Did the energy crisis turn borrowers green? Zonal power prices and green bond choice on Oslo Børs

Abstract

The energy crisis of 2021 to 2023 caused a sharp increase in Nordic electricity prices, with substantial differences across bidding zones. We use this variation to examine whether issuers exposed to higher local electricity prices were more likely to choose green bonds over conventional bonds. We construct a dataset of bonds listed on Oslo Børs between 2019 and 2025 by combining ESMA FIRDS reference data, including matured bonds, with Euronext green bond classifications and issuer registry information. We then match issuers to their electricity bidding zones and examine the relationship between local power prices and green bond choice using issuer and quarter fixed effects. The share of green bonds among new listings increased from 15% in 2019 to 48% in 2024, but we find no statistically significant evidence that higher local electricity prices increased the likelihood of green bond issuance. This finding is consistent across price exposure windows of three to twelve months and for both utilities and other issuers. However, the estimates rely on 21 identifying issuers, and the minimum detectable effect at 80% statistical power is 3.1 percentage points for a 10 EUR/MWh increase in electricity prices, meaning that smaller effects cannot be ruled out. The estimated effect is larger but imprecise among issuers with an earlier green bond, which implies an existing framework. We also find no clear association between carbon prices and green bond choice, although this analysis covers only eight utilities. Overall, the findings suggest that the growth of green bond issuance in Norway was more closely associated with broader market trends than with differences in local electricity prices.