Four key aspects of energy management we will see in the Nordics in 2023

Early and significant public support for EVs through subsidies, incentives and tax exemptions has resulted in very mature EV markets. This is primarily led by Norway, where EVs comprised a record 80% of all new cars sold in 2022. The country rolled out an extensive charging network, with over 16,000 charge points, of which 5,600 are fast chargers - a large challenge for the electricity grid.

The Nordics are also winning the heat pump race. In Norway, for example, there is one heat pump for every four people – and these are powered by almost 100% renewable electricity. In Finland, 70% of small, new-build households now choose to install a heat pump. 

So, it is clear that the Nordics are highly advanced when it comes to the fast and widespread distribution of clean energy assets. But what can we expect in the future? In essence, the huge rise in electricity-generating and -consuming devices means that adopting sophisticated digital solutions are decisive to ensure that supply and demand are balanced, and that grid limitations are not breached.

Let’s take a look at some of the biggest trends and challenges we expect to see in energy management in the Nordics in 2023.

1. Increase in rooftop solar and HEMS 

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Due to their reliance on hydropower, wind and nuclear, the Nordic countries have historically not focused heavily on solar. However, the benefits of small-scale rooftop solar in combination with Home Energy Management Systems (HEMS) are now coming to the fore. Sweden, Denmark and Finland are increasing the installed PV capacity, supported by public subsidies that focus increasingly on systems below 20kW. 

Norway, recognizing the necessity for HEMS in combination with rooftop solar, introduced a public subsidy for energy management systems alongside the existing PV subsidy. 

The takeaway? Small-scale solar will become more important and widespread. Connecting the PV with heat pumps, EVs and batteries with a HEMS can ensure that locally-generated power can be optimally used to maximize self-sufficiency, lower costs and ease grid congestion.

2. Demand-side flexibility – Time-of-use tariffs and intraday trading

This growth in distributed generation is shifting the focus downwards in the value chain. Since renewable energy generation is inherently less reliable and regulated than centralized generation, the need for flexibility elsewhere in the system increases. As a result, the importance of demand-side flexibility is increasing exponentially.

In Sweden, for example, there are significant price differences between the Northern and Southern regions, and there are often issues in North-South transmission. On 12 February 2021 for example, the market price for electricity in Sweden’s southern price areas was €250/MWh, while the average for the entire day was €80. Reducing demand during stressed hours through demand-side response would lower and stabilize the price per kilowatt hour, and reduce the risk of electricity shortages in vulnerable regions.

Therefore, extending HEMS and existing time-of-use tariffs to participate in intraday markets enables companies and users to leverage such price fluctuations. This enables new revenue streams, keeps energy bills to a minimum and also balances the entire system.

3. Rising number of EVs causes challenges for the grid

We’ve already mentioned the huge increase in EVs and chargers in the nordics. Ongoing subsidies (e.g. in Finland) mean that this pace will not slow down anytime soon.

In Sweden, for example, notoriously bad grid quality means a lot of investment would be required to make the grid capable of powering such a huge increase in charging infrastructure. Similarly, in Denmark, installing a grid connection point has a wait time of around one year and is extremely costly. Luckily, there is another way. 

To keep the need for grid extensions to an absolute minimum, local dynamic load management will be a vital solution to reduce CAPEX - taking into account other consumption, for example, building loads at a retail store or a production facility. This enables charge point operators to increase the EV charging capacity on a site by up to 8x. 

To reduce the grid fees on an ongoing basis, adding peak shaving enables a reduction in peak loads of up to 76%, while simultaneously lowering operational expenditure. 

4. Local gateways as the heart of future energy management systems

The use cases for energy management solutions are becoming more and more complex and data-intensive, e.g. the above mentioned intraday trading or the participation in Frequency Containment Reserve (FCR) markets. These use cases require zero latency and 100% uptime to ensure a reliable system. 

Avoiding long connection times and the chance of connection issues in an increasingly interconnected system is vital to maintain stability and reliability, particularly at sites with many energy assets.

Furthermore a high degree of flexibility is needed, to include different devices manufacturer-independent, fast and secure. Local gateways like the gridBox will become a decisive tool to provide the ease and speed for scaling clean energy projects. 

"Now companies must focus on implementing more complex use cases with holistic, smart energy management solutions"

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Account Executive responsible for the Nordics at gridX, Maximilian Müller is excited for the region to take the next step in the clean energy era. “The Nordics are incredibly advanced when it comes to the adoption of clean energy assets – now companies must focus on implementing more complex use cases with holistic, smart energy management solutions that will make renewable electricity more cost-effective, scalable and reliable than ever before.”