This report provides insights into the Nordic energy market and the dynamics of energy distribution between the North and South
Increasing North-South divide in the Nordic energy markets
New price caps in Norway, Sweden, and Germany risk leading to increased differences.
Nordic countries are introducing price caps and tax cuts to counteract increased electricity prices
The price divide between the northern and southern parts of the Nordics is growing
Prices and volatility are higher in the southern Nordic bidding zones, impacted by Germany
In the north, prices have stayed around the same level or declined
Norgespris and price caps risks further increasing the price differences between North and South
Growing energy market intervention
Nordic power market volatility surged during 2025, and prices have been higher than in 2024 driven partly by (from a consumer point of view) non-favorable weather. ‘Dunkelflaute’, i e when wind and solar energy is missing from the energy mix, leads to high prices in a system where more volatile renewable energy sources have been added to the system. Energy consumers should ideally be more flexible - shifting more of their consumption to periods with higher renewable energy production and lower prices.
Prices falling in the North, rising in the South
In recent years, we have seen growing dissatisfaction in the Nordic countries due to rising price differences regionally within the countries, graph 1 shows clearly why that is the case. As we can see, wholesale prices in the southern bidding areas of the Nordics have risen significantly over the past years, whereas prices in the north have fallen.
In Denmark, prices rose almost threefold in 2023-25 compared to 2015-21
Southern Norway (NO1, NO2 and NO5) saw almost twice as high prices
In Southern Sweden (SE4), prices are around twice as high
Northern Norway (NO3 and NO4) and Northern Sweden (SE1 and SE2) have experienced falling prices
Conclusion
As the tables in this report show, in the Nordics, price gaps between northern and southern price areas are growing. The south is coupling more and more with power prices in Germany, where the availability of solar and wind is extremely decisive. In the north, hydro resources are still essential. Therefore, even if the Nordics remain centralized with price areas within the same power market, regionally the landscape is becoming increasingly differentiated.
The political initiatives introduced during 2025 risk exacerbating the problems they are meant to solve, especially the high electricity prices and high volatility.