StormGeo, an Alfa Laval company, is forecasting a persistent Nordic net power surplus – contrary to expectations of a near-term deficit – owing to an unexpected drop-off in electricity demand for hydrogen and green steel in the region, according to its latest ‘Nordic Long-Term Power Market Outlook 2026 to 2055’. The specialist provider of energy market analytics is also raising its medium-term power-price outlook towards 2030, which could support renewed onshore wind and solar development.
“We expect the Nordics to remain a net power surplus region over both the medium and long term. This reflects the combined effect of our demand-and-supply outlook,” commented Sigbjørn Seland, chief analyst at StormGeo. He points out that this runs counter to the prevalent market view that strong regional electricity demand growth will erode today’s power surplus and push the region into deficit within a few years.
The most unexpected finding in the latest outlook is a reduction in the long-term electricity demand forecast for the Nordic region, according to Seland. The main reason is that StormGeo now expects green steel projects to use much less electricity to produce hydrogen. “Rising costs at Sweden’s Stegra project have led us to lower our forecast for future demand,” he says. StormGeo’s forecast for hydrogen-related demand in 2055 has fallen from approximately 50 TWh to 15 TWh, which more than offsets the growth in demand from data centres. “This … highlights how quickly the outlook for major industrial projects can change, even as data centres are emerging as a robust source of new demand,” Seland says.
Biggest shift
The biggest shift in the current outlook versus the previous spring edition is that the medium-term price prognosis towards 2030 has been revised upwards by the company’s Energy Analytics team. This is mainly driven by markedly higher natural gas prices that are also set to lift alternative hydropower values. The raised price forecast is further supported by lower wind output than previously forecasted over the coming years and stronger anticipated growth in data centre consumption amid expansion of AI.
Although wind generation has fallen short of modelled volumes, StormGeo believes onshore wind and solar investment will regain momentum to impact the supply side, underpinned by the Nordic region’s “substantial untapped potential for onshore wind”.
Project economics
Uncertain prospects for hydrogen-related consumption may release grid capacity due to withdrawn projects that can open up opportunities for other users, Seland points out. The Nordics remain attractive for large consumers over the longer term, he says, because of relatively stable framework conditions and comparatively low power prices, even with the higher medium-term price forecast.
