“Finland is on the brink of a renewed revolution”

Finland is consistently ranked among the top cleantech experts in the world. Solutions that were considered unrealistic just ten years ago have progressed faster than anyone dared to hope. Janne Peljo, Chief Climate Expert at the Confederation of Finnish Industries, explains how the clean energy sector has developed and what the future looks like.

Janne Peljo has worked with climate issues and renewable energy for over a decade. During this time, the world of cleantech has turned around.

– At the time of the Paris Agreement, few people saw the opportunities that climate change would create. Fast forward to the present day: everyone has realised how huge investments are required to mitigate climate destruction both in Finland and internationally, Peljo says.

– It has been a privilege to observe how technologies that were still labelled unrealistic in 2015 have progressed on the market much faster than hoped.

The unlikely trajectories mentioned by Peljo include upheavals in solar power, wind power, battery costs and the hydrogen economy, which were not thought possible until the 2040s. In both wind and solar power and battery technologies, there is talk of creating completely new sectors. In 2015, it was not yet possible to see that there would be more than 5,000 megawatts of wind power capacity in Finland at the beginning of 2023. 

Advanced cleantech, Finland’s gold mine

Peljo’s background is purely in the financial sector and corporate strategy. Now he spends his working time researching the economic opportunities that climate change brings, among other things. Finnish companies have good opportunities to access the investments required by the green transition and thus build profitable, sustainable business. Finland is always – if not number one – in international cleantech rankings at least in the top three most innovative. We have extensive and deep cleantech expertise from which to make a profit, as Finland has a small domestic market and an export-driven economy.

“It has been a privilege to observe how technologies that were still labelled unrealistic in 2015 have advanced much faster than hoped in the market.”

According to Peljo, Finland’s competitive conditions are built on traditional engineering virtues, such as high expertise and energy-, resource- and raw material-efficient production. There is an even greater global demand for our expertise now that other countries are equally striving to reduce their emissions.

By far the most opportunities open up around clean and cost-effective electricity. Finland not only has one of the best environments in Europe for producing wind power, but also has the potential to increase production significantly in the future.

– Finland’s already relatively low-emission electricity system will quickly become emission-free, Peljo says.

– And Finland is changing in a historically significant way. We can move from being a net importer of electricity to a net exporter of electricity.

Times of neo-industrial upheaval

According to Peljo, Finland is currently facing a new industrial revolution, and the revolution is built on the availability of clean electricity. In many sectors, emissions can be reduced by switching from fossil fuels to electricity-based ones. Finland is thus an attractive investment and operating environment.

So the future looks pretty promising? Talouselämä also reported the recent boom in industrial investment in Finland. However, the article still urged people to refrain from corking sparkling wines, and Peljo confirms that competition for investments is fierce not only globally but also within Europe.

– Of course, Finland is not alone in the green transition. We need to be very alert to turn our great potential into a competitive advantage and ability to attract green transition industries.

Investment decisions are always the sum of many factors. Finland is somewhat remote, but nevertheless an important part of the global investment market, and its attractiveness can be increased by ensuring the production and availability of emission-free electricity. A smooth and predictable licensing system also plays an important role in terms of investments.

Giving actual investment tips is not part of Peljo’s job description, but he notes that the world is full of capital and investors looking for lucrative investments linked to the green transition.

– International investors are looking at Finland very closely. Foreign investors and industrial operators are interested in the predictability and consistency of industrial policy in Finland. They also want to know that Finland is certainly keeping its course towards its ambitious climate goals, and there is enough clean electricity.

Wildest scenarios

If we want to reach our global climate goals in 20 years’ time, emissions across the globe should be net zero in less than 20 years. Emissions and sinks should therefore be equal. This means gigantic emission reductions in every sector of society.

In Peljo’s wildest future scenarios, flying aircraft generates little or no emissions. The planes fly on electricity or synthetic fuels refined from hydrogen. Transport is globally emission-free and the food sector has been revolutionised. The sectors of the economy have fundamentally changed. Emissions and, above all, the use of fossil fuels must have been driven very close to zero. 

Is humanity capable of such an effort? After all, we are fighting against time when it comes to climate change. Peljo’s glass is half full. He is convinced that the market works and the engineers know what they are doing. The development of technologies can surprise with its speed, as we have already proven.

– On the other hand, I am not entirely convinced that clear and strong enough policy guidance can be implemented around the world, and whether citizens will accept the rapid change that is needed.

Recipe for massive emission reductions

The future of clean energy also depends to a large extent on the courage of Finnish companies and decision-makers. Is Finland bold enough to shape the operating environment so that we are globally competitive?

Peljo believes that Finnish companies will be able to export technology products and services that are competitive, above all, in terms of resource and material efficiency. We already know how successful large-scale emission reductions will be. The recipe is similar in Finland and internationally. Peljo explains:

– First, energy saving measures will be taken where they are technically feasible and economically viable. Next, electricity production will be made emission-free, and then, in order of profitability, sectors of the economy will be electrified, starting with transport, heating and industry. Where electrification is not possible, bio-based alternatives are used or hydrogen is used. Emission-free electricity is used to produce hydrogen, and hydrogen is used to reduce emissions to the last of them.

This slightly sharpened path of action is largely followed by other countries as well, and according to Peljo, it has been estimated that reducing emissions globally will require cumulative investments of USD 275,000 billion from now on until 2050. In this respect, the green transition will create a huge investment potential and a huge market.