Climate change and transformation of the energy system
A new climate agreement was adopted at the UN’s climate change conference in Paris in 2015. A qualified majority of 55 countries that produce at least 55% of the world's greenhouse gas emissions was required for the agreement to take effect. The threshold for the agreement’s entry into force was crossed in October 2016, when it was ratified by the EU, among others. The Paris Agreement entered into force on 4 November 2016. Finland committed to the agreement on 14 November 2016.
In addition to emissions-reduction targets, the agreement includes long-term adaptation goals, as well as the goal of shifting towards low-carbon and sustainable development.
The energy industry plays a key role in combatting climate change. The structure of electricity production is changing as the share of renewable energy grows and adjustable fossil-fuel condensing power production decreases. Wind and solar energy will soon be profitable without subsidies.
An increase in wind and solar power will result in a scarcity of power, flexibility and system inertia. Price fluctuations will increase, which will bring business opportunities to flexible production and consumption and energy storage technologies.
Fingrid does its part to combat climate change by building and maintaining the main grid. The transformation in the structure of electricity generation due to the efforts to mitigate climate change results in changes in the power system. We make it possible to connect new forms of energy production to the grid. We ensure the sufficiency of system reserves also in the future and prepare for a decline in flexible production capacity while at the same time developing the electricity market to meet the needs of a low carbon power system.
Our role is to actively propose improvements to the electricity market model that will make it possible to stay on a market-based and clean path. We seek new solutions for grid operations to ensure that the power system functions reliably and, with support from the markets, to find a balance between production and consumption.
In future, our operating environment will expand to encompass an increasing number of themes, from retail markets to European-level international co-operation. New players will become our customers. Our co-operation with distribution system operators is more important than ever.
Climate change increases the likelihood of violent storms and other extreme weather phenomena. They can cause widespread and sustained damage to electrical networks. This requires a high level of preparedness from us, as part of continuity management.