14 RENEWABLE ENERGY IN FINLAND: FROM A PRODUCTION-CENTRIC …
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heaters, heat pumps and people returning from work and starting to use
electric appliances (Heljo et al. 2016). Yet, new peak generation plants
are not currently being built owing to profitability concerns, raising
concerns of whether the capacity can in the future meet the peak demand
(Energiateollisuus 2019). The influx of variable generation into the Nord
Pool market (to which the Finnish system is strongly interconnected
alongside Denmark, Sweden, Norway and further Northern European
countries) is problematic for the economics of base-load types of generation units like nuclear power plants. They have large sunk costs that
can be recovered only if the average power prices are sufficiently high.
Nuclear power is poised to supply a third of Finland’s power supply by
2030 and still a fifth in 2050 (Holttinen 2017).
Considering the disruptive consequences of electrification, decentralisation and variability of renewable energy generation, the cost-effective
accommodation of large shares of variable generation in the Finnish
energy system should consider at least the following:
1. Ensuring a level playing field between different primary energy
sources. Electricity should be treated similarly to fuels, and the
societal costs of emissions of CO 2 and other pollutants should be
included in the prices. Distribution and transmission tariffs should
be based on the actual costs, which are mainly installation and
maintenance costs, not usage costs.
2. Cost-efficient communication, control and market participation of
flexible energy devices would facilitate the emergence of buildinglevel flexibility. In order to gain widespread adoption, the solutions
should be trouble-free for the building dwellers whether they are
consumers or prosumers. The emergence of an increasingly interconnected digital system requires solutions that are trustworthy in
terms of privacy as well as power grid stability and control.
3. Sufficient charging infrastructures for EVs, including distribution
grids, the development of electrical systems and roadside charging,
are required. These systems should consider flexible charging
and possibly discharging whenever cost-efficient. Flexibility would
improve the value of variable power generation. Also, the possibility
of increasing the use of electricity for heating should be factored
into the reinforcements and control systems.
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heaters, heat pumps and people returning from work and starting to use
electric appliances (Heljo et al. 2016). Yet, new peak generation plants
are not currently being built owing to profitability concerns, raising
concerns of whether the capacity can in the future meet the peak demand
(Energiateollisuus 2019). The influx of variable generation into the Nord
Pool market (to which the Finnish system is strongly interconnected
alongside Denmark, Sweden, Norway and further Northern European
countries) is problematic for the economics of base-load types of generation units like nuclear power plants. They have large sunk costs that
can be recovered only if the average power prices are sufficiently high.
Nuclear power is poised to supply a third of Finland’s power supply by
2030 and still a fifth in 2050 (Holttinen 2017).
Considering the disruptive consequences of electrification, decentralisation and variability of renewable energy generation, the cost-effective
accommodation of large shares of variable generation in the Finnish
energy system should consider at least the following:
1. Ensuring a level playing field between different primary energy
sources. Electricity should be treated similarly to fuels, and the
societal costs of emissions of CO 2 and other pollutants should be
included in the prices. Distribution and transmission tariffs should
be based on the actual costs, which are mainly installation and
maintenance costs, not usage costs.
2. Cost-efficient communication, control and market participation of
flexible energy devices would facilitate the emergence of buildinglevel flexibility. In order to gain widespread adoption, the solutions
should be trouble-free for the building dwellers whether they are
consumers or prosumers. The emergence of an increasingly interconnected digital system requires solutions that are trustworthy in
terms of privacy as well as power grid stability and control.
3. Sufficient charging infrastructures for EVs, including distribution
grids, the development of electrical systems and roadside charging,
are required. These systems should consider flexible charging
and possibly discharging whenever cost-efficient. Flexibility would
improve the value of variable power generation. Also, the possibility
of increasing the use of electricity for heating should be factored
into the reinforcements and control systems.