The Nordic electricity system as a common-pool resource

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Uppsala university Department of Economic History

C-level thesis, spring semester 2011 Supervisors: Arne Kaijser, Professor in Technical History, KTH.

Lars Fälting, Senior lecturer, PhD, Department of Economic History, Uppsala

The Nordic electricity system as a common-pool resource

Anders Bäckman 2011-06-07

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Abstract

This thesis is about the work of Nordel, an advisory body set up in 1963 by the largest power companies in Denmark, Finland, Norway and Sweden. The purpose of Nordel was to strengthen and consolidate Nordic cooperation in the production and transmission of electrical power. The analysis has been conducted by using Elinor Ostrom’s framework for studying common-pool resources, which is described in her book Governing the Commons: The Evolution of Institutions for Collective Action (1990). The thesis concludes that Nordel reaffirmed the bilateral practises already established by the individual power companies and was circumscribed by national energy policies. Nordel’s main contribution to the Nordic cooperation was to act as a forum for common technical issues and general aims, and as a knowledge-producing organisation.

Keywords

Common-pool resources, institutions, socio-technical systems, energy policies.

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The Nordic electricity system as a common-pool resource

Introduction

The subject of this thesis is the national electricity systems of Denmark, Finland, Norway and Sweden, or more specifically the work of Nordel, a joint board set up in 1963 by the largest power companies in the above countries.¹ The main purpose of Nordel was to strengthen and consolidate cooperation in the production and transmission of power, to share and pool power reserves in order to enhance reliability, reduce investment and operation costs.² Two important types of cooperation were exchange of electrical power between the countries and joint ventures concerning

construction. In general, the object of Nordel was to work towards integrating the national sub- systems into a common Nordic electricity system, one could almost speak of a common-pool resource (CPR) into which the members of Nordel could tap.

The topic common-pool resources has drawn increasing interest in recent years due to environmental problems such as depleting fish stocks and retreating tropical forests. But how is this concept

relevant in the study of large technical systems as the one described above? It should be obvious, I hope, that natural and man-made structures share a common characteristic by simply being resource systems from which resource units can be drawn, whether those units are counted in fish, timber, kilowatt hours or any other type of unit. Although the Earth’s ecosystems perform invaluable services such as producing drinking water and pollination, I believe resources where natural and man-made structures are integrated or activities where human knowledge and technology manage natural resources such as agriculture and forestry will grow significantly in importance. This is, of course, neither a controversial nor a particularly original point of view, since the Earth’s growing population will demand more from those resources and activities. The link between the management of these resources and potential environmental problems is clear. So is the link between the construction and management of sewage systems, railway networks, roads, electricity systems, the Internet and several other large technical systems, but not primarily – in the line I am pursuing in this thesis – as infringements or destruction of the natural environment but rather as a part of this environment, a modern cultural landscape. I am certainly not, however, arguing that the construction of these systems always have beneficial outcomes. Roads and highways, for example, often interfere with natural habitats. I will instead simply argue that technology and technical systems have been an intrinsic part of human life for a very long time and will most likely remain so. I also believe that successfully managed these systems hold one of the keys to sustainability, that is providing humans

1 Iceland was also a member of the board, but only as an observer.

2 The tasks and responsibilities of Nordel was transferred to ENTSO-E, the European Network of Transmission System Operators for Electricity, in July 2009.

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Sida 5 av 50 with crucial resources and services yet avoiding environmental degradation. “Successfully managed”

should be understood to contain the widest possible range of options. Viewed this way, these systems are – from a human point of view – on a par with the Earth’s ecosystems and in equal need of fair and wise governance. Similar to the natural systems, they face increasing pressure from population growth but lack these systems ability to renew themselves; they are man-made, “dead”

structures that will enter a state of rapid decay unless properly maintained.

Good management, then, is as crucial when managing large technical systems as it is when managing fish stocks or tropical forests. Good management, in turn, hinges on successful cooperation, and the rules that govern this cooperation, since common-pool resources often cross national borders or other jurisdictions. In economic history, rules are often referred to as institutions. According to Douglass C. North, the influential economic historian, institutions are “the rules of the game in a society or, more formally, ... the humanly devised constraints that shape human interaction. ... they structure incentives in human exchange, whether political, social or economic.”³ I will in other words try to place my thesis firmly in a tradition where institutions play a crucial role, and where these constraints – not only “humanly devised” since energy systems depend on endowments in natural resources – shape the outcomes of cooperation. I will not, however, use North’s more general historical approach, but the framework presented by Nobel laureate Elinor Ostrom in her influential book Governing the Commons: The Evolution of Institutions for Collective Action (1990). The central theme for Ostrom, as North, is the rules, the institutions, governing human cooperation. Ostrom argues that participants in CPR situation can, and in fact do, communicate and cooperate to manage their common resources, as opposed to theories or models where the participants are locked in a situation which they are unable to change, for example the “prisoners’ dilemma” in which participants end up in a sub-optimal solution although they behave rationally.⁴

The thesis is organised as follows. I will start with presenting my purpose and my research questions, continue with an outline of Ostrom’s theoretical framework and how it can be applied to the Nordic electricity system. This will be followed by a brief discussion of sources and method. Next, I will explain the technical and economic incentives for cooperation in electricity systems. This will

constitute an indispensible background for my analysis. The following section, “The historical context and the roots of Nordel”, is a combination of providing context and making an analysis. The

contextual part concerns the European cooperation in electricity generation and transmission during the Post-War years and a brief sub-section on the electricity generating regimes in the different Nordic countries. The analytical part is a description of the creation of Nordel. The following two

3 North (1990), p. 3.

4 Ostrom (1990), p. 184.

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Sida 6 av 50 sections, “Power exchange” and “Planning and coordinating construction”, contains the analysis of my primary sources and thus constitute the main body of the thesis. In the final section, I present my conclusions.

Purpose and research questions

The purpose of this thesis is, as I stated above, to study the work of Nordel, a joint board set up in 1963 by the largest power companies in Denmark, Finland, Norway and Sweden. The work of Nordel is to a large extent used as an operationalisation of the cooperation within the field of electricity generation and transmission between the Nordic power companies. The thesis will, however, also specifically cover some of the activities of the individual power companies. In general, I will compare the constraints and opportunities in order to bring the incentives and the processes governing this cooperation into light. Moreover, I will try to place the work of Nordel and the cooperation between the Nordic power companies in its relevant historical context. I will study Nordel’s activities from its inception in 1963 to about 1972 when the first years’ work result in a number of important reports and publications.

By analysing the cooperation in the Nordic electricity system I also hope to provide some insight into the management on this type of large technical systems, whose, as I wrote above, successful

management I believe hold one of the keys to environmental sustainability.

My specific research questions are the following:

1. What were the incentives and what were the rules governing the power exchanges, and what were the main measures that Nordel proposed in order to develop the cooperation within this field?

2. What were the incentives governing the planning and coordination of construction, and what were the main measures that Nordel proposed in order to develop the cooperation within this field?

3. What were the constraints and the opportunities within which Nordel had to work, and what were the consequences of these constraints and opportunities?

As I stated above, I will use Elinor Ostrom’s framework as she presents it in her Governing the Commons: The Evolution of Institutions for Collective Action (1990). Although she has developed this framework further in her Understanding Institutional Diversity (2005), I will use the original

framework. This is fully sufficient for my purpose, compared to Ostrom’s aims, which are to probe deeper into the collective actions of humans and formalise the framework and concepts further.

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Sida 7 av 50 The research questions are intened to work as an operationalisation of Ostrom’s theoretical

framework. I will specify exactly how further below in the theoretical section. Already at this point, however, I would like to point out that this thesis is not about testing Ostrom’s framework. I will in fact take it as a starting point, accept its basic tenets as true, to investigate a specific historical process. This does not, on the other hand, rule out a discussion about whether the framework is a relevant and fruitful approach. But that discussion will have to wait until the concluding section.

I must emphasise that the focus of this thesis is about the rules and incentives, constraints and opportunities, governing the cooperation. I will not discuss electricity generation in the Nordic countries in general, apart from a brief historical exposé. And this will only cover the electricity systems, not the broad economic and social differences among the Nordic countries. Neither will the study contain tables and graphs showing quantitative data. This might seem odd since the intention of the Nordic cooperation to a large extent was to reduce investment and operation costs. Again, the thesis is focused on rules and incentives, and I have, I believe, included enough quantitative data to explain these rules and incentives, the constraints and the opportunities.

Theoretical framework

Reason for choice of theory and acknowledgements

Before describing Ostrom’s framework, I would like, briefly, to motivate my choice of theory. After all, given the subject, there are at least two natural frameworks to use. One obvious choice could have been the concepts and ideas developed by Thomas P. Hughes in his important Networks of Power: Electrification in Western Society 1880-1903 (1983). Or I might have chosen some of the concepts and ideas developed by Alfred D. Chandler in his Scale and Scope: The Dynamics of Industrial Capitalism (1990). As a brief and very general defence, I would say that Hughes’ and Chandler’s body of work, as I see it, are mainly focused on explaining processes, on the one hand large technical systems, on the other business organisations and business processes, where the common thread is initiation, growth, success or failure. Though their work is permeated with the importance of institutions, the rules of the game, and incentives created by those rules and other circumstances, the institutions do not play the role they do in Ostrom’s theoretical framework, and as they do in my choice of focus. I do not for a minute mean to say that this description provides an conclusive view of Hughes’ and Chandler’s work, but it nevertheless will have to serve as my motivation.

In some way, however, I cannot get around Hughes. The reason is that the work of a Swedish scholar, Arne Kaijser, features prominently in this thesis; in fact, I could not have done without it. Through

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Sida 8 av 50 Kaijser, who have incorporated some of Hughes’ ideas in parts of his own body of work, Hughes has found his way into this thesis. Particularly important for this thesis are Kaijser’s Controlling the Grid:

The Development of High-Tension Power Lines in the Nordic Countries (1995) and Trans-border integration of electricity and gas in the Nordic countries, 1915-1992 (1997). But perhaps the most important support is that Kaijser provided me with the topic of this thesis.

Other crucial scholarly work for this thesis has been, in the Nordic historical context, Lars Thue’s Electricity rules: The Formation and Development of the Nordic Electricity Regimes (1995), and in the European context, Vincent Lagendijk’s Electrifying Europe: The power of Europe in the construction of electricity networks (2008).

Ostrom’s framework for common-pool resources

The characteristics of a common-pool resource

What are the basic concepts describing a common-pool resource (CPR)? Typical examples of

common-pool resources are fisheries, grazing fields, aquifers from which groundwater can be drawn, but also man-made artefacts such as roads, the Internet, irrigation systems, etcetera. In Ostroms terminology, a common-pool resource has specific boundaries, a certain stock of a particular good (or service), from which a flow can be drawn. It must, however, be possible to replenish the stock; that is, a common-pool resource is renewable.

Common-pool resources may be understood as a combination of a public good and a private good.

Public goods are commodities or services “whose consumption by one person does not preclude others from also consuming” them.⁵ Typical examples include national defence or clean air. These examples are similar to the ones given above. A public good may, however, be characterised by exclusion, for example to get access to a cable television service or admission into a concert you have to pay a fee. But there is still no rivalry: as long as the fee is paid, everyone can (in principle) view until the capacity of the concert hall or the broadband cables are exhausted. This is not the case with private goods, which have both rivalry and exclusion: the same meal or a specific litre of petrol cannot be consumed by two persons at the same time. The common-pool resources share this feature with the private good: the individual resource units, the fish, the litres of water or space occupied by a car on a road, cannot simultaneously be used or consumed by two persons.

Much of the problem with common-pool resources, such as overuse or crowding effects, stems from this combination of free access and rivalry. Another name often used for common-pool resources are therefore open-access common property, resources “to which everyone has free access and an equal

5 Perloff (2008), pp. 622-623.

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Sida 9 av 50 right to exploit.”⁶ The problems of overuse are, however, not exclusively related to these open- access resources, but can also be prominent in resources owned collectively, such as by a group of private individuals, or a local, regional or national government. The heart of the problem, however, the problem Ostrom studies, is how groups of people manage, or fail to manage, these resources, irrespective of whether they are owned collectively or by no one.

People drawing resource units from a common-pool resource are called appropriators. Those making the resource available, or create the resource, are called providers. People may be appropriators and providers at the same time, as in the case of cooperation to build and use an irrigation system. But many times they are not: private companies, municipalities as well as cooperatives may provide heating, water, sewage, facilities, electricity, etc., whose resource units and services can be

appropriated by the inhabitants in a village, city or a metropolitan area. Provision and appropriation are, as Ostrom emphasises, two sides of the same coin, solutions to appropriation must match solutions for provision. According to Ostrom, appropriation is related to “various methods of allocating a fixed, or time-independent, quantity of resource units” whereas provision is concerned with “various ways of assigning responsibility for building, restoring, or maintaining the resource system over time”.⁷

Variables and incentives

The basic features of Ostrom’s framework are captured in figure 1 below. The box represents the internal world, circumscribed by the external world. These entities should not, not primarily at least, be understood as physical objects and the divide between them as a physical border. Instead, the internal world is a world of “individual choice”,⁸ choices which are made in a specific context, the external world. Both the internal world and the external world shape and influence the choices.

6 Perloff (2008), p. 620.

7 Ostrom (1990), p. 47.

8 Ibid., p. 37.

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Sida 10 av 50 Figure 1. Ostrom’s framework.

The internal world of choice is dependent on the following variables:

Internal norms Discount rate Expected benefits Expected cost

Internal norms are values and preferences guiding behaviour. The discount rate reflects commitment.

A low discount rate means that someone values an asset as much in the future as at this moment, while a high discount rate means that someone values instant satisfaction higher than satisfaction at a later point. In other words, a low rate reflects long-term commitment while a high means that preferences are focused on immediate returns. The former is conducive to cooperation in common- pool resources while the latter may not. The internal norms and discount rate influence how the expected benefits and expected cost are assessed. The expected benefits and expected costs affect the choices and strategies of the appropriators/providers, which in turn shape the outcomes of the cooperation, or non-cooperation.

This brings us to another important aspect of Ostrom’s framework, the effort to gain knowledge, since one must know what is at stake, what is to gain and to loose in the cooperation. Besides these strategic questions, there are also ones related to the daily operation of the CPR, for example how large a flow can be withdrawn before the CPR’s capacity to renew its stock is threatened? In other

Expected benefits

Expected costs Internal norms

Discount rate Choice of

strategies Outcomes External world

Internal world

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Sida 11 av 50 words, cooperation and management of common-pool resources are often associated with a large degree of uncertainty and lack of knowledge, a complex situation which may lead to considerable information costs in order to know what at stake, how large the stock of the CPR is and similar questions. Ostrom refers to these questions as situation variables, variables affecting the internal variables. These are represented as the block arrows in the figure above. Situation variables can be, as just implied, the information costs pertaining to the benefits: How many appropriators must share the CPR? What is the size of the CPR? Are its resource units dispersed and hard to extract? Can they only be withdrawn infrequently? What is the general condition and status of the CPR? The situation variables are related to my third research question, the constraints and opportunities within which Nordel had to work.

The situational variables can also be related to the cooperation, the negotiations, the process itself where participants decide to change or keep “the rules of the game”. They can also be related to after an agreement has been reached, when new rules has been established. Ostrom refers to the former as transformation costs. Examples of factors influencing transformation costs are whether participants share interests or if they differ widely, which higher-level rules are used to change lower-level rules, the skills and assets of the participants, whether the participants are free to change rules at all. The latter, after new rules have been established, Ostrom refers to as monitoring and enforcement costs. This may be technology to monitor behaviour, extract resource units or exclude outsiders from appropriation; as well as the legitimacy of the rules in use.⁹

Monitoring and conformance to rules is, Ostrom points out, one of three central problems in managing a CPR over time.¹⁰ The other two are commitment and supplying new rules, that is proposing and working out new rules. Ostrom notes that in a CPR (in most cases, at least, I assume) monitoring is a requirement for commitment, and commitment in turn is a requirement for

participants to engage in proposing new rules. Prior studies and theories have proposed that management of CPRs failed because humans rarely took on the task of supplying new rules. But Ostrom argues that humans have, in fact, created “institutions, committed themselves to follow rules, and monitored their own conformance to their agreements, as well as their conformance to the rules in a CPR situation. Trying to understand how they have done this is the challenge of this study.”¹¹ In relation to this, I would like to point out that Ostrom emphasises that it is necessary “to reflect on the incremental self-transforming nature of institutional change”.¹² In other words, and as I understand her point, failure does not necessarily mean that the process ends. On the contrary.

9 Ostrom (1990), pp. 192-205.

10 Ibid., p. 42.

11 Ibid., p. 45.

12 Ibid., p. 191.

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Sida 12 av 50 Outcomes are assessed, negotiations proceed and new rules are proposed. This iterative process is indicated by the dotted line in the figure above.

Institutional levels

Ostrom emphasises that it is necessary carry out the analysis of a CPR on several levels, which can be understood as level of authority or level for a certain type of activity. Ostrom refers to these as levels on analysis, but I will call them institutional levels since they are related to the different types of rules and the arenas to which they belong.¹³ The reason Ostrom makes this point is that a CPR situation involves several levels and that the levels are interrelated, affecting each other, but also that appropriators and providers may often, depending on the particular CPR situation being analysed, need to operate on several levels. Ostrom posits three levels: the operational, the collective and the constitutional. The activities and decisions are shown in table 1 below.

Table 1. CPR levels and the related decisions and choices.

Institutional level Decisions and choices

Operational Day-to-day decisions on provision, appropriation, monitoring and enforcement of operational rules within the CPR.

Collective Decisions on what policies and operational rules should govern the CPR, settlement of disputes.

Constitutional Decisions on who is eligible to participate on the collective level and what rules should govern the collective level.

The operational level involves day-to-day decisions about the provision, appropriation, monitoring and enforcement that are taking place within the CPR. The collective level revolves around decisions regarding the policies and management that should govern the CPR; perhaps also settlements of disputes. Formal arenas for collective decisions might, for example, be courts or regulatory agencies;

informal collective arenas can be private associations. At the constitutional level, decisions are taken regarding who is eligible to participate on the collective level and what rules should govern the collective level. Note that the constitutional level sets constraints on the collective level, which in turn sets constraints on the operational level. This is, of course, a top-down direction of influence, but the effects might also go in the other direction, for example by the technology used at the operational level, affecting and, or restricting the decision that are possible to make on the collective and constitutional levels.

13 Ostrom (1990), pp. 50-55.

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Sida 13 av 50 Note, also, that rules are governing decision-making at every level. These are, as Douglass C. North put it, “the rules of the game”, the institutions. Ostrom suggests that institutions can be defined as

“…the sets of working rules that are used to determine who is eligible to make decisions in some arena, what actions are allowed or constrained, … what procedures must be followed, what information must or must not be provided, and what payoffs will be assigned to individuals dependent on their actions.”¹⁴

This is, in essence, the same as North’s “… the humanly devised constraints that shape human interaction. ... they structure incentives in human exchange, whether political, social or economic.”¹⁵ Once again, the rules, along with the incentives and the institutional setting will be the focus of my study.

Application and relevance of Ostrom’s framework to the Nordel case

How does Ostrom’s framework apply to the Nordic electricity system and the work of Nordel? And how will I use it? I will divide this discussion in three parts, which I will relate to the headings above:

What characteristics do the Nordic electricity system, and the work of Nordel, have that grants it the status of a CPR? How do the variables and incentives in Ostrom’s framework apply to the Nordic electricity system and the work of Nordel? I will also say something about the institutional level analysis, but the main application of these concepts will have to wait until I describe the creation of Nordel.

From the description above of the general characteristics of a common-pool resource (CPR), I hope it is clear that the features of a CPR apply to the Nordic electricity system. This system was and is a resource system: the power stations, transmission lines, distribution stations, etc., from which resource units can be drawn (kWh) in a flow. It has a certain stock, in this case, the water magazines or fossil fuel reserves, but its infrastructure may also be viewed as its stock, particularly since this system is characterised of production and immediate consumption, that is withdrawing energy units require immediate production to regain the power balance – the balance between consumption and production. That is, it is immediately renewable. This means that crowding effects and overuse does not normally occur, but severe winter temperatures or years with unusually low rainfall might prompt authorities or power companies to ration the flow of electricity. It thus has limits of how many resource units can be withdrawn per unit of time. Note, also, that this CPR, since it contains hydropower, comprises both man-made artefacts and natural “structures”.

14 Ostrom (1990), p. 51.

15 North (1990), p. 3.

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Sida 14 av 50 Stating that the CPR, the electricity system, consists of the water magazines, power stations, high- tension transmission lines, transmission substations and distribution lines is, I admit, a rather unspecific definition of its internal characteristics and boundaries. However, its main characteristic, its ability to generate a flow of electricity, along with its main actors, Nordel and the power

companies, will suffice for my purpose, whose focus is the cooperation within Nordel and between the power companies. I will also argue that this cooperation to some extent defines the CPR; factors irrelevant to the cooperation do not belong to the CPR. Moreover, its internal characteristic – the number of power stations, high-tension transmission lines, transmission substations, etc. – may change, but its main purpose and function, to generate a flow of electricity, will remain. In other words, although its physical boundaries and exact internal structure are uncertain its function is very precise.

However, its internal characteristics, its stock of the above-mentioned infrastructure, was of course crucial to its ability to generate electricity, how it worked and was operated. As such, they strongly influence the rules on all levels, the operational, the collective and the constitutional, by defining the constraints and opportunities of cooperation, operation and change of its internal structure. In sum, its features and aspects mattered more than its exact structure. I will describe those features and aspects, the constraints and the opportunities, in the section “Incentives driving cooperation in electricity systems” below.

A more important line, in my opinion, is the one that needs to be drawn between appropriators and providers. As a simplification, one could say that my aim is to put Ostrom’s problem on its head: How should the participants cooperate in order to exploit the resource better, to unlock its potential? I will argue that, whether it is about preventing overuse and destruction of the common-pool resource, as in most of Ostrom’s empirical cases, or unlocking its potential, as in the case of the Nordic electricity system, the main issue is essentially the same, that of cooperation and the

incentives to do so. The ownership of national resources was of course not transferred between the different companies, but the partners relinquished some of the strict control over them in order to use the reserves of the total system. It was, to be sure, an economical agreement, but one that nevertheless codified and thereby simplified the mutual gains. To return to Ostrom’s terminology, though each power company was a provider to households and industries within its national border, each company could gain access to, appropriate a part of, the total Nordic electricity system. In other words, the individual companies, just as Ostrom’s appropriators of fishing waters or aquifers, can be defined as appropriators of the total Nordic electricity system.

As I wrote above, appropriation is related to “various methods of allocating a fixed, or time- independent, quantity of resource units” whereas provision is concerned with “various ways of

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Sida 15 av 50 assigning responsibility for building, restoring, or maintaining the resource system over time”.¹⁶ Applied to the Nordic electricity system, then, a power company could appropriate shared resources created by the cooperation, but must also provide its share to the mutual resources. Provision and appropriation are two sides of the same coin, solutions to appropriation must match those of provision.

When it comes to the internal variables internal norms and discount rate, I will make the following assumptions. I will assume that the internal norms of the individual members of Nordel are the same, or about the same: they had similar education, professional positions, and perhaps even similar social backgrounds. Since cooperation in the field of large-scale technical systems usually means long-term commitment, I will assume the discount rate is low, at least when it comes to cooperation on coordinated construction. This assumption may not necessarily hold for the power exchanges.

Note that the internal norms and discount rate are related to research questions one and two above since they influence the incentives.

What will be of higher interest are the expected benefits and the expected costs. I will look for what was perceived as the expected benefits of cooperation, but also what was regarded as costs and disadvantages. The expected benefits, as well as the costs, are closely related to my first two research questions, the incentives for engaging in the power exchanges and the joint ventures of coordinated construction. Those two questions are also connected to how these benefits should be attained, what routes and strategies should be taken. I will look particularly at how uncertainty and lack of knowledge were reduced, and the costs related to this.

I will also try to chart and assess the importance of the situational variables. This concerns the internal characteristics of the CPR, in this case mainly the characteristic of the technology, the features, aspects, constraints and opportunities I referred to above. Note that the situation variables are related to my third research question, the constraints and opportunities in which Nordel had to work. The transformation costs, changes of rules are mostly related to the time and expenses devoted to committee work. It is also, since most committees worked to gain better knowledge of specific issues, closely related to the information costs, which could, I suspect, be quite high due to the complexity of the total, Nordic electricity system. On the other hand, since much of the

cooperation essentially was business agreements for mutual gains, I will assume the problem of monitoring and enforcement was no major issues and costs.

When it comes to, finally, the institutional levels, the operational, the collective and the

constitutional, I will try to place the board of Nordel on its proper level, as well as try to analyse its

16 Ostrom (1990), p. 47.

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Sida 16 av 50 authority and which levels affected it most. The institutional levels are, as the situation variables, clearly related to my third research question since the levels stipulate authority to perform certain tasks, obligations or roles.

Sources and method

My sources are located in the Swedish State Power Board’s, Vattenfall, corporate archive.¹⁷ It comprises the minutes of meetings from the Nordel board, its sub-committees as well as annual and other reports. Since Vattenfall was only one participant of Nordel, I have excluded material

specifically related to Vattenfall and only used the common Nordel material. I have regarded the minutes of meetings as primary sources, the annual and the other reports as printed sources. In other words, they describe what Nordel thought, how they acted, wrote, what they aimed at, etc., regarding the different issues. I have, however, also used some of these reports as sources of general facts, that is not only as a source of what Nordel thought of an issue, but also whether facts or descriptions in the sources in fact are true descriptions of actual situations. When it comes to these specific facts, I have deemed this a rather safe assumption.

The two other questions relevant here are 1) what the purpose of the sources were and the context in which they were created, and 2) if the sources can provide answers to the research questions.

Regarding the first, I have tried to treat the annual reports with some care. These were meant for public consumption, perhaps mainly for politicians and policy makers within the field of electricity affairs. Not that I believe that they intended manipulate or lead the reader on the wrong path, but I will assume they intended to present Nordel as an authoritative and important organisation in the field of Nordic cooperation. Regarding the context in which the sources were created, I have assumed the delegates had to strike a balance between being a member of Nordel and the parent company/organisation. Though some board meetings may have been conducted as negotiations, Nordel was created in a cooperative spirit and will assume this influenced the meetings to the same degree as the national or corporate background of the delegates. However, I will not, in general, refer to what individual members said during board meetings. In other words, I will treat Nordel, more or less, as a collective.

When it comes to the second question, if the sources can provide answers to the research questions, I have used secondary sources and literature against which to weigh the primary sources. There is a fairly large body of academic work related to the Nordic and European electricity systems, and I have had good use of this literature in this thesis.

17 Statens Vattenfallsverk Staben /S/ 1962-1991. Handlingar ordnade efter ämne. F1b Dossièrer, huvudserie 2, volymer 82-86, 308-320, 557-560, 831.

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Incentives driving cooperation in electricity systems

This thesis is about the incentives and the constraints in a cooperation concerning a large technical system. Let us see, as I promised above what constraints and opportunities the participants had to confront or use respectively. What were the expected benefits of cooperation, the internal

characteristic of the CPR and some of the situation variables shaping the cooperation?

The purpose of Nordel was to strengthen the cooperation in regard to electricity generation and transmission. The gains from cooperation, more specifically interconnection, power exchange or power pooling, were well known at the time of Nordel’s creation.¹⁸ The main features, however, of these gains had probably been known for decades. What were the main points?

One, and in the Nordic case important, was the possibility to combine hydropower with thermal power plants. The advantage arises due to the fact that excess capacity of hydropower allow less use of thermal plants, thus lowering overall fuel costs, while the thermal plants can provide valuable backup capacity during periods of water shortages, either seasonally such as during winter when water flows are normally lower, or during years of exceptionally low rainfall. In addition, a backup thermal plant is also less costly than building a reserve dam. The benefits are in other words cost reduction, greater reliability and security of supply due to a diversification in technology, or, as Thomas P. Hughes would have said (mentioned in theoretical section above) a beneficial economic mix.¹⁹ Elinor Ostrom had perhaps called it a beneficial combination of appropriation or provision technology.²⁰

Another combination, also much on the theme of reliability and cost reduction, is between two hydropower based systems, but with different annual water flows or temporary differences in rainfall. Storage reservoirs can be used in the water system where it is less costly.

Thermal plants can also take advantage of interconnection by using the plants with the lowest marginal cost per produced energy unit for the baseload, usually the larger plants, while using the smaller plants with higher marginal cost, but that can be started quicker and easier, for periods of temporary higher loads. This is basically a result of the economies of scale for using the larger plants.

This type of interconnected system can also make use of coordinated maintenance of plants, when they have to be shut down and overhauled, again increasing reliability.

Another factor has to do with the sheer enlargement of the electrical system. The enlargement increases the number end users, appropriators, which in turn increases the diversity of users, for

18 Sewell (1964), pp. 569-571. The advantages of interconnection in electrical systems are also described in Kaijser (1995) p. 36 and in Cramer & Tschirhart (1983) pp. 25-26.

19 Kaijser (1997), p. 16.

20 Ostrom (1990), p. 203.

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Sida 18 av 50 example households versus industry, with different patterns of daily use. The gain thus comes from the fact that the peak loads in the participating sub-systems do not coincide. This is, in other words, on the familiar theme of economies of scope.²¹ Again, Thomas P. Hughes has offered the term load factor to describe the even load, which in turn enables better use of the larger plant’s economies of scale. Another consequence of this is that the larger interconnected system requires less installed total capacity to meet demand and reserve requirements than the sum of the individual systems.

This is due to the fact that the peak load in the total pooled system is lower than the sum of the peak loads in the subsystems. It also has reliability side to it: due to the larger number of production units the likelihood of total system failure is lower. This is the same principle as insurances, such as unemployment or sickness benefits, which also make use of pooling resources.

And finally, a factor that has to do with changing the system, not merely connecting its sub-systems (even if that is major feat). In a system it is possible to decide on new plants or transmission lines

”…with respect to the nature, location and timing” of this infrastructure.²² For example, investing hydropower in one region or country where water resources are abundant, build transmission lines to other regions/countries. When it comes to timing, which in fact where used rather frequently in the Nordic countries, the incentive is again the economies of scale, the larger units better efficiency per energy unit (normally thermal or nuclear plants). The problem, however, with building large plants is that the demand when the plant is completed may probably not go all the way up to its capacity, resulting in overinvestment and unnecessary high capital costs. One way to solve this for a company planning a new facility is to invite partners to share the cost, but also the benefits: to postpone their own investments and in the meantime buy power from the company building the plant. In other words, when using this planned procedure, one considered the output of the total system and avoided overinvesting and excessive capital costs. This procedure is called “staggering”.²³ It should be added that economies of scale also refers to the transmission lines, that is the high- voltage long-distance lines connecting regions (as opposed to distribution which is low-voltage, short transfers to end customers).²⁴ In other words, the marginal cost of transferring a unit of energy falls as transmission capacity grows.

Investing in new transmission and generating capacity in an interconnected system, or a power pool as it also called, can be done differently regarding to how the agreements are drawn.²⁵ A strictly controlled pool may, for example, limit the individual member’s choice of type, place and timing of its investments. A less strictly controlled pool may on the other hand just provide a forum and allow

21 Kaijser (1994), p. 80.

22 Cramer & Tschirhart (1983), p. 25.

23 In Swedish and Norwegian respectively, ”saxning” or ”saksning”.

24 Cramer & Tschirhart (1983), p. 25. Sewell (1964), p. 571.

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Sida 19 av 50 for greater flexibility. This categorisation can also be applied to how the pool is organised and

operated. The former may be called a closely-knit, the latter a loosely-knit power pool.²⁶ The member utilities integrates as long as it generates benefits and stops when marginal benefits equals the marginal costs of further integration.²⁷

The historical context and the roots of Nordel

Post-War reconstruction and European cooperation²⁸

By the 1960s electricity had become so closely intertwined in the fabric of the society that it was more or less, as stated by a scientific article 1964, viewed as prerequisite for economic growth and development in the industrialised world. An important part in this interlinking of economic affairs and technology was the European reconstruction after World War II, highly aided by the Marshall plan, or, as it was officially known, the European Recovery Program (ERP) from 1947. This also highlights the drive for European cooperation and integration after the Second World War. The recovery program was led in the USA by the Economic Cooperation Administration (ECA) and coordinated in Europe by the Organization for European Economic Cooperation (OEEC), created in 1948, (which by 1961 had become the global organisation Organisation for Economic Co-operation and Development, OECD). The reconstruction and building in the field of electricity was handled by the OEEC Electricity Committee, which in 1949 formulated its main goal of “making more electricity available” as “1) drawing up a long-term program for power plants, 2) proposing measures to intensify the use of resources, and 3) taking away barriers to the exchange of surplus electricity.”²⁹ The work of the OEEC Electricity Committee finally resulted in 1950 in a coordinating body named Union pour la Coordination de la Production et du Transport de l’Électricité (UCPTE),³⁰ (Union for the Coordination of Production and Transmission of Electricity) and included utilities³¹ from Belgium, Germany, France, Italy, Luxemburg, the Netherlands, Austria and Switzerland. The UCPTE, which Nordel later came to emulate, knowingly or unknowingly.³² The committee had the previous year announced a proposal for a European power pool, whose pooling power was mainly to be associated with new generating capacity financed via the European Recovery Program, a total of 950 MW made available for the pool. Pressure from the USA, however, pushed the committee to start integration

26 Lagendijk (2008), p. 134.

28 This is mainly built on Lagendijk (2008).

29 Lagendijk (2008), p. 143.

30 Ibid., pp. 146-150.

31 I assume this could be private, cooperative, municipal or state owned.

32 As Nordel, the tasks and responsibilities of UCPTE was transferred to ENTSO-E, the European Network of Transmission System Operators for Electricity, in July 2009.

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Sida 20 av 50 immediately and not wait until new capacity had been built. The main issues then became how to plan for new capacity, where it should be built and how its output should be distributed, and – in general - how each type of energy source should be used to enhance the total efficiency, as well as how a high-tension transmission network should be constructed.³³

UCPTE had a number of specific goals. One was to try to lessen the constraints on the short-term power exchanges between the member countries. Taking the existing status of the transmission network as a starting point, a standardised form was devised on which utilities could state their intention to export or import for a forthcoming period. I assume this was intended as a formalisation to reduce the information cost and transaction cost between the utilities. However, a specific reason was also to obtain historical records on the exchanges, to be used as a planning tool to increase future exchanges. Another effort to lessen the constraints was to try to liberalise the national legislation concerning the supply and exchange of electrical power. A step on the way was when in 1956 seasonal exchanges were allowed, and finally in 1959, when all other forms of exchanges were allowed. Exchanges grew from about 1 per cent of total production in 1954 to slightly over 4 per cent in 1965.

On the more operational and technical goals, the UCPTE initiated coordinated maintenance of thermal power plants so that the required total production could remain at normal levels despite overhauls, and achieved synchronous operation of all member networks at 50 Hz at the end of the 1950s. Synchronous operation was necessary to determine the required reserve capacity of the electrical network. This then, was a necessary requirement to estimate the benefit of combining several networks, which in turn lowered the amount of installed capacity for a certain reserve capacity.

The broad aim of these goals was to bridge the gap between production and demand, that is to retain the power balance. The UCPTE used a two-pronged strategy. On the one hand supporting the national programs of electricity generation, resulting in a limited required amount of power

exchanges; on the other develop interconnections in regions straddling national borders, and whose exchanges would support the nations meeting in those regions. Both ways would thus lead to the same goal.

On the organisational side, the UCPTE had a Restricted committee that met four times a year. This committee prepared the bi-annually Assembly meetings, which hosted representatives from all member countries. The union had a president and a vice president whose positions were subject to

33 Lagendijk (2008), p. 147.

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Sida 21 av 50 re-election each year, with a maximum of two terms in office. The president’s utility or organisation carried the costs of the Secretariat; the UCPTE had no budget on its own.

Despite the technical integration of synchronous operation and increased power exchanges, the UCPTE was a remarkably loose organisation. It was based on voluntary cooperation, it could not interfere in the member utilities’ commercial activities, which was assumed to be conducted on a bilateral basis, and it should be independent of other international organisations. The statutes specifically stipulated that the organisation consisted of people, that is the representatives’

participation was based on personal capacity, not the fact that they were employed at or associated with a public utility, private company or a public administrative charged with electricity affairs.

However, that association to the production or transmission of electricity was also a requirement.

The idea behind the personal capacity had originated in the OEEC Electrical Committee and was intended to foster a “spirit of mutual trust”. In the view of the committee, personal relations could thus foster trust, not relations between organisations. The UCPTE was thus intended as an informal forum for problem solving and cooperation in the field of electricity generation and transmission.

The UCPTE was, however, not an entirely European creation. As a part of the OEEC Electrical

Committee work a number of European electrical engineers visited the USA in 1949 on behalf of the Economic Cooperation Administration (ECA), the US organisation that led the European Recovery Program. The engineers visited and studied two American power pools or interconnection groups as they are also called, the South Atlantic & Central Areas Group (SA & CA Group) and the Pennsylvania- New Jersey Interconnection (PNJ). The PNJ was a closely-knit pool employing a central system control whereas SA & CA Group was a loosely-knit without such as control. The SA & CA Group had been established in 1928, consisted of both privately and publicly owned utilities. Geographically, it was the largest power pool in the world at the time, comprising over eighty utilities. The association was voluntary and each utility was responsible for its own system operation. The committee concluded that this model would suite the European cooperation well.

These conclusions, however, was perhaps not what Economic Cooperation Administration (ECA) had intended. It tried to induce the Europeans to finance and operate the new power plants on a supranational level, something its governments resisted due to national priorities and its engineers deemed unattainable due to politics, an “uncertain” political situation.³⁴ The view among European engineers and professionals was something that had gained foot during the interwar years in international and professional organisations such as the Conférence Internationale des Grands Réseaux de Transport d’Énergie Électriques à Très Haute Tension (CIGRE) founded in 1921 and the Union Internationale des Producteurs et Distributeurs d’Énergie Électrique (UNIPEDE) founded in

34 Lagendijk (2008), p. 156.

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Sida 22 av 50 1925 and the World Power Conference (WPC) founded in 1924. These organisations, as their names implies, were concerned with, respectively, the construction and technical issues of high voltage transmission networks, everything from the production to distribution of electricity and issues related to exploitation of energy resources in general.³⁵ But national legislation was also a topic that was discussed in those circles. The reason was that after World War I governments had actively supported electrification, and power exchanges across national border therefore became subjected to the approval of national governments. However, many engineers and professionals saw a more liberal and international system as economically and technically more rational, employing a better economic mix and better load factors.³⁶ However, the general conclusion was that the national priorities could not be counteracted; regulation was something that must be taken as a fact.³⁷ In sum then, international cooperation could take place, but had to conform to national programs and national regulation.

Production, transmission and distribution of electricity in the Nordic countries Though the Nordic countries in many respects share a common history, they differ rather substantially when it comes to the organisation and ownership of facilities for production, transmission and distribution of electrical power. The first is endowment in natural resources.

Norway has a potential 172 TWh of hydropower per year, Sweden about half that amount, Finland four times less than Sweden and Denmark none.³⁸ Denmark thus had to resort to thermal power, while Norway could develop its vast natural resources of hydropower, a favourable situation, more or less shared by Sweden and to a lesser extent by Finland. But this difference was in fact an advantage when it came to Nordic cooperation as we will soon see. But before we proceed to the cooperation, let me provide a sketch of these countries when it comes to production, transmission and distribution of electricity.

Denmark

Electricity generation had evolved locally in Denmark. On the countryside as rural cooperatives and in the cities as the responsibilities of the municipalities.³⁹ Integration into regional systems began in the 1920s, starting in eastern Denmark. The power companies established a formal organisation in 1954 called Kraftimport to coordinate the operation, planning, building and integration of the system. A corresponding organisation, ELSAM, was established in western Denmark in 1956. In 1990, the local ownership structure remains: cooperatives and municipalities own the over 100 distribution

35 Lagendijk (2008), pp. 58-59.

36 Ibid., p. 66.

37 Ibid., pp. 59-60.

38 Thue (1995), p. 17.

39 Ibid., p. 19.

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Sida 23 av 50 utilities which in turn own the 12 production companies and its production facilities. The state is and has not been involved in ownership of production and transmission of electrical power.

Norway

Local municipalities also played an important role in the electrification of Norway; electricity was mainly produced in self-sufficient, small regional systems.⁴⁰ But in the 1920s the state becomes directly involved, by creating the Norwegian Water Resources and Energy Directorate (NVE) with the responsibility of exploiting state owned water falls, completing a power station 100 kilometres east of Oslo in 1928, in the regional area Östlandet. This station became a part of a regional power pool 1932 of power companies, utilising the different water reservoirs to create one of the largest power pools at that time in the world, with 60 power stations and a total generating capacity of 900 MW, slightly less that the proposed UCPTE pool referred to above. The cooperation had previously been conducted on a bilateral basis. A requirement to join the pool was a total of 5MW production capacity.⁴¹ In Ostrom’s words, a requirement of provision to join the CPR. The Norwegian Water Resources and Energy Directorate (NVE) provided the main force to establish four power pools between 1953 and 1961 similar to the one in Östlandet.

Despite this integration, Norway, similar to Denmark, has to a large degree retained the local character and regional self-sufficiency of electricity production. About two thirds in 1990 was produced and used for ordinary consumption (excluding electricity-intensive industry) within the same region.⁴² NVE produced slightly below a third of the total generating capacity and owned about 80 per cent of the high voltage transmission network.⁴³

Finland

The regional hydropower systems in Finland were built by both private companies and the state owned company Imatran Voima in the 1920s. There were no interconnections between the systems, however, so the private and public utility competed for customers. In the 1930s all hydropower resources in the populous south had been exploited, which meant that the northern resources had to be exploited and transferred to the south. This, however, required large investments. This, in turn, allowed the state gain influence after 1950s; the private power industry escaped nationalisation with a small margin in 1952. Construction of thermal power plants began in 1960s, and later nuclear power stations, which in 1995 provided a third of the total capacity.⁴⁴ In 1990, Imatran Voima

40 Thue (1995), pp. 19-20. Kaijser (1995), p. 48.

41 Kaijser (1995), pp. 41-42.

42 Ibid., p. 48.

43 Thue (1995), p. 14.

44 Kaijser (1995), pp. 42-45.

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Sida 24 av 50 produced 20-25 per cent of the total capacity, which made it the single largest producer in Finland. It owned approximately 70 per cent of the high voltage transmission network.⁴⁵

Sweden

Of all the Nordic countries, Sweden is the country where the state has had the most direct

involvement in the production and transmission of electrical power. The Swedish State Power Board, Vattenfall, created in 1909, had no foreign predecessors. It built Trollhätte hydropower station in 1910, the Porjus hydropower station in 1914, Älvkarleby hydropower station the year after that, and quickly established itself as the major electrical power producer. One reason for the state drive was the electrification of the railroads; another, the ownership of waterfalls, which, however, was not uncommon in Europe.⁴⁶ In the 1920s a system that exemplifies the economic mix described above was created. It consisted of the power stations in Trollhättan and Älvkarleby with a common

reservoir in the lake Vänern and a thermal power station in Västerås.⁴⁷ However, this was a planned system, not a power pool, since Vattenfall owned and operated all facilities. A power pool was created later, in 1964, at the initiative of the Waterpower Association. The purpose of this organisation was to promote the interests of private and municipal power companies as a

counterweight to Vattenfall.⁴⁸ Like in the Norwegian power pool, there was a minimum requirement on production capacity, and in addition, on reserve capacity. Again in Ostrom’s words, a requirement of provision to join the CPR. Similar to Finland, Sweden had to exploit hydro resources in the north and transfer power to its more populous south. The state, via Vattenfall, gained an even larger influence than in Finland when in 1946 Vattenfall was accorded the sole responsibility to plan, build and operate the complete high-voltage transmission network.⁴⁹ In 1990, Vattenfall produced about 55 per cent of the total capacity. If the nine next largest producers were added, their total capacity reached 90 per cent. Nuclear power produced half of the total power production in 1995.

Nordic cooperation prior to Nordel

I will consider two examples of Nordic cooperation in the field of electricity generation prior to the creation of Nordel.

As early as 1915, a typical hydro-thermal cooperation, as described above, was established between the Danish company NESA and the Swedish company Sydkraft. This was thus a bilateral agreement.

These companies built a submarine cable between Helsingör in Denmark and Helsingborg in Sweden.

The main incentive for cooperation was the excess hydro power during the summer in Sweden. The

45 Thue (1995), p. 14.

46 Kaijser (1994), pp. 165-166.

47 Kaijser (1995), pp. 38-39.

48 Svenska Kraftverksföreningen. http://www.ne.se/svenska-kraftverksföreningen, Nationalencyklopedin, accessed 2011-05-20.

49 Kaijser (1995), p. 44.

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Sida 25 av 50 cooperation proved useful for Denmark during the coal shortages of the World War One, though electrical power could later flow in the other direction during periods of water shortage in Sweden.

On the whole, this was thus a mutually beneficial cooperation.⁵⁰

A more difficult cooperation to establish was that between Norway and Denmark, and Norway and Sweden. The reason was the divided view in Norway on how and who should exploit the country’s large potential hydropower resources. On the one hand stood rural interests, energy-intensive industry and bourgeois politicians who thought that these resources should be used to the benefit of Norway, and the on the other Social Democrats that pushed for industrial cooperation.⁵¹ Proposals in the 1920s, 30s and after the Second World War to export Norwegian hydropower to Denmark, either through the Danish peninsula Jutland (western Denmark) or via Sweden to eastern Denmark, all failed. The last of these proposals, however, was in the end rejected in 1950 by a newly elected centre-right Danish government after Norwegian and Danish Social Democrat ministers – after a fierce debate in the Norwegian parliament where the price of electricity had been notched up a few levels – had managed to reach an initial agreement.

These large projects, then, failed to materialise. A local project between Norway and Sweden was, however, in the end successful. But only after some political wrangling. The initiative was taken in 1951 by the local power company in Trondheim, Norway, who put forward a proposal to the Stockholm power company. The Norwegian plan was to build a large hydropower plant in Nea close to the Swedish border. In order to utilise the full capacity of the plant from the start, that is to use the economies of scale, the Stockholm company was offered a contract with an option, valid for 30 years, to buy up to half of the capacity and in return help financing the construction.⁵² This was thus a typical example of staggering as described above, on a bilateral level.

The municipalities in Trondheim and Stockholm put a stamp of approval on the project and it was then submitted up one level to the national governments for formal approval. The Swedish

government had no objections; the Norwegian, however, raised strong reservations and simply said that a local municipality could not engage in international agreements. The project was not ditched, however, but it must be handled on the appropriate level, that is by the Norwegian Water Resources and Energy Directorate (NVE). After re-negotiation and a close vote in the Norwegian parliament, the project could finally go ahead. Contrary to the plan, but beneficial to future Norwegian-Swedish cooperation, was the fact that the Stockholm company sold power to the company in Trondheim,

50 Kaijser (1997), p. 6.

51 Ibid., pp. 7-9, 19.

52 Ibid., p. 10.

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Sida 26 av 50 and not vice versa, due to water shortages in Norway. Besides the staggering, this project thus also reduced the risk and secured the power balance in Norway.⁵³

Nordel as a model of UCPTE

Nordel traced its roots from several sources. In the one hand, the international strands from UCPTE, the international engineer organisations, even the power pools in the US, since the UCPTE became based on these; on the other, the bilateral cooperation between the Nordic power companies, but not least the political attempts to cooperation on a higher, Nordic level. The Nordic countries has been said to have struck a Nordic balance: rather small countries on the European periphery,

charting risky waters between the two superpowers and the European cooperation on the continent, preferring Nordic integration, the Atlantic alliance and global organisations to pan-European

cooperation, without, however, closing the door to the European cooperation.⁵⁴ The balance comprised Denmark’s and Norway’s NATO membership, Sweden’s non-alignment and Finland’s pact with the Soviet Union "Agreement of Friendship, Cooperation, and Mutual Assistance" signed in April 1948.⁵⁵ An embodiment of the Nordic integration was the Nordic Council, an advisory body consisting of Nordic parliamentarians, aiming at cooperation between the Nordic parliaments and

governments.⁵⁶ Another is the NORDEK proposal discussed 1968-70,⁵⁷ a cooperation plan on economic and industrial development, including a customs union, which, however, never was realised due to Finland’s rejection of the treaty. The official explanation was that the other Nordic countries were making preparations to start negotiations with the European Economic Community (EEC), which would make, the argument went, NORDEK more or less irrelevant.⁵⁸

But the Nordic Council nevertheless ignited the creation of Nordel. In 1962, the council proposed that a civil servant committee originally devoted to a Finnish-Swedish cooperation aimed at exploiting the Kalix and Torne rivers, a project that never became realised, be given a new charter and turned into a permanent body for cooperation within the field of electricity production. The Nordic power companies, however, were reluctant and rejected this proposal. They seemed to have preferred an organisation according to its own lines. The Swedish organisation for power pooling, Centrala Driftledningen (CDL), a voluntary body from the Second World War when a closer cooperation between the Swedish power producers became necessary, invited the Nordic power companies in December for discussion on an organisation along the lines of UCPTE. It should also be

53 Kaijser (1997), pp. 10-11.

54 Lagendijk (2008), pp. 112-113. Solem (1977), pp. 21-46 (chapters 2 and 3, "Scandinavian Administrative Cooperation" and "Origin and Development of the Nordic Council"), 66-86 (chapter 6 "Integration and Economics").

55 Lagendijk (2008), pp. 112-113.

56 Nordiska rådet. http://www.ne.se/lang/nordiska-rådet, Nationalencyklopedin, accessed 2011-05-21.

57 Nordek. http://www.ne.se/nordek, Nationalencyklopedin, accessed 2011-05-21.

58 Solem (1977), p. 84.

The Nordic electricity system as a common-pool resource

The Nordic electricity system as a common-pool resource

Abstract

Table of contents

The Nordic electricity system as a common-pool resource

Introduction

Purpose and research questions

Theoretical framework

Sources and method

Incentives driving cooperation in electricity systems

The historical context and the roots of Nordel