WHAT IS NORDEL?
Nordel is an association for electricity co-operation in the Nordic countries. It was established in 1963. Its primary task is to create prerequisites for efficient utilisation of the Nordic electricity generation and transmission systems. Nordel acts as an advisory and recommendatory body for co-operation between the Nordic system operators, and a forum for market participants and the system operators in Denmark, Finland, Iceland, Norway and Sweden.
Due to the develop of the Nordic electricity market, the opportunities for actors to expand their operations outside the borders of individual countries improve, which further strengthen the unique market shared by these countries. The roles and regulations are in coordinance with structural differences between the countries. The bodies bearing system responsibility in each country have better prerequisites for closer co-operation and at the same time, the need for co-operation has increased. Against this background, Nordels Executive Board has on several occasions discussed Nordels composition and organisational structure in relation to the outside world. This issue came up at Nordels Annual Meeting in Funen, Denmark, on 28 August 1997. It was concluded that the new situation makes it necessary to develop the organisation so that the new needs of enterprises bearing system responsibility pertaining to Nordic co-operation are taken into account. The Executive Board was urged to pursue the matter further so as to ensure that Nordel can both act as a co-operation body for enterprises with system responsibility and continue as a forum where both enterprises with system responsibility and other actors meet and work together. Questions concerning technical co-ordination of the Nordic electricity system will continue to make up the organisations core activities, and the importance of carrying on the good traditions of co-operation were emphasised. The Executive Board appointed a working group to prepare a proposal for new By-Laws for Nordel. The goal is to discuss the proposal for new By-Laws at an extraordinary meeting during spring and to approve the By-Laws in their final form at the Annual Meeting in August 1998.
Besides the above issue, the Annual Meeting discussed the Annual Report for 1996, the Committees reports and plans, and the current power situation in each Nordic country and collectively for all the Nordic countries during the next three years. Reports concerning the power balance and transmission capacity in the Nordel system in 2005 were approved.
The Annual Meeting was also informed of the work being carried out to create a joint Nordic electricity exchange. A management group monitors how the goals expressed in the report on the Nordic exchange in 1996 have been reached. It was noted, among other things, that efforts should be taken to abolish transmission fees between countries. It is also important to harmonise taxes and fees to ensure equal opportunities for all actors.
The trend towards more open electricity markets in Europe continued. Nordels contacts with other organisations in the electricity sector have remained very good &SHY; a fact that was also confirmed during the annual meeting between the management bodies of UCPTE and Nordel.
Nordel's By-laws were revised in August 1998 to respond the demands set by the far developed Nordic electricity market.
At the Annual Meeting, a Chairman and a Vice-Chairman is elected among the Nordel members for a period of three years. The assignments of Chairman and Vice-Chairman circulates at three-year intervals between the member countries. The Chairman of Nordel organizes a secretariat with a secretary in his own country. The Chairman is responsible for the administrative work and the expenses involved in this.
The Executive Board is Nordel's executive body. The members of the Executive Board are appointed for a period of three years. The Executive Board shall include no more than three Nordel members, in addition to the Chairman and Vice-Chairman of Nordel. Each country shall be represented by no more than one member on the Executive Board. In addition, both the electric power generation and transmission sectors shall be represented. Nordel's secretary shall also act as secretary for the Executive Board. The Executive Board will meet at the request of Nordel's Chairman. The Executive Board appoints a Liaison Group to support the secretary and the Executive Board of Nordel in their work. The Liaison Group, which is led by the secretary of Nordel, shall consist of a maximum of one person from each country. The Liaison Group meet when necessary, at the request of Nordel's secretary. Nordel has two permanent committees:
- the System Committee
- the Operations Committee
The committee members shall be appointed for a period of three years. In the election of members for the two committees, efforts shall be made to achieve a certain circulation among the Nordel members. The Chairmen shall be appointed by Nordel at the Annual Meeting, and the other members by the Executive Board on the recommendation of each country's Nordel members. The Chairmen of the committees shall appoint a secretary and inform the Executive Board accordingly. Each committee shall have no more than ten members. All member countries shall be entitled to participate in the committee work. The fields of electric power generation and transmission shall be represented on both committee. The committees will meet when necessary, at the request of the Chairman of the two committees respectively.
The System Committee is responsible for long-range issues related to technical systems. The Committee´s work includes :
A major proportion of the work is done by the two working groups subordinate to the System Committee. The Operations Committee is responsible for technical system matters on a shorter term and for the technical framework of Nordic electric power interchange and day-to-day operation.
The primary objectives of the Committee are:
Two permanent working groups have been set up under the Operations Committee:
The members of Nordel shall comprise representatives of the system operators and the market participants. The members from each individual country are responsible for appointing their own successors. This must be carried out after consultation with the system operators and the market participants in the respective country. Four members shall be appointed from each country. Deviation from this figure may be permitted, subject to specific approval. At least one of the four representatives from each country must represent enterprises which, in accordance with guidelines set by the authorities, act as system operators in that country. The other members must be representatives of market participants having technical equipment of major importance to the operation and development of the electric power system. Members shall be elected for a term of three (3) years. When electing new representatives, attention should be paid to achieving some rotation of the members representing each country, within the guidelines set out in Section 3. If necessary, new representatives may be elected during the course of a three-year period, to serve for the remainder of that period.
The members of Nordel comprises leading representatives of the system operators and other actors with technical equipment of importance to the operation and development of the electric power system. The Chairman is elected for a term of three years and rotating between the countries. The Chairman is also responsible for the Secretariat.
Nordel's executive body is the Executive Board. The Board presents initiatives and makes decisions on current matters, and implements the decisions made at Nordel's Annual Meeting. The Executive Board is also responsible for all Nordel's external communication activities.
A large proportion of Nordel's work is carried out by Nordel's committees (Planning Committee, Operations Committee and Transmission Pricing Committee) and working groups.
Objectives and tasks
The main objective of Nordel is the technical co-ordination and determination of recommendations within following spheres:
The purpose of Nordel is to issue advice and recommendations promoting an efficient electric power system in the Nordic region, taking into account the conditions prevailing in each country.
The organisations primary objective is to create and maintain the conditions necessary for an effective Nordic electricity market. Nordel seeks to further international co-operation and public relations activities pertaining to the electric power system and the electricity market. Further, Nordel shall maintain and develop links with organisations and the authorities, particularly in the Nordic region and in the rest of Europe.
In addition, Nodel shall compile and disseminate impartial information about the Nordic electric power system and about the Nordic electricity sector.
The Grid System in the Nordic Countries
Exchange of Electricity
Total Energy Supply
Taxation of electrical energy in the Nordic countries varies with respect to both structure and level. The taxes have been raised substantially in most countries during the 90s, and considerable structural changes have also been introduced. Long-range planning in these questions is of great importance in the capital-intensive power industry, for instance, when companies make decisions about investments. If electricity taxes imposed on power generation vary from country to country within the same market area, a serious problem arises because enterprises in the individual countries are denied the opportunity to compete with each other on equal terms. In consequence, Nordel has called attention to this drawback and has recommended harmonisation of electricity taxes. The need for more uniform electricity taxation has also been stressed in connection with the development of a Nordic electricity exchange. The table below shows the electricity taxes that have been imposed on power generation and consumption in the Nordic countries as of the beginning of 1998. When compared to 1997, the total tax burden has risen. The only major structural change has been implemented in Sweden, where some of the tax on hydropower generation has been shifted to the consumption sector. To enable comparison between the countries, the taxes have also been converted to pennies/kWh. Some assumptions have been made, for instance, with respect to currency exchange rates and the characteristics of power plants; the-refore the table should only be seen as indicative.