Robust State of Finland’s Energy Markets

The Minister of Economic Affairs, Mr. Lintilä, presented the state of Finland’s energy position in a far-reaching presentation today.

Like every country around the world, Finland is coming out of an 18 month Covid crisis that has resulted in energy demand outstripping supply. He noted that Saudi Arabia and Russia have cut back on supplies and as a result the price of oil and gas have risen sharply. There is not much that we can do about that…

He also made two comment about this situation – the first comment was that many of the ministers attending the EU’s Energy Council last week discussed how their companies are moving away from fossil fuels to green investments. The second comment was that they were all hoping for a warmer winter! In other words progress to a fossil-free future is very slow because investments do not happen overnight, and secondly there could be demonstrations on the streets if the weather turns cold. 

This is unlikely to happen here, according to the minister, because Finland has a good social safety net and one of the lowest costs of power in Europe but many populations in EU countries are exposed to having their power cut off, if they cannot afford to pay the high cost of gas as fourfold price increases have taken effect. In many places they may be cut off because storage facilities are close to being empty! The Minister expects that prices will stabilise in the spring and that expectation has taken the sting out of the most dire forecasts.

He was pleased that the EU has not watered down the agreement to introduce a carbon tax, but is concerned about EU’s new proposals relating to energy efficiency (EED), renewable energy (RED) and the impact of the EU’s Taxonomy. Finland has a relatively cold climate, many large energy intensive companies, has a huge forest area, and has invested heavily in nuclear power. All of these require more understanding from EU member states.

He also made the point that he has reviewed his opinion about hydrogen as a source of power – initially he believed that it will grow in the third decade of this century but now he expects it to become more important during this decade. Innovations and investments are surging already in this country…

… and finally he mentioned that there are strong possibilities for joint investment between Sweden and Finland in the norther area of the two countries because there are important mining, refining and forestry clusters there that can take advantage of wind power.

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