Berit Tennbakk October 2005

1. Nordic Energy PerspectivesDo current Nordic energy policies meet national and international demands? Berit Tennbakk October 2005

2. The issues Do current energy and environmental policies meet national and international demands? • What are the national and international demands/goals in the Nordic countries? • What are the similarities and differences in goals among the Nordic countries? • To what extent is there coherence and conflict between policy goals and measures in the respective countries? • How are the trade-offs made between national and international goals?

3. About the issues • Why do we ask? • Do we need a more coordinated Nordic energy policy? • Is more coordination possible given national differences? • Starting point: Are current energy policies adequate from a Nordic perspective? • Not easy to provide clear answers: • It is difficult to measure to what extent targets are being met • Whether policies are successful depends on the viewer • Targets may be different and conflicting nationally as well as internationally • Ideal situation is not attainable • Hierarchy of policy targets and clear priorities • Concrete and measurable targets • Adequate and clear-cut policy measures

4. Policies significant for the energy sector • Energy policies • Efficiency • Security of supply • Environmental policies • Climate policies • Nature conservation • General policy areas • Industrial policies • Employment and economic growth • Rural policies • Income distribution policies Politics is to find solutions where there is conflict between demands: --- Compromises --- --- Priorities --- … in a dynamic and complex real world

5. National goals Denmark Wind power Energy efficiency Finland Nuclear power Peat Norway Conservation of water systems Domestic gas Dry year issues Sweden Nuclear power Domestic fuels Security of supply International (common) goals Climate policies Kyoto EU EU ETS (bubble) Deregulation Non-discriminating trade Competitive prices for industries Renewables targets Nordic Efficient electricity market Sustainable energy system Efficient organization of transmission Prioritized policy goals - overview

6. Examples of conflicting goals • Environment versus efficiency • Expensive wind power in stead of cheap coal power (DK) • Environment versus security of supply • Decommissioning of nuclear power (SV) • Required CO2 sequestration stops profitable gas power (NO) • Conservation of river systems versus new hydro power (NO, SV) • Efficiency versus security of supply • ”Excessive” use of expensive domestic fuels (DK, SV) • Cheap imports in stead of new domestic capacity (NO, SV) • Measures to ensure availability of effect capacity blurs price signals on scarcity (NO, SV)? • Efficiency vs. industrial policy • Efficient energy prices versus competitive industry (NO) • Cost efficient renewables policy versus regional policy (SV)

7. Conflicting policies between countries • Conflicting priorities • Nuclear power (SV/SF) • CO2 emissions (N/DK) • What are the national interests? • Efficient renewables policy or domestic industrial policy • Complex political picture  need to compromise • Dynamic conflict picture • Tensions between • National and international considerations • Environment and industrial policies/competition • Market and governance

8. National, Nordic or European perspective? The same goal can mean different things • Example: Security of supply • Sweden: Effect capacity • Norway: Dry year • Finland: Import dependency • Changes in focus and priorities create challenges • Domestic renewables • Administratively induced investments in effect capacity undermines the market mechanism • New interest in nuclear power • Coal more attractive than gas and oil (domestic resource/well functioning world market) • New interest in long-term gas contracts  New dynamics: The time of surplus capacity gone!

9. Development trends in energy policies Changes in priorities over time • Changes in public attitudes • Changing governments, cf. gas power in Norway • Not just political parties, but even political personalities • External chocks, e.g. dry years and black-outs • External pressure and directives, e.g. from the EU

10. After deregulation Before deregulation Effektivitet Effektivitet Försörjnings- säkerhet Effektivitet Miljö Miljö Försörjnings- säkerhet Försörjnings- säkerhet Effektivitet Tillväxt och sysselsetting Miljö Possible trend in priorities Effektivitet Miljø

11. How can policies be compared and evaluated? • Can differences in priorities be measured? • What does differences in wording mean? Difficult to interpret! • How concrete are targets? • Quantifications and systems for measuring of compliance • Which policy measures are implemented? • Specific vs. general policy measures • Coherence between targets and measures • Systems for evaluation • Are solutions found nationally or internationally? • Are goals set (and measures implemented) on the basis of national initiatives? • International arena as detour? • International arena as commitment? • Find interesting cases and analyze in depth

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