Hydropower share declines in Finland’s energy production, future growth uncertain

The share of hydropower in Finland’s energy production is declining, with limited growth potential anticipated. It remains essential as a balancing power source. In a recent energy report from Lappeenranta-Lahti University of Technology, hydropower was not included among the significant energy sources in Finland. Esa Vakkilainen, a professor of energy technology at the university, stated, “We do not believe its share will grow significantly, or that its role will change markedly, nor that it will provide new opportunities for changes in energy systems.”

Currently, hydropower generates approximately 18% of Finland’s electricity. The only avenues for growth in hydropower lie in new technological developments and pump storage plants. While Finland lacks pump storage facilities, the government is committed to their promotion. Kemijoki Ltd. is planning a 550-megawatt plant in Kemijärvi.

Two notable projects are backed by PVO-Vesivoima and Suomen Voima, each with plans for 500 MW and 200 MW respectively, focusing on regions favorable for elevation and water volume. However, these proposals have raised environmental concerns, with a lengthy preparation and permitting process anticipated.

Nordic energy companies like Fortum and PVO-Vesivoima also emphasize that hydropower alone cannot ensure future grid stability. Discussions surrounding new fishery obligations for power plants and impending amendments to water legislation indicate a complex regulatory landscape. In 2023, only one license for a one-megawatt small power plant was granted in Ähtäri’s Inhankoski, which has also faced legal challenges. The 1987 River Protection Act continues to impose significant restrictions on hydropower development in Finland.