Toolbox for a Secure Energy Supply

The Nordic countries are reassessing system adequacy due to the changing security situation and the evolution of the energy system in the green transition. Previously, the energy-only market was seen as providing sufficient investment incentives, but Nordic ministries are now considering European tools like Capacity Remuneration Mechanisms (CRM) and the Non-Fossil Flexibility Support Scheme (NFFSS). To support decision-making, the Electricity Markets Group commissioned a study on design options and their fit for Nordic needs. Before implementing a CRM or NFFSS, it is crucial to assess whether intervention is necessary. Market-wide CRMs are costly and should only be introduced if justified. Mechanisms must incentivise viable solutions, distribute costs fairly, and align with EU regulations while minimising market distortions.