Nordic focus on decarbonised electricity in COP21 negotiations

Páll Tómas Finnsson for the Nordic Council of Ministers

According to the International Energy Agency (IEA), the carbon intensity of electricity generation needs to be reduced to below 100g per KWh before 2040 so that average global warming can be limited to a maximum of two degrees Celsius. The Nordic countries are already at this low level and are committed to further decarbonising their energy systems as part of an international climate agreement. A key message from the Nordic Council of Ministers at COP21 is that low-carbon green growth is possible.

Ambitious energy policies have paved the way for decoupling

While 2014 marks the first time that global emissions from the electric energy sector may decouple from GDP, the Nordic region has exhibited a steady decoupling since 1997. Since then, emissions and energy consumption have decreased by 20 per cent while GDP grew by almost 50 per cent.

In 2015, CO2 emissions per unit of electricity produced in the region are one fifth of the global average. This progress has been made possible by ambitious energy and climate policies and close political, commercial and technical collaboration in the Nordic electricity markets.

“Nordic energy co-operation is unique and longstanding and the results of this co-operation are impressive,” says Hans-Jørgen Koch, Director of Nordic Energy Research, the platform for co-operative energy research and policy development under the Nordic Council of Ministers. “As demonstrated in the Nordic Energy Technology Perspectives 2013, the region is 25 years ahead of the rest of the world when it comes to low CO2 emissions from electricity production.”

All Nordic countries have actively used policy frameworks in decoupling CO2 emissions from GDP, notably carbon taxes and renewable energy incentives. The countries benefit from access to complementing natural resources for power production, but have also been known to be early adoptors of renewable energy technologies.

The region has established a well-functioning joint electricity market and a highly integrated grid infrastructure. According to Koch, the region’s experience demonstrates the important role that liberalised electricity markets and increased cross-border energy co-operation could play in achieving the objectives of a new international climate agreement.

“Nordic grid integration optimises efficiency of production and provides security of supply against uncertainties such as dry hydropower years, offline nuclear capacity, or access to electricity markets outside the region,” Koch says. “The joint market and grid development are vital for the integration of fluctuating renewable energy sources in our systems.”

A near complete decarbonisation within reach

During the climate negotiations, Nordic countries have demonstrated their continuing commitment to decarbonisation of their energy systems. All five countries are – despite their strong position today – determined to drastically reduce greenhouse gas emissions in the coming decades.

Ahead of COP21, Sweden announced its plans to become fossil-free by 2030, which would make the country one of the world’s first fossil-free welfare nations. Norway strives to become carbon-neutral by 2050 and Denmark aims to cover its entire power demand by renewables by the same year. Finland’s ambition is to reduce emissions by 80 per cent as part of the international climate change effort, while Iceland, which in 2014 produced almost 100 per cent of its electricity from renewables, aspires to cut emissions by 50-75 per cent by 2050.

According to IEA, a near complete decarbonisation of the Nordic energy systems could be achieved by 2050. As part of the work on the upcoming Nordic Energy Technology Perspectives 2016, four key opportunities to achieving this goal have been identified: firstly, to further enhance the power and heat supply infrastructure and increase electricity generation from renewables; secondly, to transform energy use in the transport sector, e.g. through modal shifts from combustion-motors to electric vehicles and from diesel to biofuels in long-haul land-transport and shipping; thirdly, to develop energy and climate technologies for energy intensive Nordic industries; and fourthly, to enhance energy efficiency in buildings.

“The potential of Nordic energy co-operation is not decreasing with increased European, OECD and world-wide energy co-operation,” says Koch. “On the contrary. Further developing our research activities and electricity markets holds vast opportunities for the region and for Europe.”

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The Nordic Council of Ministers is the official inter-governmental body for co-operation between the Nordic countries in areas such as culture, economy, health and welfare, education, energy, climate and the environment. Read more at www.norden.org/cop21 and www.nordicway.org.