According to the World Bank, all five Nordic countries are among the top 20 countries in the world in terms of renewable energy production per capita. These countries have made significant commitments to achieving a sustainable and green economy, setting ambitious targets to reduce carbon emissions and increase the use of renewable energy sources.
The green transition refers to the process of shifting from an economy based on fossil fuels and other non-renewable resources to one that is based on renewable energy sources, circular economy principles, and sustainable practices. The transition is driven by the need to reduce greenhouse gas emissions, which contribute to climate change, and to protect natural resources for future generations.
The Nordic countries, which include Denmark, Finland, Iceland, Norway, and Sweden, are at the forefront of the green transition. According to the World Bank, all five Nordic countries are among the top 20 countries in the world in terms of renewable energy production per capita. These countries have made significant commitments to achieving a sustainable and green economy, setting ambitious targets to reduce carbon emissions and increase the use of renewable energy sources.
Each of these countries are adopting strategies based on their unique mix of resources and challenges to work towards emission reduction goals. Regional cooperation is also part of the long-term planning for reaching these goals, as will be seen below.
Denmark
Denmark is a Nordic country with an area of 16,580 square miles and a population of approximately 5.9 million. It is one of the smallest countries in the region and is surrounded by sea, with significant wind resources. The energy crisis in the 1970s led Denmark to invest in wind power, which made it a pioneer in modern commercial wind energy technology. In fact, Denmark was the first country to install a multi-megawatt turbine in 1978, and in 1991, the world’s first offshore wind farm was opened in Vindeby.
Today, Denmark exports wind energy technology, which is worth billions of Danish Kroner, accounting for DKK 54.1bn (USD 7bn) in 2020 and generates thousands of jobs in the industry. Of Denmark’s electricity consumption, approximately 50% is provided by wind and solar energy, 20% by renewable biomass and biofuels, and the rest from fossil fuels. Denmark decided in 1985 not to build nuclear power plants in the country.
The Danish Climate Act aims for a 70% reduction in carbon emissions by 2030 relative to 1990 levels and has set a goal of net-zero emissions by 2050. The government plans to triple renewable electricity production to 104 TWh by 2030, according to an analysis by Green Power Denmark. To achieve this, the Danish government has launched a PtX (power-to-X, i.e. conversion of power production to carbon-neutral fuels) strategy, aiming to build 4-6 GW of electrolysis capacity for green hydrogen production by 2030, which can potentially deliver CO2 emission reductions of 2,5-4,0 million tons. Additionally, the government unveiled plans in September 2022 to ensure that Denmark has a domestic 100% renewable flight route by 2025 and that all domestic aviation will be renewable by 2030.
Furthermore, Denmark has the potential to become a large exporter of both renewable power and PtX products by 2050 due to its enormous renewable resources and a well-connected electricity grid to continental Europe, according to Nordic Energy Research, an intergovernmental organization within the Nordic Council of Ministers. One scenario predicts that Denmark could generate 35 TWh of solar energy in 2050 while offshore wind generation could reach 210 TWh, bringing total wind generation in Denmark to 230 TWh in 2050. Today, Denmark’s electricity consumption is approximately 36 TWh a year and this is expected to rise to over 200 TWh in 2050, according to the Danish Transmission System Operator (TSO), Energinet.
Sweden
Sweden, the largest of the Nordic countries, covers an area of 173,860 square miles and has a population of around 10.5 million. It is home to several industries such as car manufacturing, iron & steel, and forestry. Sweden has vast sparsely populated areas suitable for wind energy farms, and it relies heavily on hydroelectric and nuclear power in its energy mix. Almost 75% of Sweden’s electricity production comes from hydroelectric supplies and nuclear power, while around 16% comes from wind power.
The Swedish Climate Act from 2021 aimed to achieve net-zero emissions by 2045, with emissions from activities in Sweden reduced by at least 85% compared with 1990 while the remaining 15% was to be achieved through supplementary measures such as increased carbon sequestration in forest and land, carbon capture and storage technologies (CCS) and emission reduction efforts outside the country. Sweden also targeted to gradually replace biomass and nuclear energy with wind energy.
Norway
Norway covers an area of 148,729 square miles and has a population of 5.4 million. The country is a major oil and gas producer, with nearly all the oil and gas produced on the Norwegian shelf in the North Sea being exported. However, it is also famous for its mountain ranges, abundant lakes, steep valleys, and fjords, which make it an ideal location for the development of hydropower.
And indeed, Norway is the largest hydropower producer in Europe, with more than 90% of its electricity generated by hydropower, and is also and a major exporter of electricity to Europe. In early 2021, the country had 1,681 hydropower plants with an accumulated installed capacity of 33 GW. Water can be stored in reservoirs until needed, allowing for quick changes in production, and Norway’s reservoir capacity represents roughly half of the total energy storage in hydropower reservoirs in Europe.
Unlike wind and solar power, hydropower in not intermittent; with the increasing number of cross-border interconnectors, that enables the transfer of electricity from one national grid to another, hydropower from Norway will be able to help neighboring countries manage the challenges of a future power system with more intermittent power from wind and solar.
Norway’s access to inexpensive hydropower has also enabled it to be a global leader in electric vehicles, almost entirely powered by hydroelectricity. In 2021, electric cars accounted for 65% of new car sales in Norway.
Despite its electricity generation being almost exclusively renewable, Norway’s oil and gas industry remains a large emitter of CO2. Norway has set a climate target of reducing its emissions by at least 55% by 2030. Hydrogeneration is expected to rise modestly in the future, while wind power generation is expected to increase significantly. In May 2022, the Norwegian government launched a major offshore initiative with a target to allocate 30 GW of offshore wind production capacity by 2040, which is nearly equivalent to the amount of electricity currently produced in Norway.
Finland
Finland’s area is 130,678 square miles with a population of 5.6 million. Located in the northeastern part of the Nordic region and bordering Russia, it is known for its many lakes and vast forests that cover approximately 75% of its land area.
Finland lacks fossil fuels such as oil and gas, but it has nuclear energy and wood-based fuels, extensive wood reserves and peat, which can be burnt to produce electricity and heating.
Renewable energy sources cover just over half of Finland’s electricity production, primarily hydropower, but renewable wood-based fuels, mostly derived from forest industry by-products and wood residues, and with the share of wind and solar rising. Nuclear power covers roughly one-third of Finland’s electricity generation, and the rest is produced from fossil fuels and peat.
Finland has ambitious goals to be carbon-neutral by 2035 and carbon-negative soon after. Achievement of these goals depends largely on the future management of Finland’s forests and the ability to retain the forests as carbon sinks that can accumulate and store CO2. Emissions from deforestation have risen over the past decade, as trees have been cut down faster than new ones planted, shifting the forests from carbon sinks to carbon sources.
In the years towards 2050, older nuclear plants will be decommissioned, leading to a dramatic decrease in nuclear energy’s share of production. In the final mix, onshore wind capacity is expected to account for 45% of total generation, with the rest equally coming from biomass, nuclear, and hydropower production.
Iceland
Iceland, with an area of 66,467 square miles and a population of 376,248, is a unique country located in the North Atlantic Ocean. Lying on the active geologic border between North America and Europe, it is characterized by active glaciers, repeated volcanism and geothermal phenomena, such as hot geysers. Iceland is a pioneer in using geothermal energy for heating and generating electricity, and nearly 100% of its electricity and heating is met with renewable sources: 73% of the country’s electricity production is covered by hydropower and roughly 27% by geothermal power. Heating needs are also met by renewables: 90% by geothermal power and 10% by renewable electricity.
However, despite almost entirely meeting its electricity and heating needs through renewable sources, Iceland has yet to meet the challenge of greenhouse emissions. The country’s ‘s biggest sources of emissions are industrial processes, road transport, agriculture, fisheries, and waste management.
Iceland is committed to becoming carbon-neutral by 2040 and reducing greenhouse emissions by 40% by 2030. To achieve this, the country is exploring new technologies such as carbon capture and storage and transitioning to cleaner forms of transportation. Additionally, Iceland is investing in research and development of sustainable practices in its industrial, agricultural, and fisheries sectors.
Increased Collaboration in the Nordic Energy Sector
In 2019, Denmark, Finland, Iceland, Norway, and Sweden signed a joint Declaration on Carbon Neutrality, committing to achieving carbon neutrality. The declaration includes an assessment of scenarios for achieving carbon neutrality, including the implications for various sectors. The declaration also emphasized the necessity and benefits of collaborative action among the Nordic countries.
Collaboration in the Nordic energy sector is already extensive, with a highly interconnected electricity market, except for Iceland. In future, however, collaboration will become even more essential as the energy mix is transformed. Wind power generation is expected to become dominant, but it is not expected to meet the demand for renewable electricity, which will also significantly increase towards 2050 as high-emission sectors decarbonize. In this context, as mentioned, Norwegian hydropower will play a crucial role in balancing the Nordic power system on days with little or no wind while significant investments will be required for collaboration, including infrastructure such as interconnectors for the transportation of new PtX fuels.
Nordic Countries Leading the Green Transition
The Nordic countries have set the bar high in their commitment to a green and sustainable economy, driven by the need to reduce greenhouse gas emissions and protect natural resources. With their abundant wind and hydropower capabilities, these countries have made significant strides in renewable energy production, have set ambitious targets to reduce carbon emissions, and are even making plans to export renewable energies beyond the Nordic region.
As the world faces an increasingly urgent need to address climate change, the Nordic countries serve as a model for other nations to follow in achieving a green and sustainable economy. With their commitment to renewable energy sources, circular economy principles, and sustainable practices, the Nordic countries are leading the way in the green transition.
Further reading:
- The Ministry of Foreign Affairs of Denmark introduces you to the Global Climate Action Strategy
- The OECD analyzes Denmark’s focus on climate policy and labour market inclusion for a strong and sustainable recovery
- The Danish Ministry of Climate, Energy and Utilities explores how during the COP, Denmark passes Climate Act with a 70 percent reduction target
- The Government of Norway presents its ambitious offshore wind initiative
- This Reuters article explores Norway’s oil production seen rising by 15% in 2023
- The Ministry of Environment looks at Finland’s national climate policy
- The Ministry of Foreign Affairs of Finland explores the country’s Action Plan for Climate Smart Foreign Policy
- iae explores Finland‘s country profile and energy statistics
- Statistics Finland delves into how over one-half of Finland’s electricity was produced with renewable energy sources in 2020
- The Government of Iceland discusses Climate Change
- Nordic Energy Research delves into Nordic Clean Energy Scenarios
The opinions expressed in this text are solely that of the author/s and do not necessarily reflect the views of hbs Tel Aviv and/or its partners.
