Implementing EU-defined energy communities in the Nordics: The role of path dependencies in shaping divergent outcomes

Abstract

The Nordic countries have well-established community energy traditions. However, the extent to which these traditions align with the European Union’s definition of energy communities varies from country to country.

The EU’s Clean Energy Package introduced renewable and citizen energy communities (RECs/CECs) to strengthen citizen participation in electricity markets. Nordic countries, however, have long-standing traditions of community-based energy provision, including district heating cooperatives, small hydropower schemes, and wind cooperatives. This article examines how nationally embedded energy models in Denmark, Finland, Norway, and Sweden align with or diverge from the legal and governance criteria defined in the Renewable Energy Directive RED II and the Internal Electricity Market Directive IEMD. Using a comparative institutional framework, the study analyses regulatory design, ownership structures, and system configurations shaping implementation. The findings show that regulatory conditions, rather than cooperative traditions alone, determine alignment. Finland demonstrates high compatibility, Denmark and Sweden partial alignment, and Norway limited alignment, being outside the EU framework. The study highlights how institutional path dependencies condition the practical realisation of EU energy community provisions.