Nordic Energy Research

This report explores how Nordic countries can ensure security of electricity supply amid the green transition. As wind and solar power grow, so do concerns about system adequacy during periods of low renewable generation and high demand – so-called Dunkelflaute events.

The report presents a toolbox of market-compatible support schemes designed to address gaps in firm capacity and flexibility. It evaluates both existing and new mechanisms, such as:

• Dispatchable Flexible Reserve – to provide seasonal reliability during critical shortages;
• FRR Availability Obligation – to improve local flexibility, particularly where systems depend heavily on interconnectors;
• Strategic Reserve 2.0 – a modernised, ringfenced reserve for rare, high-impact events;
• Market-wide Capacity Mechanisms – acknowledged but not recommended due to high cost and risk.

Each option is assessed for cost-efficiency, effectiveness, and compatibility with EU rules. The report also examines the role of cross-border coordination, encouraging Nordic cooperation in both risk assessment and possible joint mechanisms to reduce costs.

While support mechanisms may be needed in specific cases, the report emphasises that improving the energy-only market should remain a priority – and that any intervention should be carefully targeted, justified by rigorous needs assessment, and designed to minimise distortion and public cost.

The report was commissioned by the Nordic Electricity Market Group (EMG) under the Nordic Council of Ministers. Nordic Energy Research led the work with AFRY as consultant.