The Finnish energy sector in brief
Finland is one of the leading nations in renewable energy. The share of renewables in total energy consumption and electricity supply, in both exceeding 40% and growing, is one of the highest in the EU. While hydro and bioenergy are still quantitatively largest renewable energy sources, the share of wind power is rapidly growing and can in peak hours amount to over a third of domestic electricity generation. Together with the soon phased-out peat, these three major renewables form the country’s indigenous energy resources. Characteristic of the national energy portfolio is the strong reliance on nuclear power, solid wood fuels and black liquor.
The Finnish industry sector is the largest individual contributor to total energy consumption. Together, the forest industry, manufacture of basic metals and chemical industry make up as much as 90% of industry sector’s energy consumption. While electricity forms a notable share of this and is mostly CO2-free, due to the processes used approximately one-fourth of energy needed in these industries is still directly derived from fossil fuels – mainly oil, coal and natural gas.
Finland is part of the Europe's leading electricity market Nord Pool. The Nordic and Baltic TSOs own a third of Nord Pool and are closely involved in its operations. The electricity market is divided in multiple bidding areas with individual prices. Unlike other Nordic countries, Finland has only one price zone.
The energy infrastructure is shaped by relatively long transmission distances and dependency on electricity exports from other Nordic countries. The transmission grid covers nearly 15,000 kilometres of high-voltage lines and is operated nation-wide by the TSO Fingrid Oyj. To accommodate increasing electrification and geographically segregated production and consumption hot-spots, significant new investments of around EUR 2,1 billion are planned over the next ten years to expand and upgrade the network. The transmission grid is complemented by regional high-voltage networks and local distribution networks managed by 9 regional and 77 distribution network companies. The national grid is linked with high-voltage connections to Estonia, Sweden and Norway.
In addition to the electricity transmission grid, the dedicated TSO Gasgrid Finland Oy operates a geographically more limited gas transmission network in southern Finland. Connected to the European gas markets through the Balticconnector pipeline, a LNG terminal in Hamina and a FSRU infrastructure in Inkoo, the national gas network serves the Finnish natural gas market, which is open to competition since 2020 and has a yearly demand volume of circa 25 TWh (status 2021). The grid is also used for smaller quantities of domestically produced biogas. Sales volumes are largely attributable to large industrial end-users and energy companies producing district heating or electricity. Households procure natural gas in small quantities and a vast majority of them only for cooking.