European electricity markets are undergoing significant transformation. While many of the current market design reforms are developed and implemented outside the Nordic region, their implications are not confined by national borders. As this report demonstrates, developments in neighbouring countries can have important consequences for Nordic electricity prices, trade patterns and welfare.
The Nordic power system has long been characterised by strong cross-border integration and a high degree of trust in market-based solutions. This interconnectedness has been a key strength, but it also implies that policy and market changes elsewhere in Europe increasingly shape outcomes in the Nordic countries. Understanding these spillover effects is therefore essential for informed decision-making.
This study, commissioned by the Nordic Council of Ministers, contributes to this understanding by analysing how selected European market design reforms may affect the Nordic electricity markets towards 2035. Through detailed power market modelling, the report provides new insights into how capacity mechanisms, renewable expansion, battery deployment and trade measures in neighbouring countries may influence Nordic market outcomes.
The findings underline the importance of continued Nordic cooperation and active engagement in European energy policy processes. As the Nordic countries work towards their shared vision for 2030—aiming for a carbon-neutral, competitive and secure energy system—maintaining well-functioning, interconnected markets will be crucial.
I hope this study will contribute to a deeper understanding of our increasingly integrated electricity markets and inform future policy discussions.
Klaus Skytte
CEO, Nordic Energy Research