Climate and Energy Economist | Helping clients navigate the complexity of the green transition
𝗣𝗼𝘄𝗲𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗶𝗻 𝗙𝗶𝗻𝗹𝗮𝗻𝗱 𝗮𝗻𝗱 𝗦𝘄𝗲𝗱𝗲𝗻! ⚡ Finland and Sweden are striving for net-zero emissions by 2035 and 2045, respectively. With 87-96% of their electricity already CO2-neutral, the focus is now on full electrification and decarbonization across industries, transport, and heating. These goals are ambitious - achieving them requires €178 billion in investments for Finland and €243 billion for Sweden by 2040. However, the existing market design faces hurdles like price volatility, infrastructure delays, and investment uncertainty on both the demand and supply side. Without addressing these risks, electrification on this scale is likely to fail. Investments need to be long-term commercially and financially viable across the entire value chain! How can we create a stable, attractive environment for green investments that accelerates electrification? We suggest a mix of improved market design and targeted mechanisms - including capacity remuneration mechanisms, publicly-backed power purchase agreements, and stable regulatory frameworks. With these tools, Finland and Sweden can unlock the full potential of electrification, creating over 120,000 high-value jobs across the two countries, lead Europe’s energy transition, and set a global example for achieving net-zero goals. Read our report for Fortum here: https://lnkd.in/d-tsNBGG
Electrification in Finland and Sweden presents significant economic and employment opportunities, supporting high-productivity jobs and boosting industrial competitiveness. However, investors face barriers and need long-term frameworks to support these investments. Fortum commissioned Copenhagen Economics to analyse the economic potentials of electrification investments in Finland and Sweden towards 2040 and assess optimal market designs. In our delayed electrification scenario, EUR 122 billion investments are expected in Finland from 2025 to 2040. In a decarbonised economy, electrification has the potential to generate EUR 56 billion more in investments in Finland towards 2040, totalling EUR 178 billion. For Sweden, electrification can generate EUR 200-300 billion in investments by 2040, depending on the scenario. We recommend several instruments to enable electrification investments in Finland and Sweden. To discuss our findings, contact CE experts Signe Rølmer Vejgaard or Morten May Hansen. Find the full publication here: https://lnkd.in/dEa6tzeQ #copenhageneconomics #electrification #decarbonisation #sustainability
