On track to achieve decarbonisation goals

The Nordic power sector is on track to achieve its ambitious decarbonisation goals, demonstrating significant progress in reducing carbon emissions. This ongoing transformation is driven by a strong commitment to sustainable energy practices and innovative technologies.

A key factor in this success is the high utilisation of renewable energy sources (RES). The Nordic countries have harnessed their abundant natural energy resources, such as wind, hydro, geothermal and biomass, to generate clean electricity. This not only reduces reliance on fossil fuels but also enhances energy security and resilience.

The Nordic region's power systems are increasingly integrating renewable energy at a high capacity, showcasing the effectiveness of advanced grid management and storage solutions. This integration ensures a stable and reliable power supply.

Overall, the Nordic power sector's progress towards decarbonisation serves as a model for other regions, highlighting the potential of renewable energy to drive a sustainable and low-carbon future.

Denmark has made remarkable strides in reducing CO2 emissions from power and heat, achieving a 75% reduction since the 1990s.

Finland saw its CO2 emissions peak in the early 2000s, but has since cut them by 50%, with a 34% reduction since 1990.

Norway and Iceland have maintained nearly fossil-free power generation since 1990, though Norway has seen a slight increase in emissions due to increased waste incineration capacity.

Meanwhile, Sweden has successfully reduced its power and heat emissions by 30% since 1990.

These achievements highlight the Nordic region's commitment to sustainable energy and climate action.

Figure 03.1: CO2 emissions from power and heat generation per country.

Electricity consumption in the Nordic countries has shown a slight upward trend over the past few decades. From 1990 to 2023, the overall electricity consumption in the region increased by 18%.

Iceland stands out with a remarkable threefold increase in its electricity consumption since 1990, primarily due to the increasing activity in the aluminium smelting industry.

Norway also saw a significant rise in electricity consumption, with a 31% increase since 1990. Finland and Denmark followed with increases of 29% and 15%, respectively. Sweden is the only Nordic country to have reduced its electricity consumption, achieving a 6% decrease since 1990.

Figure 03.2: Gross electricity consumption by country.
Data source: World energy balance, IEA, 2024

Over the past decade, the Nordic electricity generation has seen a significant reduction in fossil fuel-based generation, coupled with a substantial rise in wind energy generation. Additionally, there has been notable growth in hydro and biomass contributions.

This shift towards renewable sources has been accompanied by a steady increase in overall electricity generation within the Nordic countries.

Electricity consumption in the Nordic countries has been on the rise, reflecting the region's growing energy needs. However, this increase in consumption is paralleled by a significant growth in energy exports. From 1990 to 2023, the Nordics have seen their energy exports double.

The declines in electricity consumption in 2020 and 2022 can be attributed to different factors. In 2020, the COVID-19 pandemic led to widespread lockdowns, reduced industrial activity, and changes in daily routines, all of which contributed to lower electricity usage. In 2022, the developing war in Ukraine caused a surge in electricity prices, prompting consumers and businesses to cut back on their electricity consumption to manage costs.

Figure 03.3: Electricity generation in the Nordics by source. The black dots indicate the amount of electricity consumed within the Nordic countries.

Denmark: Fossil fuel generation plummeted from 52% to 16%, with wind power soaring from 32% to 54%.

Finland: Fossil fuel use fell from 30% to 10%, and wind power climbed from 1% to 17%.

Iceland: Hydro power accounts for 71% of generation in 2022, with the remaining 29% from geothermal sources.

Norway: Wind power increased from 1% to 10%, with hydro power dominating at over 88% in 2022.

Sweden: Nuclear power’s share dropped from 43% to 30%, while wind power surged from 6% to 19%.

Figure 03.4: Electricity generation per country by source

In 2023, the share of renewable energy in the Nordic power generation reached 78%, excluding nuclear power, which contributes an additional 18% to the energy mix.

Hydro power generates 51%, followed by significant contributions from wind with 18% and biomass  with 6%. Power generation from solar and geothermal amounts to 2% and 1%, respectively.

Power generation from fossil fuels has been significantly reduced, now accounting for just 2%. This shift underscores the Nordic region's commitment to advancing into a more sustainable power generation future.

Figure 03.5: Share of renewables in power generation, 2023
Data source: IEA

In the period between 2000-2023, the installed power capacity in the Nordics has increased by 49 % from just above 90 GW to almost 140 GW.

This growth is driven by additions of wind and solar capacity while non-renewable capacity has plummeted from around 37 GW to 27 GW in 2023.

Other renewable capacity, which increased from 4 GW to 10 GW, is a mix between biomass, renewable municipal waste, geothermal energy and biogas.

Figure 03.6: Development in installed power capacity in the Nordics

Hywind Tampen, Norway the world’s first floating wind farm has a capacity of 94.6 MW. The wind farm is powering Equinor’s Snorre and Gullfaks fields (oil and gas fields in the North Sea, Norway). The wind farm is located about 140 kilometres from the shore and has a water depth  between 260-300 meters. The turbines are mounted on floating concrete structures with a common anchoring system.

Hywind Tampen began power production in the third quarter of 2022 and is fully operational as of August 2023. This project generates 384,000 MWh of electricity annually, offsetting 200,000 tons of carbon dioxide (CO2) emissions each year.

The project, developed by Equinor, is currently owned by several companies with the following ownership stakes: Equinor (41%), DEA Norge (9.83%), ExxonMobil Exploration and Production Norway (9.83%), Inpex Idemitsu Norge (9.83%), OMV (Norge) (9.83%), Petoro (9.83%), and Var Energi (9.83%).