In February 2022, when Russia invaded Ukraine, the United States-led Western block immediately swung into action, launching a series of economic offensive against the Kremlin. One of them was to put a price cap on Russian energy exports, in order to hurt the nation’s trade profits and in the long run, make the Ukraine campaign economically unsustainable for Vladimir Putin.
However, in a clever response, Russia chose countries like China and India as its energy markets and diverted much of Europe’s supply to these two Asian powerhouses, resulting in an energy shortage for the continent.
Amid all these, Finland has grabbed the global attention, as clean electricity produced in this part of the world has become abundant in supply, apart from trading at a negative price tag.
Has Finland Finally Solved The Power Crisis?
While the rest of Europe is still struggling to cope with the ongoing energy crisis, the Nordic country’s spot energy prices dropped below zero, during May 2023.
While reacting to Finland’s average electricity price slipping into negative territory, Jukka Ruusunen, CEO of grid operator Fingrid, told YLE News, “The average price for the day is now slightly, but nevertheless, on the negative side. Yes, it is historic. Production is high, consumption is low and now we are in a situation where it is not easy to adjust production.”
“Now there is enough electricity, and it is almost emission-free,” Ruusunen told YLE, adding that Finns could “feel good about using electricity.”
The Nordic country had to undergo energy poverty in 2022 and its citizens were asked to watch their electricity consumption, after the nation banned energy imports from Russia. The country is now facing an oversupply of electricity.
In December 2022, Finland got its first floating liquefied natural gas terminal at the southern port of Inkoo. The terminal will supply gas to the Nordic country and help the latter to move away from the Russian energy supply.
The massive 291-meter-long and 43-meter-wide offshore support vessel Exemplar has a capacity of 68,000 tons of LNG and is scheduled to be operational in 2023.
The vessel will first reconvert the LNG to gas, following which the product will be fed into the Finnish network for distribution. The arrival of the Exemplar will also enable gas deliveries to the Baltic states — Estonia, Latvia, and Lithuania— and possibly also to Poland through the undersea pipeline between Finland and Estonia that runs near Inkoo.
Russian energy giant Gazprom halted gas exports to neighbouring Finland in May 2022, citing Helsinki’s refusal to pay in rubles. This move resulted in the end of Finland’s nearly 50 years of importing energy from Russia.
While natural gas accounts for just some 5% of total energy consumption in Finland, until May 2022, nearly all of that gas used to come from the Kremlin, and was mainly used by Finnish industrial and other companies with only an estimated 4,000 households relying on gas heating. Post-Ukraine war, this energy tie with Russia has met with a silent death.
The Country Has Gone Nuclear Now
In 2023, Finland launched its nuclear power plant, Olkiluoto 3, which has been dubbed Western Europe’s first new reactor in over 15 years. The launch happened immediately after Germany shut down its last three plants.
The reactor, which has a 1,600-megawatt capacity, was connected to the Finnish national power grid in March 2022. The mechanism started functioning regularly on April 16, 2023.
Olkiluoto 3 is presently producing around 14% of Finland’s electricity, and is expected to remain operational for “at least the next 60 years” according to the plant operator Teollisuuden Voima (TVO).
Finland as of now has five nuclear reactors in two power plants located on the shores of the Baltic Sea. Combined, they cover over 40% of the nation’s electricity demand.
The Nordic country has also recently signed a Memorandum of Understanding (MoU) with the United States, on nuclear energy and nuclear waste management.
The move has helped Finland to bring down electricity prices by over 75% in the Nordic country. Average spot electricity prices in the country fell to €60.55 per megawatt hour in April 2023 from €245.98 per megawatt hour in December 2022, a decrease of 75.38%, according to Nord Pool, a physical electricity exchange.
Wind To Power Finland’s Renewable Energy Drive
Finland’s wind power capacity has increased by 75% in 2022, according to the Finnish Wind Energy Association (FWPA).
Finland has ambitious climate goals of achieving net zero by 2035, well ahead of the European Union’s 2050 goal.
In 2022, the Nordic nation put 427 new wind turbines into operation, adding 2,430 megawatts of capacity. One megawatt could power an estimated 1,000 homes, meaning the new turbines could service over 2.4 million households.
The country now has a total of 1,393 wind turbines producing a combined power of 5,677 MW, potentially enough to power an estimated 5.5 million homes in the country.
Wind power capacity is expected to increase by around 1,000 MW annually over the next few years. By 2025, wind is expected to cover at least 28% of Finland’s electricity consumption, up from almost 10% in 2021.
Finland Story Catching World’s Imagination
“Finland has set one of the most ambitious climate targets in the world, a legal obligation to reach carbon neutrality by 2035. It has made notable progress towards this target, deploying the first new nuclear reactor in Europe in over 15 years and achieving strong growth in wind generation. Thanks to the country’s efforts to advance its energy transition, Finland has the second lowest share of fossil fuels in the energy supply among IEA member countries. Finland has also succeeded in rapidly ending nearly all energy imports from Russia while ensuring secure access to energy by increasing imports from other countries, expanding domestic renewable energy production and improving energy efficiency,” commented the International Energy Association in its May 2023 report.
India, the world’s fifth-largest economy, is seeking a partnership with the Nordic country, on the commercial use of hydrogen clusters, in order to generate clean and sustainable energy.
In May 2023, Finnish wave energy technology developer, AW-Energy, signed a memorandum of understanding (MoU) with Namibian energy generation company, Kaoko Green Energy Solutions, to produce green hydrogen from renewable energy sources including wave energy.
While the Ukraine war and the resultant energy crisis have slowed down Europe’s economy in general, for Finland, it has been a different story altogether.
From opening Western Europe’s first nuclear reactor in over 15 years to heavily investing in renewable sources like wind and hydrogen, the Nordic country is showing the way to the world, in terms of having an indigenous power generation ecosystem run by green energy.