EU: New Nuclear’s Struggles in Nordic Power Markets

As planners in Helsinki and Stockholm eye new nuclear, any newbuild proposals will have to contend with a Nordic electricity market in which prices are lower on average than the rest of the EU, and more often negative, and where generators are only compensated for the electricity they produce — not for their available capacity. These factors make it difficult to invest in new nuclear without some form of fixed price guarantee, such as a power purchase agreement (PPA) or capacity market scheme, to ensure profitable operations. While the Nordics may be dealing with lower and more negative prices than other countries, such factors are becoming ever more common across Europe, where planners of all new clean generation must take these electricity price trends into consideration when deciding on whether to deploy and how to finance new generation and particularly new power reactors.