Reliable electricity networks are the basis of competitiveness, security and the green transition

From the reader. Recent events have reminded us how vulnerable the world’s energy system still is and how dependent Europe still is on oil imports. Tensions in the Strait of Hormuz, Russia’s war of aggression in Ukraine and the price fluctuations of fossil fuels show that energy is part of competitiveness, security of supply and security policy.

Emission-free electricity production and reliable electricity networks reduce our dependence on fossil fuels and create conditions for competitive electricity prices.

At the same time, electrification is one of the most effective ways to curb climate change. Emissions decrease when transport, industry and heating switch to green electricity. At the same time, society becomes less dependent on the import of fossil energy.

Fierce competition in the world

The world is already on this path in terms of electricity, although the transition of the entire energy system is still progressing too slowly. According to the International Energy Agency (IEA), the world’s demand for electricity will grow by an average of 3.6 percent per year until 2030. At the same time, the share of renewable energy and nuclear power is predicted to rise to about half of the world’s electricity production by 2030, and renewable electricity will overtake coal as the world’s largest source of electricity production.

In addition to the green transition, the rapid growth of data centers affects the demand for electricity. However, if properly controlled, data centers can also function as part of a flexible energy system. Data centers have plenty of waste heat that can be recovered and fed into district heating.

The competition for clean electricity is already underway. China is investing in renewable energy at a record pace. India follows suit. Poland aims to replace coal power with renewable energy and nuclear power by 2040 by investing in renewable energy, nuclear power and electricity networks. Spain has managed to reduce its dependence on gas quickly and now benefits from cheap electricity. Cheap electricity is also of interest to those who are not interested in climate change. At the same time, the high share of fossil fuels is still reflected in higher electricity prices in, for example, Italy.

Finland has an excellent starting position in this competition. We have built one of the world’s cleanest electricity systems: already 95 percent of our electricity production is fossil-free. At the same time, approximately two billion euros will be invested in the main grid in the next few years, so that the growing electricity production and new industrial investments can be connected to the grid. The withdrawal from Russian energy showed that Finland can strengthen its energy self-sufficiency quickly, when the direction is clear.

In order for the green energy transition to be fully successful, investments are also needed in distribution networks. Without them, new industrial investments, electrified transport and distributed renewable energy production will not progress quickly enough. At worst, the electricity network may become a braking bottleneck. Without sufficient investments in transmission and distribution networks, energy storage and flexibility solutions, clean electricity cannot be delivered to where it is needed. Power grids are a critical part of society’s secure infrastructure.

The European emissions trading system has been one of the world’s most effective climate measures. It has steered investments away from fossil fuels and towards cleaner solutions. Its predictability and future must be maintained in the future as well. At the same time, it must be ensured that the construction of electricity networks progresses quickly enough to meet the growing demand.

A strong electricity network enables the electrification of society, supports climate goals and reduces our dependence on fossil fuels. By investing in electricity networks, we support operational reliability, shorten power outages, enable renewable energy to be connected to the grid, improve safety and increase society’s resilience against extreme weather events.

Strong electricity networks are one of the most important pillars of a sustainable and safe future.

Iida Miettinen

vice chairman of the board, Ensto