Finland’s Strategic Energy Plan Threatens to Render Russian Power Imports Obsolete

The past week saw significant speculation in the Russian media about a recently published long-term power development strategy issued by Fingrid (Finland’s primary state-run power operator), which laid out a plan for the country to achieve carbon neutrality by 2035 through investment in the country’s renewable energy sector.  Several Russian publications have interpreted Fingrid’s proposed strategy as meaning the country would end its electricity purchases from Russia’s Inter RAO as early as 2030. In a failed attempt to allay these concerns, the planning director of the company, Jussi Jyrinsalo, noted on February 2 that “We [Fingrid] do not express the position whether we need electricity from Russia or no.”  As recently as 2018, Russia accounted for approximately 7% of Finland’s total electricity consumption and 28% of its net electricity imports.  Still, Finland has maintained alternatives to Russia, relying on domestic production and imports from other EU power markets through the Nordic electricity market (NordPool). While Finland’s level of dependence on Russian power imports is less significant in this context, InterRAO, on the other hand, has seen Finland develop into a rather crucial market.  As of 2019, the country accounted for 36% of the Russian company’s electricity exports (approximately 22 billion rubles per year in revenue), meaning Finland’s diminishing electricity imports could negatively impact Inter RAO’s revenue stream. In the recent past, Finnish energy policy has been the target of foreign espionage efforts according to the country’s intelligence agency, Supo.  In 2015, Supo disclosed, without naming a country, that “foreign intelligence” sought to “aggressively” influence the country’s energy policy decisions, as well as gather information on attitudes of Finnish politicians and citizens toward EU policy and NATO cooperation. In the strategy document, Fingrid also acknowledges that, alongside achieving carbon neutrality by 2035, investing in domestic renewable power has the potential to create an energy surplus in the domestic market.  Although an exact timeline for this outcome remains vague, an energy surplus could foreseeably make Finland a net exporter of electricity and allow it to supply other regional power sector markets seeking to mitigate Russian power dependencies.  The Baltic states continue their ongoing efforts to decouple from the Russian power grid and synchronize with the EU power sector.  The three countries and Finland are all part of NordPool. Russian publications such as Kommersant have attempted to downplay the impact of the new strategy on Inter RAO, noting that the document acknowledges the continued role of Russian-Finnish transmission lines, such as the Vyborg-Yllikkala line, and integrates Rosatom’s ongoing construction of a nuclear power plant (NPP) in Finland’s Hanhikivi peninsula as part of the operator’s push for domestic renewable energy.  Even the NPP, however, is called into question by the strategic document, which paints a scenario where the plant is either delayed or cancelled.