Recent events have reminded us how vulnerable the global energy system still is and how dependent Europe remains on oil imports. Tensions in the Strait of Hormuz, Russia’s war of aggression in Ukraine, and fluctuations in fossil fuel prices show that energy is closely linked to competitiveness, security of supply, and security policy.
Emission-free electricity generation and reliable electricity networks reduce our dependence on fossil fuels and create the conditions for competitive electricity prices.
Electrification is also one of the most effective ways to mitigate climate change. Emissions decrease when transportation, industry, and heating switch to green electricity. At the same time, society becomes less dependent on imported fossil energy.
The world is already on this path when it comes to electricity, although the transformation of the entire energy system is still moving too slowly. According to the International Energy Agency (IEA), global electricity demand is expected to grow by an average of 3.6 percent per year through 2030 – about 50 percent faster than in the previous decade. In 2024, electricity demand grew faster than the global economy under normal conditions for the first time in three decades. At the same time, the share of renewables and nuclear power is forecast to rise to around half of global electricity generation by 2030, and renewable electricity is expected to overtake coal as the world’s largest source of electricity generation.
In addition to the green transition, the rapid growth of data centers is affecting electricity demand. However, data centers can also function as part of a flexible energy system. Data centers generate significant amounts of waste heat, which can be recovered and fed into district heating networks. European Union legislation, through the Energy Efficiency Directive, also requires the use of waste heat from data centers when it is technically and economically feasible.
The race for green electricity is already underway. China is investing in renewable energy at a record pace. India is following suit. Poland aims to replace coal-fired power with renewable energy and nuclear power by 2040 by making significant investments in renewableenergy, nuclear power, and electricity networks. Spain has succeeded in rapidly reducing its dependence on gas and is now benefiting from affordable electricity. Cheap electricity is attractive even to those who are not concerned about climate change. At the same time, the high share of fossil fuels is still reflected, for example, in higher electricity prices in Italy.
Finland has an excellent starting point in this competition. We have built one of the world’s cleanest electricity systems: already 96 percent of our electricity generation is fossil-free. At the same time, around two billion euros will be invested in the main grid in the coming years so that growing electricity generation and new industrial investments can be connected to the grid. Moving away from Russian energy showed that Finland can quickly strengthen its energy self-sufficiency when the direction is clear.
For the green energy transition to succeed fully, investments are also needed in distribution networks. Without them, new industrial investments, electrifying transportation, and distributed renewable energy generation will not progress quickly enough. At worst, the electricity network could become a bottleneck that slows development. Without sufficient investments in transmission and distribution networks, energy storage, and flexibility solutions, clean electricity cannot be delivered where it is needed. Electricity networks are a critical part of society’s secure infrastructure.
The European emissions trading system has been one of the world’s most effective climate measures. It has steered investments away from fossil fuels and toward cleaner solutions. Its predictability and future must continue to be safeguarded. The European Commission’s recent electrification action plan aims to double the share of electricity in Europe’s energy consumption by 2040, so the targets have been set. At the same time, we must ensure that electricity networks are built quickly enough to meet growing demand.
I am proud that Ensto can contribute to building this change through its own work. Reliable and safe electricity distribution solutions enable the electrification of society, support climate targets, and reduce our dependence on fossil fuels.
Our solutions help strengthen the operational reliability of electricity networks, shorten power outages, enable renewable energy to be connected to the grid, improve electrical safety, and increase society’s resilience to extreme weather events.
Strong electricity networks are one of the most important pillars of a sustainable and secure future.
Iida Miettinen
The author of the text is Vice Chair of Ensto’s Board of Directors and one of Ensto’s owners.
