SPRU - Science Policy Research Unit

Finnish energy sector requires renovation

A report from the Smart Energy Transition project highlights an urgent need for a thorough renovation of the Finnish energy sector to meet global climate challenges and improve competitiveness - and the benefits that speedy action can bring to Finland.

The report, "New perspectives to Finnish energy transition" (in Finnish), was launched on Tuesday 28 November 2017 in Helsinki and given to the Minister of Foreign Trade and Development, Kai Mykkänen. It was based on an application and adaptation of the 'transition arena' methodology to a Finnish context. Thus, the outcome and recommendations of the report are a product of co-creation between actors with different areas of expertise pertaining to energy systems.

The report identifies over 100 measures which are urgently needed across both public and private sectors to proceed with the energy transition. These are divided into the ten most important recommendations. The leading recommendation is that Finland needs to act in a determined way to quickly phase out fossil fuels as planned.

One of the core messages is that, if Finland aims to be among world leaders in the area of smart energy solutions, it needs to create and advanced domestic market. This could easily be addressed in the process of the Finnish innovation funding agency Tekes merging with Finpro to form a new organisation, Business Finland, from the beginning of next year and it should also be included in the next government programme.

Potential is seen in better utilising demand side response in electricity and heat networks, increasing the use of energy storage and micro-scale renewable energy production and retrofitting the existing building stock to be more energy efficient.

Harri Jaskari MP, who chairs the energy rennovation group of the Finnish Parliament, said:

"We know from prior experience that success abroad requires a functioning domestic market. Smart energy systems need to be taken into use in Finland on a broad scale, and consumers need to be brought into the market."

The report also urges opening up the district heating networks of large cities for competition. As a quick first step, district heating companies who burn coal should be required to attain a certain proportion of their sales from renewable or waste heat from third parties. Long-term, the networks and production should be separated from each other, as has already been done with the electricity and gas markets.

The report provides recommendations on many debates which have been ongoing in energy policy:

  • Wood resources - these should be developed primarily into products of high added value, with energy production taking a minor role
  • Heating - to be convered by extensive electrification and renewable energy sources
  • Transport - the goal should be for Finland to have 750,000 cars using alternative forms of energy in 2030 (this is 2.5 times higher than Finalnd's official target)
  • Energy consumption in buildings - could be significantly reduced from current levels through energy services and by utilising building automation

SPRU's Dr Paula Kivimaa states:

"This was a unique opportunity to get together people with expertise from different fields and facilitate a genuine dialogue. The aim of the transition arena was not only to produce recommendations, but get people to be in dialogue and learn from each other to come up with new solutions to address the pressing issue of climate change."

The report received wide press coverage: Prof Sampsa Hyysalo (leader of TA) was interviewed on YLE news morning TV (the equivalent of BBC in Finland); Helsingin Sanomat (the largest newspaper in Finland) referred to the topic in its Editorial; news stories on the report were published in Iltalehti, Tekniikka ja Talous, Vastuullisuusuutiset, Vasablaset, KD-lehti, Uusiteknologia.fi, Yrittajat.fi.

The Smart Energy Transition (SET) consortium’s aim was to analyse the ongoing global energy transition and how it impacts on Finnish society, in particular the potential benefits for cleantech, digitalization and bioeconomy.

See also: Capturing value in smart energy (project page)