Jorma Ollila presents several important proposals to improve the Nordic energy cooperation – now it's for the ministers to make that happen

20 June 2017, 16:00 EEST

Nordic Energy Ministers assigned Mr. Jorma Ollila in October 2015 to conduct a strategic screening on the Nordic energy cooperation and to make concrete proposals on how to further develop that cooperation during the next five to ten years. The report that Mr. Ollila presented today is very welcome and also very timely as it links the discussion on the Nordic dimension to the broader EU Energy Union agenda where regional cooperation has recently been given a new impetus.

As a major Nordic energy utility Fortum has been a strong proponent of Jorma Ollila's screening process and we find the outcome very promising. We fully support the call for stronger coordination between the Nordic countries on national energy and climate policies as well as strengthening the Nordic voice in Brussels by better coordinating our EU positions. EU Commission should be closely involved in the evolving regional cooperation.

"In the integrated and interconnected regional power market decisions and policy choices made in one country will have an impact also in other countries. Therefore taking a step towards better policy coordination is not only an option but an absolute necessity. We can therefore give our strong support to the idea of Nordic peer reviews of national policies with cross-border impacts. This is also well aligned with the EU Governance regulation currently under negotiation between the member states and the European Parliament," notes Pekka Lundmark, CEO of Fortum. 

Although the Nordic electricity market is one of the best functioning regional electricity markets in the world, the ongoing energy transition towards increasingly decarbonized and volatile power generation necessitates further development of the electricity market design. Like Mr. Ollila, Fortum also sees that energy-only market design is the best and most cost-efficient basis also for the future market development. Stronger real-time price signals, the development of balancing market and steps towards harmonization of regional retail electricity market are examples of important issues on the near-term development agenda. Fortum also calls for closer involvement of the Baltic countries in the Nordic cooperation. Baltic countries are part of the Nord Pool area and involving them fully would strengthen our regional voice in Brussels.     

Mr. Ollila rightly calls for a stronger regional view on key policies relating to decarbonisation, especially on the EU emissions trading, renewable support or potential new issues like carbon price floor. Fortum's clear view is that mature RES technologies are already cost competitive in Europe and no additional support mechanisms are needed. Instead, ETS should be further strengthened e.g. by letting the EU ETS be the only tool for decarbonisation in the sectors covered by the EU ETS. EU and national policy coherence should be improved and the Governance Regulation provides an appropriate framework for this, including protecting the ETS from further watering down by overlapping policies. In case governments still wanted to continue subsidizing renewable energy the countries belonging into the same regional market should aim for having a common subsidy framework in order to minimize market distortions.

Fortum has called for a better involvement of energy stakeholders in the discussion concerning regional market development. From that point of view the proposal to establish a Nordic power market forum is extremely welcome. "Now it's up to Nordic ministers to make that happen," says Mr. Lundmark.

Further information:
Merja Paavola, Vice President, Public Affairs, Fortum, tel. +358 50 396 1161