“Normal winter temperatures and the economic recovery from COVID-19 that was more rapid than expected pushed electricity consumption back to the previous level in 2021. The increase in production was met with renewable energy, and therefore emissions did not rise despite higher electricity consumption. The use of peat in electricity production fell to two percent.

“The share of carbon-neutral production forms was record high, and there was a clear decrease in the use of peat. Without the price hike at the end of the year the emissions would have even fallen,” says Jukka Leskelä, Managing Director of Finnish Energy. “As a result of the high price of gas and the increased electricity demand, coal use was slightly higher than in the previous years. However, this phenomenon will be short-lived because the use of coal will decrease even further already this year and, in practice, it will be phased out in full in the next few years,” Leskelä points out.

The production of emission-free energy reached a record high, 87 per cent, during 2021. Wind power capacity grew by a quarter, but actual production remained almost unchanged due to low winds. The hydro power year was better than normal, and the share of bioenergy, which was used to replace peat, increased by three percentage points in electricity production.

Electricity imports returned to the previous level during 2021, corresponding to twenty per cent of consumption. Imports from Russia showed the biggest rise in relative terms, returning to the level before the exceptional year of 2020. In 2020, Estonia bought more electricity from Finland than ever before because the price of Nordic electricity was at a record low level. Exports to Estonia grew to a new record also last year despite the increase in electricity prices because emissions trading has considerably pushed up the costs of Estonia’s own production. The volume was slightly lower than imports from Russia.

“Finland’s net imports were high in the 2010s, but they are expected to decrease already this year when Olkiluoto 3 starts its production. In a few years’ time, we will be exporting and importing more or less the same amount of electricity because of strong investment in wind power,” Leskelä points out. ”At the same time, the price difference with the Stockholm region, which has grown over the past decade, will also level off, i.e. Finnish buyers of wholesale electricity will not have to pay on average more than the Swedes,” Leskelä continues.

Electricity consumption increased to some degree. In part, the rise is due to the wintry weather last winter and, at the end of the year, the colder than normal weather in December.

Industry’s electricity consumption also grew due to the economic upturn caused by the COVID recovery measures. In the longer term, industry’s share of Finland’s electricity consumption has been falling, but the direction will change in the future. Industry’s electricity consumption is expected to grow when the low-carbon roadmaps based on increased use of electricity are realised.

Wholesale price of electricity rose to record levels. The wholesale price is determined in the Nordic power exchange, and country-specific price differences are due to transmission capacity bottlenecks between countries. The average wholesale price of electricity has varied between 30 and 50 euros per megawatt-hour – now the exceptional conditions in the electricity market at the end of the year pushed the average price for 2021 to 72 euros.

“Wholesale prices have now been at an unprecedented high over a long period. It is not a question of sufficiency of power, but it is a pan-European phenomenon,” Leskelä says. ”The sufficiency of electric power was not at risk at any time during the year.

Now, the prices are still rather high, and it is possible that there will still be new spikes in prices during extremely cold spells.”

E-mobility progressed in leaps and bounds during 2021. The share of alternative fuels (electricity, chargeable hybrid and gas) grew to almost one-third of first registrations of passenger cars, and the share of petrol fell to two-thirds of the 2019 level. In December 2021, petrol-driven cars accounted for less than half of first registrations for the first time.
Facts The figures published by Finnish Energy are preliminary data based on the monthly statistics and estimates. The final data for 2021 will be published by Finnish Energy in autumn 2022.

Our experts on this topic

Jukka Leskelä

Managing Director

Finnish Energy

Jukka Leskelä

Managing Director

Finnish Energy

+358 50 593 7233

jukka.leskela@energia.fi

• X