Finnish Energy to steer Nordic energy cooperation 2021-2023 – focus on well-functioning markets, infrastructure and enabling clean investment

The Nordic electricity sector organisations are joining forces to promote ambitious climate policy and well-functioning electricity and emissions markets in the Nordic countries and across Europe. Finnish Energy’s Presidency of Nordenergi is off to a flying start – we will get to work immediately to raise the Nordic voice in the European energy price debate and in the promotion of the European Commission’s Fit for 55 climate package. On climate policy, we believe that it is crucial to maintain agreed emission reduction targets and not to jeopardise the functioning of the electricity or emissions markets through sudden political interventions. The priorities of the incoming presidency will be strongly linked to these issues.

Finnish Energy’s two-year Presidency in Nordenergi started last week. During the Presidency, our priority will be to promote well-functioning markets and infrastructure by implementing the strategic recommendations of the Nordenergi Electrification Study. Electrification study has given us valuable information about the opportunities and barriers of electrification in the Nordics, and the strategic recommendations provide a good basis to build on. Electrification can significantly reduce emissions in different sectors, and the urgency of tackling climate change further reinforces the importance of the electricity sector in society’s transition to climate neutrality.

A well-functioning energy market will play a key role in the electrification-led energy transition. It is vital that the European electricity market is regulated at EU level in a predictable and coherent way to ensure that the reduction of emissions will be as smooth and cost-effective as possible. Electricity market regulation must enable the integration of energy systems, including demand side flexibility, energy storage and Power-to-X technologies.

Investments in both transmission and distribution networks are crucial for the growth of clean energy. Grid financing and permitting must be accelerated to ensure a successful transition towards a climate-neutral society. In addition to the electricity grid, also hydrogen grid will be needed for the energy transition. During our Presidency, Nordenergi will be an even stronger advocate for energy market rules and grid investments that support society’s decarbonisation.

Our second priority is to ensure that EU legislation enables all clean investments. Nordenergi supports the EU’s 2050 climate neutrality target and the EU’s new 2030 climate target to reduce greenhouse gas emissions by at least 55% compared to 1990 levels. Achieving these targets requires that all clean energy sources are available to Member States and businesses. A diversified energy mix will enable climate action in a cost-effective way, which also means the lowest possible price for customers.

In addition to well-functioning energy markets, Nordenergi supports a strong and efficient emissions market. The EU Emissions Trading System should continue to be the most important tool for reducing emissions in the future. The Commission’s proposal for the development of EU ETS in the Fit for 55 package offers a good opportunity for this, and it is therefore very important that the level of ambition of the proposal is maintained by the co-legislators in the process.

Since the publication of the European Commission’s Green Deal, biodiversity issues have risen alongside climate on the agenda of the EU institutions. Biodiversity is not only on the political agenda, but it is also attracting increasing interest from companies and banks. Biodiversity issues are reflected in both corporate investment planning and reporting. Nordenergi wants to support companies in the energy sector to share their best practices and knowledge more widely, and to prepare for future EU legislation. We also believe it is important that EU biodiversity legislation enables the clean investments needed for a climate-neutral future.

All in all, we are looking forward to an inspiring two years at Nordenergi. Nordic cooperation matters and makes a difference – more than its size.

Annina Alasaari, EU Policy Advisor, Finnish Energy

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