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Europe is in the middle of energy crisis. Some countries more than the others. In general, there is shortage on natural gas and electrical power, and as a result the prices are getting high and unpredictable. When writing this article the worst appears to be over, but the problems may return, of we cannot meet the growing electricity demand.

Practical consequences of energy shortage are mean. Industrial processes are shut down due to excessive energy costs. Electricity distribution authorities plan for temporary blackouts to maintain grid stability. And finally, residents in homes with electric heating are watching television under blankets, because they are too annoyed to pay the ridiculously high electricity bills. People are desperately looking at weather forecasts and hoping for heavy winds and mild temperatures, which as they have learned, mean cheaper electricity bills. Conventional winter wonderland seems now like a nightmare.

A revolution in energy conversion has already begun in the Western World, as the fossil fuels are replaced with electrical applications. This calls for new types of energy, new technology, and many new investments. Energy storages are needed, more consumer flexibility is needed, energy sources other than just solar and wind are needed. But most importantly, more power is needed. And a lot. This article tries to estimate how much.


How did we end up in this crisis?

Excessive electricity prices in Finland were first observed in the late 2021, which is discussed in the previous blog post [1]. Since then the utility companies have started to gradually increase the electricity prices in long-term contracts. People are blaming Russia and its warmongering dictator Vladimir Putin, but that is just a part of the explanation. The crisis at hand has been developing for a longer time, and we need to understand the big picture.

During the last 15 years, the European energy conversion has seen major changes. One trigger for these was the Financial crisis in 2008-09, which resulted in closing many factories. In Finland the annual electricity consumption has still not exceeded the level in 2007. Before the Financial crisis, the energy conversion relied heavily on traditional power plant types, such as nuclear and coal. Electricity consumption increased steadily in line with economic growth. Wind was coming into play, but its portion in the total energy conversion was still small. At the time, wind was not profitable without generous governmental support. Solar energy was largely in experimental phase. The electricity production was reliable and predictable, although relatively polluting.


Figure 1. Electricity production in Finland, Sweden, and Germany in 2007 and 2021 [3, [4], [5].

In 2010 Germany launched its new energy policy, ”Energiewende”, a Turn of Energy. The plan was to phase out nuclear and fossil fuels, and to replace them with renewable energy sources, namely solar and wind. Another objective was to increase the efficiency of industrial processes so that they would not need as much electricity. But unfortunately, the plan went south. Germany prioritised the nuclear phase out too much, and began with shutting down half of the nuclear plants at the end of 2011. This resulted in imminent increase in the use of coal and natural gas, and triggered a steady rise in electricity prices. IEA and NEA have estimated that the cost of generating electricity is at lowest when using old nuclear power plants [2]. Germany has significantly increased the use of wind and solar, but at the same time, they have increased the use of natural gas, and become dependent on the Russian gas supply. The gas prices started to sky-rocket when Russia began its war preparations in the late 2021 by restricting the gas supply to Europe. This finally collapsed the house of cards Germany had put together on its energy policy. Furthermore, Germany has reduced its total electricity generation by 7% since 2010.

Also Sweden has reduced its nuclear and coal capacity and replaced them mostly with wind. Finland has reduced its use of coal and natural gas, and replaced them with biofuels, wind, and by exporting more electricity from Sweden and Russia. For decades, Finland has not been able to produce enough electricity for its own use. In 2021, Finland imported roughly 20% of its total electricity consumption.


Solar and wind power

High portion of solar and wind in the electricity production is one of the prime reasons for unpredictable price development, although not the only reason. Still, the share of solar and wind is getting bigger in the future, so we need to understand what this means.

Wind is a powerful energy source. Modern wind turbines are enormous with more than 5 MW output power. They operate at higher altitudes, where the wind conditions are more stable, even when the wind speed at the ground level seems very low. Further, the wind turbines are scattered around large areas, both onshore and offshore, so local weather effects only apply to small amount of wind turbines. But the weather risk does not disappear. Sometimes, an anticyclone lands over the Gulf of Bothnia, and very large areas in Finland and Sweden are having almost no wind. Most of the Finnish and great deal of the Swedish wind turbines are located in this area, and would be running on low power. If this happens, perhaps once or twice per year, the electricity authorities become worried about the grid stability and plan for temporary blackouts, if needed. Normally, the blackout can be prevented by load reduction procedures carried out by the biggest consumers. But even then, the price of electricity becomes astronomical.

Because of weather dependency, the wind turbine yield is less than the yield of conventional power plants. A wind power plant needs approximately 3 times as much capacity to produce one MWh of electricity than a nuclear power plant. In the future, this ratio will probably become less, because large wind turbines have steadier yield. But this leads to over-dimensioning the wind power capacity. In optimal weather conditions the wind turbines produce too much power, and the price of electricity falls negative. The consumers have incentive to use as much power as they can. This creates business opportunities for processes with excessive electricity consumption, such as steel mills and Hydrogen economy. But the bottom line is that this kind of power delivery will increase the total electricity consumption.

The solar energy case is similar. The yield depends on how sunny the weather is. Solar power contributes to the total production in Finland between March and October. But interestingly, provided by longer days in the summer, the total yield in Finland is similar to the yield in northern Germany. However the problem of solar is that its yield is zero during the winter, when the consumption is at highest. In turn, the advantage is that solar can balance the weather-dependent wind power shortages during summer time.

For steady and predictable operation, wind and solar need some forms of energy storage. They need something to take energy from, when the wind speeds are low and the sun does not shine, and something to store the energy into when the plant yields are high. The energy storage requirement for wind is only for days or weeks until the wind conditions stabilise. But the solar energy needs seasonal storage, lasting for months. So far, we have not paid enough attention to storing energy.


Electricity consumption is increasing

During the first years after the Financial crisis, the power demand reduced. Partly, this was because of factory closures, but it was also influenced by the increased efficiency in industrial processes. After the crisis, the interest rates lowered, and investment money was cheap. New investments were focused on high efficiency equipment, such as frequency converters, permanent-magnet motors, and more advances process control systems. Further, traditional factories started to renew their motor drives, and they specified higher efficiency requirements for new induction motors.

But during 2014-15 the power demand turned into a rising path in Sweden and Finland. Since then the consumption has increased, excluding the Corona crisis year 2020, when major parts of infrastructure were closed down for months. In Germany, however, the electricity consumption is still decreasing. There might be several reasons for this, but probably one of them is that the ”Energiewende” made electricity too expensive, so many industries started to run their processes on natural gas. Yet, also in Germany the power demand probably sets on a rising path in the near future.


Figure 2. Electricity consumption in Finland, Sweden, and Germany [6], [7], [8], [4].

The future is electric

Heating buildings and homes

In Finland, buildings need heat. Traditional way for heating has been to burn different fuels to heat up water, which circulates in pipes and radiators of a house, or in a district heating system of an entire city or small sections of it. This kind of heat generation consumes very little electricity. At the moment, there are some options to replace the fossil fuels in the burning process: fuels based on biomass, wood, or municipal waste. But these apply only to district heating network, and even there they have limitations. For example, the city of Helsinki has decided to replace the burning processes completely, when the use of coal is discontinued. Further, the use of biomass cannot be significantly increased, because Finland is already struggling with the biodiversity targets. In other words, chopping of forests cannot be much increased from the current level.

Non-burning alternatives to heat generation include geothermal heat, heat pumps, electric boilers, and some other sources of heat (e.g. waste heat from industry or cloud computing factories). Both geothermal and heat pumps will require considerably more electricity than traditional heat generation units.

A typical 4-people household living in a Finnish single-family house (living space 120 m2) needs 9 600 kWh for heating and further 3 600 kWh for heating water, so altogether 13 200 kWh of heating energy per year [9]. If geothermal energy is used, roughly one third of total heating energy is electrical energy used in pumps. If the above-mentioned household replaces oil with geothermal energy, the annual electricity consumption is 4 400 kWh. For the water-to-air heat pump, the share of electrical energy of total energy is more, maybe 40 – 50 %. Replacing oil with this in the same example is 5 280 kWh. Both geothermal and heat pump solutions can be used for air-conditioning during the hot summer months. But cooling down the house requires additional electrical power.

There are 200 000 oil-burning single-family houses in Finland. If half of them replaces oil with geothermal and the other half with water-to-air heat pumps, the houses need approximately 4 840 kWh of more electricity on average. Air-conditioning option adds roughly 1 000 kWh. The total power demand is then 1 168 GWh per year. For comparison, the largest hydro plant in Finland (Imatra) produces roughly 1 000 GWh per year.

Effect of district heating can be analysed based on total figures. At the moment, district heating in Finland produces 39 100 GWh of heat and electrical power per year [10]. The portion of coal, oil, and peat is 9 773 GWh. Let us assume that one third of this is replaced with geothermal (1 kWh of electricity produces 3 kWh of heat), one third with heat pumps (1 kWh of electricity produces 2.5 kWh of heat), and one third with electric boilers (1 kWh of electricity produces 1 kWh of heat). The required electrical energy is 5 647 GWh. If also the natural gas is replaced like this, the electricity demand is 8 400 GWh. This is roughly equivalent to all wind energy production in Finland in 2021, or annual production of Loviisa nuclear power plant.



Rail transportation has been mostly electric in Finland for decades. Only the most distant sections of tracks need diesel locomotives. Now electrification is spreading to other traffic sectors as well.

Electric cars are the first step. Comparing traditional cars with electric cars is not easy, because the electric cars are generally placed in a higher price category. However, we can try. An Audi A4 with a 3-litre diesel engine consumes roughly 7.5 litres of diesel fuel per 100 km of range. Considering the diesel fuel energy content 11.528 MWh/t, the consumption is equivalent to 73 kWh of energy. An electric car of similar size and performance values (such as Tesla Model 3, BMW i4, or Polestar 2) consumes roughly 25 kWh per 100 km of range. So, the demand of electrical energy is roughly one third of the demand of diesel fuel energy.

For trucks and lorries, the electric drive train is less favourable. A truck consumes roughly 25 litres of diesel fuel per 100 km of range. This is equivalent to 244 kWh. An electric truck requires roughly 120 kWh for the same range [11]. This is roughly half of the diesel energy. Similar ratio is obtained when the heavy lorries are compared. Comparison is however not precise, since the electric trucks and lorries do not have much user experience yet.

In 2021 the Finnish traffic used 47 457 GWh (170 845 TJ) of energy [12]. The passenger cars covered roughly half (23 785 GWh) of this. Replacing them with electric cars demands 7 928 GWh of electricity per year. Vans, buses, trucks, and lorries need 20 151 GWh of diesel energy. Replacing them with electric vehicles yields 10 076 GWh of electrical energy. These put together is roughly 18 000 GWh per year. This is more than all hydro power production in Finland in 2021.

The above figure does not contain the electrified aviation, rest of locomotives, water transport vehicles, and losses in electric vehicle charging systems. However, it is estimated that all heavy road vehicles are electrified, which may not be the case. Some of them might be operating on bio-diesel fuels.


Added distribution losses

Transporting electrical energy along transmission lines causes some losses. These are mostly resistive losses (resistance times current squared), but also some corona losses take place. According to Fingrid, the losses need roughly 1 200 – 1 400 GWh of energy per year [13].

At the moment, the electricity production is rather localised. Even though there is a strong national electric grid, the power plants are still located rather close to the consumers. For example, the city of Helsinki has two large coal power plants inside the city district plan. With higher amounts of wind and solar energy, the power plants are moved further away from the consumers. For example, the city of Helsinki will be electrified by the wind parks in Ostrobothnia region about 500 – 800 km away. Also electric transportation easily leads to longer transport distances.

This will be a big challenge to the national grid power lines, which need to handle much higher capacities. But also, longer transport ranges means higher losses. The power line distance affects directly to its resistance, and further to the losses. If we estimate that the total power demand increases by 70% and that the distance to the consumers is doubled, the total amount of losses is roughly 4 400 GWh per year. So the increase to the current level is approximately 3 000 GWh.


End of trade with Russia

Attacking to Ukraine in 2022 Russia angered the Western World. Europe denounced Russia, imposed sanctions, and started to cancel the trade missions with them. As a result electricity and natural gas supplies to Finland were stopped. Due to illegal invasion, war crimes, continuous lying, and idiotic political rhetoric Russian government has absolutely no credibility in the West. Instead, Finland is preparing itself for Russia’s plans to attack Finland as well, if they reach their goals in Ukraine. It is estimated that it will take decades to restore the previous good trade relations between Finland and Russia.

Previously, Finland imported roughly 5 000 – 7 000 GWh of electricity from Russia. Also, Finland imported 16.7 – 18.7 TWh of natural gas [14]. It may well be that once closed, these two connections will never reopen. Some of the gas can be imported through the Baltic Connector pipeline, some with LNG tankers, and some gas can be replaced by adding Hydrogen into the flow. But probably some of the gas and all electricity imports will be replaced with added domestic electricity production.


Hydrogen economy

For some time, Hydrogen economy has been suggested as a potential replacement for fossil fuels, but it was considered to bloom later in the future. However, the war in Ukraine has speeded up the plans. Large-scale investments in Hydrogen economy in Finland have already been kicked off. Hydrogen can be used as fuel in engines, fuel cells, and gas turbines. But also, it is converted to Ammonia, which is used in fertilizer production. Previously, plenty of Ammonia were imported from Russia, and now there is motivation increase its production in the Western Europe.

There are different methods to produce Hydrogen. In Finland, the Green Hydrogen is considered. It is produced from water in electrolysis process. This requires large amounts of electrical power. Producing one kilogram of Hydrogen requires 50 – 55 kWh of electricity. When Hydrogen is produced like this, the electricity demand for Hydrogen engines in transportation is in the same range as the electricity demand for battery-powered applications.

It is estimated that the annual electricity demand for Hydrogen production in chemical industry is 10 000 GWh by 2050 [15]. However, many signals indicate that this amount is going to be needed much sooner than 2050. The same 10 000 GWh estimate is used here as well, but the time span is only until 2040.


All put together

The above estimates (excluding the distribution losses) do not take the economic growth into account. In this context, economic growth means added consumption by just adding consumption, not making the replacements as discussed above. In other words, factories expand, computers and all kind of smart devices get more powerful, more appliances are used for more comfortable living both at home and at work, and so on. A 1% annual growth in consumption is estimated for this.

The total electricity consumption in Finland was 87 093 GWh in 2021. The above calculations indicate that it will increase to 144 759 GWh by the year 2040. The increase is 57 666 GWh, corresponding to +66%. This is a lot, considering that the total consumption in 2021 was just slightly less than in 2007.

The electricity generation was 69 325 GWh in 2021. Assuming that Finland would be self-sufficient in 2040 producing all of its consumption, a total of 75 434 GWh of more generation is needed. This is +109%, so Finland needs to double its generation. This means lots of new power plants.

Figure 3. Estimated increase in Finland’s electricity consumption by 2040.


The power demand seems high, but Sitra has estimated that it can be even higher [16]. Their calculation is 168 TWh electricity demand in 2050, which is almost twice as much as we have now. Considering different time spans, this estimate is aligned with the above calculations.


Investments will be needed

The above estimate for total electricity consumption probably exceeds the current national grid capacity. Increased production far away from big cities puts more load on the grid. It will be a challenge to Fingrid to maintain grid stability, and requires investments in the national grid.

We need lots of new power plants. Modern wind turbines are very powerful, and according to IEA, the cheapest power plant types when new installations are considered [2]. There are plans to build hordes of them. Large solar plant parks are also being sketched. However, harvesting large natural areas for solar power production raises new questions on sustainable land use. The share of wind and solar will probably increase significantly. But we need also different types of power plants. Small modular nuclear reactors and Hydrogen-burning gas turbines should have a role in the new energy conversion scheme.

Large share of wind and solar requires energy storage applications. It seems, however, that the power utility companies are not going to arrange these. Instead, the power flexibility will be consumer’s responsibility. Investments in this direction are already being made: Hydrogen economy, electric boilers, heat pump systems, to name a few. In the future, large consumers have to be prepared for added load sequencing. More activity will be going on during the night-time, when the consumption is usually lower. On the other hand, high fluctuation in electricity price creates new kinds of incentives and perhaps new businesses for energy storage applications and load sequencing.

Investments in electricity production will prevent the nasty consequences of electricity shortage, but most of all they are vital for the future development of many industries in Finland. Nevertheless, it seems relatively clear that electrical engineers will have plenty of work to do in the future.



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  2. IEA, NEA: “Projected Costs for Generating Electricity”, 2020 Edition, International Energy Agency IEA, Nuclear Energy Agency NEA.
  3. Statistics Finland, “12vp — Sähkön hankinta energialähteittäin, 1990-2021”, Available at:
  4. IEA: Energy statistics, Available at:
  5. Fraunhofer ISE, “Energy Charts”, Fraunhofer-Institut für Solare Energiesysteme ISE, Available at:
  6. Statistics Finland: “12vm — Sähkön kulutus sektoreittain, 1960-2021”,  Available at:
  7. Statistics Sweden: “Electricity supply and use 2001–2021 (GWh)”, Available at:
  8. Swedish Energy Agency: “Energy in Sweden – Facts and Figures 2019”, Available at:—facts-and-figures-2019-available-now/
  9. Adato Energia: ”Kotitalouksien sähkönkäyttö 2011”, Adato Energia Oy, 2013, [In Finnish].
  10. Energiateollisuus ry, ”Kaukolämpötilasto”, Available at:
  11. Volvo Trucks, Vehicle technical data, Available at:
  12. Trafi, “Liikenteen kasvihuonekaasupäästöt ja energiankulutus”, Data package,  Available at:
  13. Fingrid, “Häviösähkö”, Available at:
  14. Suomen Kaasuyhdistys ry, “Kaasujärjestelmä ilman Venäjän kaasua”, Available at:
  15. L. Sivill et al.: “Vetytalous – Mahdollisuudet ja rajoitteet”, (English: Hydrogen economy – Opportunities and limitations), Valtioneuvoston selvitys- ja tutkimustoiminnan julkaisusarja 2022:21.
  16. Sitra: “Sähköistämisen rooli Suomen ilmastotavoitteiden saavuttamisessa”, (English: “Role of electrification in Finlanf in meeting the climate targets”), Sitra Muistio, Syyskuu 2021.