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Solar to be cheapest Nordic energy source by 2035

(Montel) Solar will outcompete onshore wind to become the cheapest source of new power generation in the Nordic region by 2035, while new nuclear would not be profitable, consultancy StormGeo said on Tuesday.

“Both solar power and onshore wind will be very profitable [in] the coming decades. Utility-scale solar will be the cheapest source in the Nordics by 2035 with a long-run marginal cost (LRMC) of EUR 31.50/MWh,” chief analyst Sigbjorn Seland told Montel.

The LRMC indicated how high power prices had to be to ensure investments in new capacity were viable.

Offshore wind would have an LRMC of EUR 45-49/MWh by the middle of the next decade, according to StormGeo’s latest analysis.

These technologies were likely to drive the region’s green transition going forward, said Seland, leading to 160 TWh of new renewables capacity coming online between 2023 and 2035.

This would amount to almost 40% of last year’s Nordic power generation.

“Strong surplus”
“If these investments are made, the Nordic region will maintain a strong power surplus in the 2030s and have significantly lower prices than [the rest of] Europe,” he said.

Relatively low power prices would also deter investments in new nuclear capacity he said, unless government schemes aimed to incentivise new production altered the picture.

“Based on our cost expectations, it will be super profitable to prolong the lifetime of existing reactors but not profitable to build new nuclear reactors, be it large-scale or small-modular reactors (SMRs),” he said.

The region would also see a sharp rise in battery and hydrogen investments to help balance a more volatile power market going forward, said StormGeo.

By 2050, there would potentially be 20 GW of battery power capacity, while roughly 100 TWh of the renewables would be used to produce green hydrogen.

Reporting by:
Olav Vilnes
13:58, Tuesday, 14 March 2023

Editing by:
Robin Newbold
13:58, Tuesday, 14 March 2023