Public Affairs

Through our Public Affairs activities, we support Finnish society on its path towards electrification and the clean energy transition. We strive for an effective collaboration with decision makers, media, associations and public officials. Our goal is also to develop Caruna's public image and act as a partner in the societal field.

Caruna is committed to good lobbying practice.

The development of the electricity grid is a prerequisite for the clean transition

Electricity consumption in Finland is growing rapidly due to customers’ growing electricity needs and the electrification of industry and service production. At the same time, the production structure of electricity is changing as the system moves from fossil energy sources to clean forms of production. This change will mean a huge increase in electricity use, which will require significant investments in the electricity grid.

The security of electricity supply and a reasonable power price attract investments to Finland. According to the Confederation of Finnish Industries (EK), almost EUR 260 billion worth of green transition investment projects are being planned 2, most of which rely on secure, clean electricity. The success factors of strong energy grids have been underpinned by a stable and predictable operating environment. Also at EU level, the importance of electricity grids have recently been realized. The European Commission, the European Council and the International Energy Agency, among others, estimate that electricity grids require significant additional investments, most of which are needed in ageing distribution grids. These messages are strong evidence that electricity grids are key to achieving the EU’s goals, and that action is now needed. Unfortunately, the trend in Finland is different.

The Energy Authority’s regulatory methods for distribution grids that entered into force on 1 January 2024 have serious effects. They weaken the investment capability of grid companies, such as Caruna. The regulatory methods jeopardize proactive and planned grid development and postpone investments that enable growth. At the same time, the employment situation is being weakened, and the implementation of socially significant vitality and industrial projects in Finland might be lost. Caruna’s investment need for 2024–2036 is over EUR 2 billion. This is not possible to implement without a change in the regulatory methods. For the years 2024–2027, which are critical for the clean transition, the change is even more dramatic: the investment need is EUR 591 million, but the investment capacity enabled by the regulatory model is only EUR 345 million. This means almost halving the planned investments in this period. The investment level limited by the new regulatory methods means a transition from the proactive development of the distribution grid to reactive operations: investments are only started when the needs become concrete. The change will inevitably lead to a slowdown of the energy transition. The reliability of electricity distribution is reduced in the reactive development of the grid, because the spare capacity necessary for reliable operation of the grid must now be used to connect new customers to the grid. Investments also need to be prioritized very strictly between growth and renovation, which leads to an increase in the repair debt of the electricity grid, and the risk of weakened security of supply increases. Finland’s 77 grid companies are responsible for the investments needed for the development of the distribution grid. In addition to a proactive and profitable operating environment, investments require well-functioning permitting, new skills, utilizing innovations, and new kinds of financial incentives for smart solutions.

While some of these success factors have been weakened, the surprising pace of electrification and new critical infrastructure threat scenarios have placed security of supply, resilience and continuous supply of electricity to the centre. A constantly developed and maintained electricity grid guarantees the energy supply of an electrifying society at all times, even in the midst of major changes. At its worst, a too low level of investments in the energy system threaten Finland’s 2035 climate neutrality target, which relies very much on the successful electrification of society. Investments in energy take years to implement, and the timeframe set for the energy transition is very ambitious. Finland has an excellent opportunity to be a model country for carbon-neutral solutions, where an abundance of new industries and wellbeing based on clean electricity will emerge.

Total investments will determine Finland’s energy future.

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Key messages to decision makers

Strong distribution grids bring vitality to the EU, Finland and municipalities. Distribution grids need anticipatory investment in order to enable the clean transition and improve security of supply.

The new regulatory model of the Energy Authority must be amended to enable critical investments by distribution grid companies in order to ensure the clean transition and security of supply.

Permitting for clean energy distribution needs to be made quicker and streamlined to ensure climate goals are met on schedule.

Regulation must be predictable and enable technological development. As electricity grids have a lifetime of several decades, grid regulation must be long-term.

Liittymät pienkohteisiin kuten omakotitaloon, paritaloon tai vapaa-ajan asunnolle

When the power goes off, everyone notices

Security of supply requires concrete action, investments and collaboration. Reliable electricity distribution is a critical enabler of a functioning society, and to ensure it, it is essential to take care of electricity grid development.

Distribution grid investments enable the clean energy transition

Finland is undergoing an unprecedented energy transition as we move from fossil fuels to clean energy sources. Electricity distribution grids and their development is in the centre of this process. The investment need of the Finnish electricity distribution grid is around 1.2 billion euros annually, of which Caruna’s share is around 200 million.

Becoming a European energy champion is not easy

The clean energy transition is not only about climate targets, but also economic growth, local and European competitiveness, as well as safety and security of supply. A successful energy transition is vital to all us Europeans, and all tools available to achieve it must be utilised. The European Commission and European Council have added breaching the distribution grid investment gap to their agenda in a completely new way this year, which is great.