What effects did EU emergency measures to tackle high energy prices have?

On behalf of Nordic Energy Research, we have analyzed the effects of the EU's emergency measures against high energy prices, which were adopted on 6 October 2022.

The regulation allows some flexibility in how the measures can be introduced. We have mapped how Sweden, Denmark and Finland have implemented the measures, as well as actors’ reactions to the measures. We also discuss the short- and long-term effects of the measures on the Nordic power market. Our main conclusion is that the measures, as implemented in Sweden, Denmark and Finland, do not affect the short-term production decisions of power producers.

- The long-term effects associated with investments depend on market participants' expectations regarding crisis measures in the future. To avoid investment postponement, it is important to communicate that these crisis measures were a one-off measure, introduced as a response in an extraordinary situation – as also stated in the EU regulation, says project leader Orvika Rosnes.

We also find that energy consumption in the Nordic countries was significantly reduced in the winter of 2022/23. We cannot conclude that this is due to the emergency measures – other factors, such as higher prices and milder winter, also point to lower consumption. Nevertheless, it seems likely that increased information about the situation in the power market has contributed to reduced consumption.

The report is available here: https://pub.norden.org/nordicenergyresearch2023-04/