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WIREs Energy Environ.
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Long‐term trends of Nordic power market: A review

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Abstract The Nordic power system will play an important role in a future carbon‐neutral European power market. In this study, 43 scenarios in 15 Nordic power market outlooks published between 2016 and 2019 are reviewed. Most scenarios see high future power prices with substantial correlation with assumed gas and emission quota prices. The underlying uncertainties in gas and emission quota prices are passed on to future power prices. The power prices are well above the cost of wind power, indicating that the wind deployment is either underestimated or might be largely dependent on non‐market factors. The models used for the outlooks have limited sector coverage and trade‐offs are made between computational resources and complexity. A set of recommendations for future outlook publications are proposed based on this review experience. Moving towards a low‐carbon future, more attention should be put to the demand side, especially with increasing importance of sector coupling and electrification. Also, to assess the profound uncertainties in the energy transition period, techniques besides scenario analysis can be applied. Explicit assessments on impacts of emerging topics, such as social oppositions to particular technologies and increased awareness of sustainability indicators besides clean energy, will add values for long‐term decision making in the power markets. Last but not the least, best efforts of clarity and transparency should always be ensured. This article is categorized under: Energy Systems Economics > Economics and Policy Energy Systems Analysis > Economics and Policy Energy Policy and Planning > Economics and Policy
The electricity consumption in 2020, 2030, 2040, and 2050 in each Nordic country reported in the outlooks. The full scenario names are given in Table 2. The columns colored in blue are reports with electricity only models
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Nord Pool electricity spot market hourly price by month, average of all Nordic countries from week 1 to week 17 in 2018, 2019, and 2020
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Natural gas prices (left) and emission quota prices in the EU ETS (right) in 2020 from IEA WEO released between 2009 and 2016, and the historical annual prices in the released year
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Modeled power prices in 2020, 2030, 2040, and 2050 found in reviewed outlook scenarios, using endogenous modeling of power‐to‐heat (a) or an electricity only model (b). N, Norway; S, Sweden; D, Denmark; F, Finland; Nd, Nordics. The columns colored in green are the scenarios enabling generation expansion investments with perfect foresight, the ones in blue are with myopic foresight for investment, and the ones in white are with exogenous capacity assumptions. The columns surrounded by yellow dot lines are the scenarios considering multiple weather years, while the others assume one normal weather year. The full scenario names are given in Table 2
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Wind capacity (a) and generation (b) in 2030, 2040, and 2050 found in each scenario in Nordic countries and the 2018 levels. The full scenario names are given in Table 2. The columns colored in green are the scenarios enabling wind capacity expansion investments in their models. Source of 2018 levels: Wind Europe (2019)
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Summary of (a) emission quota price in EUR/tonne CO2 versus gas price in USD/Mbtu, (b) Swedish power price in EUR/MWh versus gas price and (c) emission quota price in EUR/tonne, (d) Danish power price in EUR/MWh versus gas price and (e) emission quota price in EUR/tonne. All data are from the reviewed outlook scenarios, colored by scenario group defined in Section 3.2
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(a) Emission quota prices in 2020, 2030, 2040, and 2050 found in each scenario and the 2018 price level. (b) Historical prices from 2009 to 2018, average price assumptions in 2020, 2030, 2040, and 2050 by outlook scenario groups from the reviewed studies, EC (2016), and scenarios in IEA (2016). The full scenario names are given in Table 2
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(a) Natural gas prices in 2020, 2030, 2040, and 2050 found in each scenario and the 2018 price level. (b) Historical prices from 2009 to 2018, average price assumptions in 2020, 2030, 2040, and 2050 by outlook scenario groups from the reviewed studies, EC (2016), and scenarios in IEA (2016). The full scenario names are given in Table 2
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