltic Sea lies...
oil shale
Oil shale
Oil shale, an organic-rich fine-grained sedimentary rock, contains significant amounts of kerogen from which liquid hydrocarbons called shale oil can be produced...
. Until the 1960s, Finnish energy policy relied on the electricity produced by hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
stations and extensive decentralised use of wood for energy. Finland's 187,888 lakes do not lie much above sea level – less than 80 metres in the case of the two biggest lakes, Saimaa
Saimaa
Saimaa is a lake in southeastern Finland. At approximately , it is the largest lake in Finland, and the fourth largest in Europe. It was formed by glacial melting at the end of the Ice Age. Major towns on the lakeshore include Lappeenranta, Imatra, Savonlinna, Mikkeli, Varkaus, and Joensuu. The...
and Päijänne. Consequently, Finland has less hydropower capacity than Sweden or Norway.
Finnish energy cooperative Teollisuuden voima
Teollisuuden Voima
Teollisuuden Voima Oyj is a Finnish nuclear power company owned by a consortium of power and industrial companies. The biggest shareholders are Pohjolan Voima and Fortum...
operates four nuclear reactors that produce 18 percent of the country's energy. There is also one research reactor in Otaniemi
Otaniemi
Otaniemi , or Otnäs , is a district of Espoo, Finland. It is located near the border of Helsinki, the capital of Finland....
campus and Olkiluoto Nuclear Power Plant, the fifth AREVA
Areva
AREVA is a French public multinational industrial conglomerate headquartered in the Tour Areva in Courbevoie, Paris. AREVA is mainly known for nuclear power; it also has interests in other energy projects. It was created on 3 September 2001, by the merger of Framatome , Cogema and...
-Siemens
Siemens
Siemens may refer toSiemens, a German family name carried by generations of telecommunications industrialists, including:* Werner von Siemens , inventor, founder of Siemens AG...
-built reactor – world's largest at 1600 MWe and a showcase of new technology – is currently under construction and is scheduled to be operational by 2013. Finland's Kyoto and EU emission terms are causing a sharp increase in energy prices and the existing reactors are aging: there has been talk about many more reactors and the sixth is already under environmental impact assessment.
Nuclear power is by far the cheapest energy form in Finland (the few hydropower plants excluded), but because political parties - particularly the Green League
Green League
The Green League is a centrist green liberal political party in Finland. It has ten seats in the Finnish Parliament and two in the European Parliament. The current chairperson is Ville Niinistö....
- are hesitant to grant nuclear power permits, most energy is produced from fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...
s, mainly coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
and oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
. About 25 percent of energy production is categorized to be renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
, which is high compared to the EU average 10 percent. About one fifth of all the energy consumed in Finland is wood-based. Industrial residue and garbage are often utilized for energy. Many homeowners use wood as an additional (but not primary) heat source. About seven percent of electricity is produced from peat
Peat
Peat is an accumulation of partially decayed vegetation matter or histosol. Peat forms in wetland bogs, moors, muskegs, pocosins, mires, and peat swamp forests. Peat is harvested as an important source of fuel in certain parts of the world...
harvested from Finland's extensive bog
Bog
A bog, quagmire or mire is a wetland that accumulates acidic peat, a deposit of dead plant material—often mosses or, in Arctic climates, lichens....
s.
Currently, some electricity is imported to Finland. In recent years, a varying amount (5–17 percent) of power has been imported from Russia, Sweden and Norway. The Norwegian and Swedish hydroelectric
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
plants remain an important source for imported power. The current energy policy debate is centred on self-sustainability. There are plans to build a submarine power cable
HVDC Russia-Finland
The HVDC Russia–Finland was a project to build a HVDC submarine power cable between Kernovo, Leningrad Oblast and Mussalo, Kotka...
from Russia, but this is also considered a national security
National security
National security is the requirement to maintain the survival of the state through the use of economic, diplomacy, power projection and political power. The concept developed mostly in the United States of America after World War II...
issue. The government has already rejected one plan for such a power cable. Neste Oil operates two large oil refineries
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
for domestic and Baltic markets, refined products making 36 percent of chemical exports.
Sweden
The 1973 oil crisis1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
strengthened Sweden's commitment to decrease dependence on imported fossil fuels. Since then, electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
has been generated mostly from hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
and nuclear power. Among other things, the accident of Three Mile Island Nuclear Generating Station
Three Mile Island Nuclear Generating Station
Three Mile Island Nuclear Generating Station is a civilian nuclear power plant located on Three Mile Island in the Susquehanna River, south of Harrisburg, Pennsylvania. It has two separate units, known as TMI-1 and TMI-2...
(USA) prompted the Swedish parliament to hold a referendum
Referendum
A referendum is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal. This may result in the adoption of a new constitution, a constitutional amendment, a law, the recall of an elected official or simply a specific government policy. It is a form of...
on nuclear power. The referendum led to a decision that no further nuclear power plants should be built and that a nuclear power phase-out
Nuclear power phase-out
A nuclear power phase-out is the discontinuation of usage of nuclear power for energy production. Often initiated because of concerns about nuclear power, phase-outs usually include shutting down nuclear power plants and looking towards renewable energy and other fuels.Austria was the first country...
should be completed by 2010.
In 2006, out of a total electricity production of 139 TWh
TWH
TWH or twh could refer to:*Tennessee Walking Horse, a breed of horse* Toronto Western Hospital, a hospital in Toronto, Canada* TWH Bus & Coach, a bus company in Romford, England* Terrawatt-hour, measure of electrical energy, 1012 watt-hours...
, electricity from hydropower accounted for 61 TWh (44%), and nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
delivered 65 TWh (47%). At the same time, the use of biofuel
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
s, peat
Peat
Peat is an accumulation of partially decayed vegetation matter or histosol. Peat forms in wetland bogs, moors, muskegs, pocosins, mires, and peat swamp forests. Peat is harvested as an important source of fuel in certain parts of the world...
etc. produced 13 TWh (9%) of electricity, while wind power produced 1 TWh (1%). Sweden was a net importer of electricity by a margin of 6 TWh. Biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
is mainly used to produce heat for district heating
District heating
District heating is a system for distributing heat generated in a centralized location for residential and commercial heating requirements such as space heating and water heating...
and central heating
Central heating
A central heating system provides warmth to the whole interior of a building from one point to multiple rooms. When combined with other systems in order to control the building climate, the whole system may be a HVAC system.Central heating differs from local heating in that the heat generation...
and industry processes.
In March 2005, an opinion poll showed that 83% supported maintaining or increasing nuclear power. Since then however, reports about radioactive leakages at a nuclear waste store in Forsmark
Forsmark
Forsmark is a village with 59 inhabitants on the east coast of Uppland, Sweden. It is most known as the location of the Forsmark Nuclear Power Plant....
, Sweden, have been published, although this does not seem to have changed the public support of continued use of nuclear power. In 2010 Parliament halted the phase-out policy, allowing for new reactors to replace existing ones.
In an effort to phase out the dependency on nuclear power and fossil fuels, the Swedish government has launched a multi-billion dollar program to promote renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
and energy efficiency. The country has for many years pursued a strategy of indirect taxation as an instrument of environmental policy
Environmental policy
Environmental policy is any [course of] action deliberately taken [or not taken] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on...
, including energy tax
Energy tax
An energy tax is a tax that increases the price of energy . Arguments in favour of energy taxes have included the pursuit of macroeconomic objectives, e.g., fiscal deficit reduction in the 1990s, as well as environmental benefits, i.e., reduced pollution...
es in general and carbon dioxide
Carbon dioxide
Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...
taxes in particular. Also in 2005, Sweden garnered international attention by announcing its intention to break its dependence on foreign oil within 15 years, with the goal of becoming the world's first oil-free economy.
Internal bottleneck
Bottleneck
A bottleneck is a phenomenon where the performance or capacity of an entire system is limited by a single or limited number of components or resources. The term bottleneck is taken from the 'assets are water' metaphor. As water is poured out of a bottle, the rate of outflow is limited by the width...
s in the Swedish electric grid (Cut 2 and Cut 4) restrict transmission of electricity between hydro plants in the north, and nuclear and fossil plants in the south. Sweden has a policy of a single system price regardless of power differences between areas.