Finnish Energy (ET) welcomes the Commission’s initiative to update energy security legislation to better meet today’s requirements. We believe a reassessment of energy security is timely and necessary. Updating energy security legislation is essential due to at least the following factors: The geopolitical situation has changed significantly. Imports of Russian energy to Europe are coming to an end. Fossil fuels are being replaced by renewable and clean energy sources, especially through electrification across various sectors of society. The focus is shifting from the availability of fossil fuels to the availability of strategic raw materials and components. In addition to material preparedness, production capacity is becoming increasingly important. And finally, the ongoing energy transition presents significant challenges, such as 1) Temporal and spatial coordination of energy production and consumption, 2) Significant expansion of energy networks and 3) Combating climate change and halting biodiversity loss.
We believe that European energy security legislation should be reviewed comprehensively, and it is largely aligned with the thinking presented in President Niinistö’s report and the subsequent EU Preparedness Union Strategy. In our view, the reassessment should go beyond merely updating the Gas Security of Supply Regulation and the Electricity Risk Preparedness Regulation. Of course, we agree that both key energy commodities, which rely on cross-border networks, should be considered together from a crisis management perspective. These commodities are well-suited to regulation at the EU-wide level.
In today’s world, the security aspect is embedded in absolutely everything. In all cases, we believe that an open and competitive market provides a cost-effective foundation for both security of supply and overall security. Markets should function as long as possible, and only in truly severe exceptional circumstances should the public sector intervene. It is extremely important to emphasize the continuum of supply and emergency measures, from normal-time supply disruptions to severe threats to security of supply.
From an energy security perspective, it is also essential that the energy production structure is versatile and decentralized. We know, for example, from Ukraine’s experience that wind and solar power plants are less vulnerable to wartime destruction than more centralized traditional energy facilities. With the energy transition, the role of energy networks and energy storage has become more prominent, and they must be at the core of energy security measures. In addition to storing energy commodities, ensuring the supply chains of critical spare parts and materials is increasingly important. Energy self-sufficiency through investment in domestic energy resources and technologies will become more important than lean supply chains from a security perspective. Also, combating climate change and the sustainable use of natural resources present their own challenges to today’s energy security efforts.
As stated above, the Preparedness Union Strategy and its action plan reflect our thinking and goals well, both in terms of starting points and content. The strategy can help unify the understanding of Europe’s threat environment. We believe a comprehensive security approach is necessary—one that extends security and preparedness measures across all sectors of society, including the energy sector. We assess that if all the strategy’s measures were implemented, Europe would be significantly better prepared for disruptions and crises.
Due to the current security situation, implementation should proceed swiftly. Lessons learned from the situation in Ukraine should also be considered in future work. In this context, the EU and its Member States can and should be guided in the right direction by the Preparedness Union Strategy and other related strategies, such as the stockpiling strategy. The CER and NIS 2 Directives are also highly relevant components of security of supply.
According to our experience, entity-specific risk assessments, effective planning, training, and implementation of security of supply measures require strong cooperation between the public and private sectors. Both are essential in managing these issues. We also want to highlight the importance of company-specific, decentralized, or regional preparedness. Security is a cross-cutting theme that everyone must participate in.
A good example is the near-complete termination of energy imports from Russia to Finland in 2022. In 2021, 34% of Finland’s energy came from Russia. As is well known, Russia invaded Ukraine in February 2022. By May 2022—just three months later—energy imports from Russia to Finland had practically ended (only very small amounts of LNG and nuclear fuel were imported thereafter). Society, people, and businesses continued to operate without disruption to energy supply. Why did we succeed?
Above all, because we had long prepared for crises at all levels of society and business. Fuel procurement had always been diversified, energy sources could be substituted, we had strategic stocks, and companies, municipalities, and authorities had preparedness and contingency plans. Crisis exercises were regularly conducted. Cooperation between companies and the public sector was smooth within the National Emergency Supply Organisation (NESO).
NESO is a network that works together to support Finland’s operational capacity and the required security of supply. It consists of the governmental National Emergency Supply Agency (NESA) and its Board, the National Emergency Supply Council, six sectors like energy, and over 20 sector-specific pools. Cooperation also includes regional actors such as Regional State Administrative Agencies, municipalities, cities, and several regional committees.
Cooperation between businesses and public administration is crucial for ensuring security of supply. NESO maintains and develops Finland’s security of supply in cooperation with the public sector, hundreds of companies, organizations, and third-sector actors. The goal is to secure the operating conditions of organizations critical to security of supply—and thus society as a whole—in all circumstances.
Based on our experience, as stated before, we strongly support the measures proposed in the Preparedness Union Strategy to strengthen public-private cooperation. We consider it very important that private sector actors are included in strengthening preparedness at all levels—from the EU level to the regional level—across various sectors. After all, companies own most of the critical infrastructure and manage most of the services, production, and supply chains essential to preparedness. To respond to threats, training and information exchange with the private sector and between Member States is essential.
In Finland, the participation of private sector actors in security of supply work is partly voluntary, partly statutory. The business community maintains a significant portion of the functions vital to society’s operation. Companies participate in NESO sectors and pools. Each company has its own preparedness processes and procedures. The sectors formed for the priority areas of security of supply are extensive, sector-specific cooperation organizations. Their activities involve various authorities, organizations, and the most significant companies in the sector. The general task of the sectors is to define objectives for the pools in their sector and to guide, coordinate, and monitor preparedness in their sector. Sector-specific pools operate under the leadership of the business community and are responsible for operational preparedness. Together with companies in the sector, the pools plan measures to develop security of supply and identify which companies are critical to the sector’s security of supply. The energy sector pools are the Gas Pool, Heat Pool, Fuel Pool, and Electricity Pool.
Given the experiences in Finland, it would be worth considering whether there is a need for a new legal initiative, perhaps a directive, which could improve comprehensive security and security of supply. This directive would require Member States to establish legislation on preparedness, along with implementing authorities. The directive—perhaps named Directive on Safeguarding Security of Supply, inspired by Finnish law—could better accommodate the diverse starting points, societal differences, industrial structures, and energy source usage across Member States than a regulation. Of course, each Member State should primarily be responsible for its own preparedness and related legislation. However, we believe that EU-level actions through a directive can support national efforts.
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