18 August 2022

Electricity prices in the Nordics reach record highs due to high temperatures and lack of wind power

Electricity prices in the four Nordic countries Finland, Norway, Denmark and Sweden, as well as the Baltic states, have recently reached record highs due to the energy crisis in Europe and uncertainty over sustainable energy sources. The average spot price for electricity in Finland was set to rise to EUR 465/MWh on Thursday, and was then the highest daily average price in at least two years. On Wednesday evening, the Danish price was DKK 8.42/kWh, a record high. Meanwhile, between 17th and 18th, spot prices in Estonia, Lithuania and Latvia will be as high as NOK 40. On Thursday, electricity prices in south-western Norway will be at their highest, between 6pm and 7pm the price will be NOK 5.89/kWh. On Wednesday, the average price of electricity in southern Sweden was SEK 5.69/kWh, more than a hundred times higher than in northern Sweden, which is also the highest level ever.

Europe's energy hoarding has been affected by drought and record high temperatures in many places. Warm temperatures in rivers make it more difficult and expensive to cool nuclear power plants, while the heat causes the wind to weaken - which affects wind power generation. Meanwhile high temperatures make transmission more difficult, and when temperatures rise to 30 degrees and above, the potential for propagation drops dramatically. In addition, high electricity prices also occur because of power plant maintenance. For example, annual maintenance work continues at the Loviisan nuclear power plant of the Finnish energy company Fortum. Some power plants will be undergoing maintenance between 17th and 18th in the Baltic states. The price of electricity in southern Sweden has also risen because of the limited transmission capacity between its northern and southern parts.

HS, HEAD TOPICS, NRK, DN

Swedish Government proposes high-cost protection as energy prices soar

Yesterday, the Swedish Government presented a proposal for high-cost protection to help Swedish households and businesses with the electricity costs that have skyrocketed. Approximately SEK 60 billion of the fees paid to Svenska Kraftnät must be returned in the short term and it is expected that SEK 30 billion of the total amount will go to households affected by high electricity prices. At least SEK 30 billion must be returned either through measures that lower prices, lower work charges or give refunds to households as soon as possible. Svenska Kraftnät has now been tasked with applying to the Energy Market Inspectorate to be allowed to use revenues from congestion in the electricity grid, so-called bottleneck revenues, to finance emergency measures for households and businesses in the short term.

SvD, Press Release

Farmanbar (S) downplays electricity cable between Sweden and Germany

During the press conference held yesterday in connection with the Government proposing its high-cost protection for energy prices, the Minister for Energy and Digital Development, Khashayar Farmanbar (S) noted that in order to solve Sweden’s underlying problems causing the soaring electricity prices, Sweden must do two things. First, Sweden must increase electricity production in the country, especially in the southern part of the country. Secondly, Sweden must increase its power grid capacity. A new cable between Sweden and Germany, Hansa Powerbridge, is planned for 2026 and would result in increased transmission capacity to Germany. However, in response to whether such a cable would result in the domestic electricity being exported, Farmanbar (S) rejected that such a cable had been decided on. “My message has been clear to both Svenska Kraftnät and the Swedish people that when it comes to electricity grid capacity expansion, transmission capacity within Sweden has the absolute highest priority. When SvD asked whether that means that there will be no new cable to Germany, Farmanbar (S) noted “I don’t see that we will give the green light to build that cable in the near future.”

SvD

Energy Norway: Norway will not meet climate targets by 2030

According to a report by Energi Norge, Norway will not meet its climate target of a 55% reduction in emissions by 2030 because the share of renewable energy use is too low. In order to meet the Government's target, Norway needs a renewable energy share of around 80% by 2030. In 2021, Norway's share of renewable energy landed at 52.1%.

NORDRE

European Energy completes financing for Polish wind project

European Energy has secured financing for another Polish project in its portfolio, the Liskowo wind farm in north-western Poland. The project has a total value of EUR 53 million and an installed capacity of 38.8 MW. The wind farm is expected to be connected to the Polish grid in the first half of 2023. The financing is an important step in the launch of European Energy's pipeline in Poland. They are currently developing more than 4 GW of projects in Poland, which are now used for most solar projects, but more wind projects may be developed in the future. 

Poland assumes that 50% of electricity generation will come from renewable sources by 2040, while the EU's target will require more than 18 GW of onshore wind power by 2030. According to the Energy Market Agency, the installed capacity of wind farms is close to 7.2 GW as of May 2022. Renewable energy market players expect Poland's regulatory framework to become more attractive in the coming months to develop more wind projects. 

Press Release

US Steel, Equinor and Shell explore regional clean energy opportunities

US Steel, Equinor US Holdings Inc and Shell American Gas & Electric LLC have entered into a non-exclusive partnership agreement to advance a collaborative clean energy hub in the Ohio, West Virginia, Pennsylvania region. The hub will focus on decarbonisation opportunities featuring carbon capture utilisation and storage (CCUS) and hydrogen production and utilisation. The Regional CCUS and Hydrogen Hub are consistent with the ambition of the US and project partners to achieve net zero carbon emissions by 2050. To support its development, Equinor and Shell will jointly apply for funding from the US Department of Energy earmarked for the creation of a Regional Clean Energy Centre. US Steel is evaluating its possible role in the centre, including as a potential funding participant, customer, supplier or partner.

Press Release

Sweden's Inrego joins Haaga-Helia's circular economy project

The pilot phase of the Haaga-Helia University of Applied Sciences' Circular Economy Digital Marketplace (CEDIM) project started last May and is now running as expected. The Swedish second-hand IT equipment company Inrego has joined the pilot. The company employs 190 people and supplies equipment to more than 90 different countries. With its operations, it sets the benchmark for global IT equipment recycling. The circular economy is a growing trend that offers enormous business opportunities. Today, more than a third of large organisations end up scrapping old IT equipment or moving it into storage approximately every four years. Ways to change this, for example through the circular economy, are being sought. The EU has identified the circular economy as one of the most important measures to achieve climate neutrality by 2050. Finland is also committed to developing a circular economy and aims to become a leading country in the digital circular economy in the coming decades.

STT

Nortura, TINE and Felleskjøpet to take joint measures to reduce methane emissions

These three cooperatives are owned by Norwegian farmers and are market regulators for milk, eggs, meat and cereals. The TINE brand, together with Nortura's Gilde and Prior, are among the country's strongest consumer brands, and Felleskjøpet is the market leader in the supply of agricultural equipment and feed in Norway. The three cooperatives are working together to improve feeding and animal genetics to reduce emissions from meat and milk. Earlier this year, Nortura and Tine signed a letter of intent with Air Liquide, inter-municipal recycling company IVAR and Lyse regarding the construction of a livestock manure biogas plant in Jæren. The project will help to reduce methane emissions from livestock manure and produce large amounts of renewable energy and bio fertiliser. Calculations show that the plant, when completed, will be able to reduce methane emissions by 15% in the country's three largest livestock municipalities.

Agriculture accounts for approximately 9% of Norway's greenhouse gas emissions, with methane and nitrous oxide being the main sources of this sector. In terms of measures to reduce greenhouse gas emissions, agriculture has undertaken significant activities in two areas: developing feed and additives to reduce methane production in the stomachs of dairy cows and investing in biogas plants to treat methane in cow manure. Felleskjøpet, for example, uses an additive in all its ruminant feeds that reduces methane emissions from cows by up to 15%. This cooperation will help agriculture to meet its target of reducing 5 million tonnes of CO2 equivalent by 2030 and help Norway to meet its obligation to reduce methane emissions by 30% in the COP 26 agreement.

Press Release

GOTLAND AB invests heavily in PLAGAZI and becomes strategic anchor investor in its capital purchases

Gotland Tech Development AB, which is part of Rederi AB Gotland (Gotlandsbolaget) and amongst other activities, runs the ferry service to Gotland, has committed to invest in Plagazi AB through a directed share issue. Gotlandsbolaget's investment is essential for the company's growth, market launch and construction of hydrogen facilities. As a strategic anchor investor, Gotlandsbolaget's targeted new issue is part of the company's financing strategy. Plagazi's patented process and production of renewable and recycled hydrogen at competitive prices presents significant business opportunities between the companies, and Gotland sees the investment in Plagazi as being of strategic importance for the company's future hydrogen-powered vessels. The two companies will lead the way together in the hydrogen energy and maritime markets.

Di

What we’re reading

• Germany's Uniper on the 'brink of insolvency' after €12bn loss (Financial Times)
• Second European smelter to halt production as energy costs bite (Financial Times)
• Toyota and Foxconn hit as drought leads to record low Yangtze River (Financial Times)

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