Sector Outline Finland: Energy Storage

As the share of decentralised and intermittent renewable energy increases, storage is taking on a central role in enabling its smooth integration into the energy system and in shaving consumption and production peaks. In upcoming years, the bulk of the needed storage capacity is expected to derive from dedicated batteries and Power-to-X applications. Significant intra-day and seasonal variations are typical, which emphasises the significance of storages for different durations.

A pioneering and growing battery economy is one corner stone of Finland’s industrial strategy. Strong metallurgical knowhow, ample natural resources and investments into recycling technology support the build-up of domestic production and refinery capacity for battery chemicals and materials. This leaves Finland with a unique capability to map the entire battery value chain – sustainably.

Beyond batteries, the background as raw material producer provides brownfield sites for pumped hydro, compressed air and solid mass storages in decommissioned mines. Given the prominent role of district heating, also investments into thermal storages can be utilised in scale. A recent case in point is the massive cavern storage in the capital region boasting an 11.6 GWh capacity, but storages for heat and cold have decades of history in serving the networks.

Large energy storages are developed both as hybrid arrangements connected to other energy projects, and as stand-alone projects. These investments can tap into the commercial rationale of increasing system stability, bridging the gap between variable production and often fixed consumption, and shifting the load away from high-price hours, through several business models or their combinations:

supporting the commercial viability and security of supply of own production or offtake

providing energy storage as a service to energy market participants

participation in the balancing markets to provide services to system operators

trading energy in the electricity markets in accordance with electricity price variations

Double taxation has been removed for most industrial-scale electro-chemical storages if prudently organised, either by virtue of these automatically constituting a part of the grid or a power plant, or through the possibility to apply for tax-exempt energy storage status. For smaller units and pumping stations, electricity tax may still be triggered multiple times, but this is intended to be addressed through future legislation.