This year, Europe’s energy markets have had to face a new reality as a consequence of Russia’s ruthless actions in Ukraine. Russia has turned off the supply of natural gas to several EU countries and cut the rate of supply to others. Natural gas and electricity prices have risen sharply throughout the EU. The price of futures for next winter has already smashed all previous records, and the winter seems likely to put our energy sufficiency to the test.
Industrial operators and citizens face the prospect of unprecedentedly high energy bills, which will pose a challenge to the EU’s energy market structures and the common desire to support Ukraine in its valiant fight.
Europe urgently needs creative – even radical – new means of coping with the coming winter.
Europe urgently needs creative – even radical – new means of coping with the coming winter, including alternative energy sources like Liquified Natural Gas (LNG), appropriate support measures, and, above all, significant energy-saving solutions.
The coming winter will also be challenging in Finland in terms of gas as well as electricity. A mild, rainy and windy winter in the north would alleviate many people’s worries.
The commissioning of the third unit at Olkiluoto is a decisive factor in the adequacy of electricity. LNG terminal solutions in ports will also be needed before the heating season in order to ensure the availability of natural gas. Even if Finland has enough electricity, difficulties in neighbouring countries on the common European market could throw a spanner in the works for Finland. Germany’s enormous energy challenges and price level will be reflected in Southern Sweden and onwards in Finland.
Finland – one of the major clean electricity countries
The coming winter and the next few years will be hard without Russian energy, but Finland’s longer-term outlook is encouraging.
We have an unprecedented opportunity to increase our production of renewable energy. New wind power plants are being built at a rapid pace, and our wind power capacity will surpass the 10,000-megawatt threshold as soon as 2025. This potential is exemplified by the combined total capacity of the renewable energy connection enquiries submitted to Fingrid: more than 180,000 megawatts.
The past year has seen an upturn in interest in solar power construction, and the number of new connection enquiries for new solar power plants is showing almost exponential growth.
The rise in prices across the board will also increase the costs of investing in renewable energy, but it will remain competitive in relation to the sharply increasing costs and high risks of fossil fuels. Building more onshore wind power in Finland is one of the cheapest and fastest ways of increasing energy production in Europe.
In terms of building more renewable energy capacity, Finland enjoys the advantages of being a large, sparsely populated country with a strong main grid, a stable investment environment, and the possibility of building very large and efficient wind turbines. It is also possible to implement demanding infrastructure solutions efficiently in Finland without getting tangled up in red tape.
As Finland becomes a carbon-neutral society, demand for electricity will increase by 40–50 per cent over the next decade. If we succeed in being an attractive investment environment for new industries based on clean electricity, such as data centres and hydrogen production, electricity consumption could well double in the 2030s.
Increases in the volume of renewable energy production will put Finland in an excellent position to become a larger exporter of electricity.
Increases in the volume of renewable energy production will put Finland in an excellent position to cover its own energy needs and become a larger exporter of electricity as EU countries seek substitutes for fossil energy.
It is important for the government to contribute to this positive feedback loop, for example, by streamlining the permit process for renewable energy and electricity networks. Allowing the construction of wind power in every part of the country would serve the interest of municipal economies and every electricity consumer in Finland.
Mikko Heikkilä is the manager of strategic grid planning at Fingrid Oyj.