Outsmarting congestion: How efficient solar design helps navigate Nordic grid limits

Even though they already have some of the cleanest grids in Europe, Nordic countries continue to expand their solar capacity.

But the problem here (much like in other high-penetration markets) is that they’ve run out of grid space. Strict interconnection rules and limited hosting capacity mean that utility-scale projects in Sweden take about 1.5 years to connect, and upgrades require permissions that can take up to a decade. Such delays echo across the region, and they’ve become increasingly problematic as these countries start to soak up Europe’s data center boom.

How are Nordic operators and solar developers adjusting to tighter grid conditions? In this blog, we look at the policy support and design decisions that are keeping projects on track and resilient against the knock-on effects of congestion.

Grid compliance

The Nordic grid is becoming less predictable as it transitions from spinning turbines to inverter-based solar. Why? Inverters don’t provide the same inertia or fault response as spinning machines. Grid operators are now dealing with a very different set of technical challenges that are harder to predict and tougher to manage.

Statnett, Fingrid, Energinet, and Svenska kraftnät (the region’s four TSOs) are working together through the Converter Dominated Nordic project to get ahead of the risks. Each country still sets ride-through, reactive power, and frequency response parameters independently, but the expectation is the same across the board: Inverter-based plants must behave like stabilizing assets. They must help steady the grid when it wobbles, rather than just feeding power.

The four operators are now judging projects as much on stability and response as on production. To get the green light, developers need to prove that their projects can manage real-time voltage fluctuations and respond to frequency deviations when called on.

Curtailment mitigation

Even when a plant clears these hurdles and connects, it still needs to stay profitable in a system that can swing from undersupply to oversupply in a matter of hours.

In early 2023, there was an unprecedented surge in negative-price hours in the mFRR down-regulation market. Instead of getting paid to produce, solar and wind plants were asked to hold back. And in some cases, staying online meant losing hundreds or even thousands of euros per megawatt-hour during oversupply.

Developers without storage suddenly saw curtailment go from an occasional inconvenience to a recurring financial risk. Staying inside grid limits now meant accepting losses or switching off when the system was oversupplied.

Denmark found a way to make it work. Wind producers there actively bid into special down-regulation at levels that still leave projects viable. Strong participation has made the country’s mFRR framework appear more sustainable than those of most of its neighbors.

But other countries had to introduce new ways to compensate for flexibility. Finland decided to formalize flexibility as a paid service by launching an mFRR capacity market for down-regulation. The market runs hourly before the day-ahead auction and pays generators for being available to cut back, even if they never get activated.

That availability payment softens the financial hit from negative prices for weather-dependent producers by turning curtailment from a pure cost into a manageable risk. Finland’s experiment shows how such payments might level the playing field for variable generation across the Nordics. 

Data-driven forecasting

New algorithms and simulation tools are giving operators and developers a clearer picture of when and where constraints are likely to occur.

Wanting to establish a clearer picture of how transmission bottlenecks were shaping power prices, Nordic TSOs built a high-resolution nodal price simulation that mapped the grid with a granularity rarely attempted in Europe. The results confirmed what many suspected. Cheap power was piling up in the north, costs were rising in the south, and Sweden’s SE3 zone around Stockholm and Gothenburg was congested. Similar pinch points were found in Norway.

More recently, these operators also began developing a forecasting algorithm that identifies riskier periods before they occur, enabling them to fine-tune how much reserve capacity to procure and when. The tool is designed to cut unnecessary procurement during stable weather while ramping up reserves when volatility increases.

Behind the scenes, TSOs are pooling vast amounts of real-time grid data into a shared Common Grid Model that maps energy flows across the entire region. The model helps forecast where congestion will occur and provides market operators with a clearer basis for day-ahead dispatch.

Together, these forecasting and simulation signals can help developers plan projects with a clearer sense of where grid headroom is tightest and where adding flexibility could bring the most value.

Storage as a shock absorber 

Finland is experimenting with unconventional storage at the municipal scale, in the town of Kankaanpää, a sand-based thermal battery stores excess renewable electricity as heat. This system (the largest of its kind) converts surplus solar or wind energy into thermal energy, then uses it to supply hot water during colder months. It’s low-tech, but it works. It also reduces the pressure on the electricity grid during peak heating demand.

Meanwhile, BESS is entering utility-scale solar pipelines across Scandinavia. Nordic Solar is adding a 10 MWh battery in Denmark and an 18 MWh unit in Sweden, both designed to smooth out production and support local voltage regulation.

One of the most advanced hybrid setups is now underway in Finland, where a 70 MW/ 140 MWh BESS is being installed alongside wind, solar, and hydro assets. This multi-source configuration (tied directly to a high-voltage substation) gives the grid access to energy when and where it’s needed, even if one source unexpectedly drops. 

Test before you build

Are you working on a solar-plus-storage project in the Nordics or another curtailment-prone region? RatedPower lets you model BESS alongside PV systems or as standalone installations, with automated siting, sizing, and layout design for both AC- and DC-coupled setups.

Simulate how batteries perform under different production and load profiles, and refine charge/discharge behavior using inputs like degradation, pricing, and PV output. The platform can also test how storage might respond to price signals across constrained grids for projects considering arbitrage.

Schedule a demo to see it in action.