Electricity consumption in Finland is growing at an unprecedented pace. Fingrid is responding to this need with its EUR 5.2 billion investment programme. The programme will deliver nearly 4,000 kilometres of new transmission grid. How many new connections — and therefore how much economic activity — this enables depends on how electricity production and consumption are located geographically. The difference is significant, in the order of 20 gigawatts.
Today, more than 70 percent of electricity production in Finland is located in western and northern Finland. More than 50 percent of electricity consumption, by contrast, is located in southern Finland. The north and west have abundant wind and hydropower, strong interconnections with Sweden and a large number of well-advanced renewable energy projects. Most of Finland’s population, meanwhile, lives in the south. With current trends, this geographic separation between production and consumption will become even more pronounced and electricity transmission distances will increase. This would increase transmission losses, the need for main grid investments and their environmental impacts, while also slowing customers’ access to the grid.
The grid in southern Finland is already locally congested, and connections are being offered further into the future than before while more network capacity is currently under construction. In contrast, in the west and north, where most of Finland’s electricity is produced, fast and large connections are still possible.
Location does not depend on the electricity grid alone.
Location, however, does not depend on the electricity grid alone. For instance, some industries need ports, and cities need electricity. Some sectors have more flexibility in where they can locate. This is the case for some (albeit not all) data centres for example.
“When choosing the location of a data centre, a wide range of factors must be considered. Important considerations include the availability and price of electricity, as well as how quickly the data centre can be connected to the electricity grid. The utilisation of waste heat is particularly desirable near urban areas, where the heat can be fed into existing district heating networks. From the perspective of the electricity grid, however, large cities in southern Finland are rarely optimal locations,” says Invest in Finland Senior Advisor Jouni Salonen.
Invest in Finland, which operates as part of Business Finland, is responsible for promoting investments in Finland and helps foreign companies find suitable locations for their operations in Finland.
Google’s first data centre in Finland is located in Hamina.
Google’s first data centre in Finland is located in Hamina. After more than a decade of successful operations, Google began exploring expansion opportunities in cooperation with Fingrid and Business Finland.
Fast grid connectivity, nearby access to clean electricity and scalable growth opportunities were important to Google. Google proactively prioritised proximity to carbon free power and regional balance that support grid efficiency by selecting sites in Muhos, Kajaani and Vaala rather than directing its expansion to the congested, consumption-heavy south. By locating in the north, in Finland’s electricity production-heavy region, the need for grid reinforcement remains moderate, as existing infrastructure can largely be used. This approach reduces the need for new grid investments and helps lower system-wide costs in Finland and the Nordic region.
Data centres, for example, have good conditions for growth in electricity production-heavy areas.
Fingrid’s President and CEO, Asta Sihvonen-Punkka, welcomes Google’s new data centres to Muhos, Kajaani and Vaala.
“Data centres and other location-independent industries have good conditions for growth in electricity production-heavy areas, where there is significant grid capacity available for electricity consumption. Our aim is to keep the costs of a growing electricity system competitive while also reducing environmental impacts. These locations at strong grid nodes support the entire electricity system and ensure cost-effective development of the grid,” says Sihvonen-Punkka.
Fingrid can offer more grid connection opportunities when customers locate efficiently. We will continue to develop the grid and invest in it, but to realise the full growth potential, it must also be possible to steer some projects to other locations. In this way, the same level of grid development expenditure can generate more growth, without slowing the success of projects that are more dependent on location.
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