30.05.2022 | The importance of local expertise

How Axpo’s long-term commitment powers Finland’s green transition

Tobias Kistner

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A Swiss-based energy company with a presence across Europe, the Axpo Group promotes sustainable development through renewable energy and innovative solutions. One of the markets where the company sees significant potential for further growth is Finland.

While Axpo is Switzerland’s largest producer of renewable energy, the company also focuses on investments in solar and wind power across Europe, including technologies which enable their deployment. In doing so, Axpo actively supports the transition to climate-friendly electricity production throughout the continent.

In Northern Europe, Axpo Nordic was established in 2003 to serve energy markets in the Nordic and Baltic countries. Headquartered in Oslo, the subsidiary’s Head Origination Kjetil Holm, a Norway native, explains, “We want to be close to our customers, and not just in a geographical sense. We want to speak their language, understand the local culture and have insight into the local market. Local expertise is very important to us.”

In Finland since 2009, today Axpo manages around 1.2 TWh of annual wind power capacity spread across some 30 wind farms. Axpo Finland Country Manager Harri Piipponen says, “We are an energy company committed to zero-emission clean energy. Environmental values are at the core of what we do, and we want to support the green transition in Finland.”

The transition from fossil-fuelled to green driven growth has been accelerated in Europe by the impact of the war in Ukraine on fossil fuel imports, as well as a new report by the Intergovernmental Panel on Climate Change (IPCC).

Holm explains, “Alternative forms of energy are now more necessary than ever. There is a need for flexibility in energy production and the ability to adapt to the changing needs and increasing environmental awareness of our customers. The production of wind and solar power in Europe is growing faster than expected, and electricity storage solutions are also becoming increasingly important.”

Long-term agreements

Finland’s Government Programme aims for renewable sources to account for at least 51 per cent of end-user energy consumption by 2030. Renewable energy production has grown exponentially over the past decade, with thousands of megawatts of new wind power in the planning and construction stages.

While Axpo does not build or own wind farms in Finland, it does contribute to their construction, buying the electricity they produce under long-term power purchase agreements and then selling it to the market.

“When government subsidies for new wind power projects are withdrawn, we can sign a long-term power purchase agreement (PPA) with the electricity producer,” Piipponen explains. ”This ensures stable cash flow for the producer, which is usually a requirement stipulated by the parties that finance the projects.”

Under a PPA, the electricity purchaser and producer agree on the purchase and delivery of electricity at a fixed price for a pre-determined period, such as 10 years. The agreement protects both parties from fluctuations in the market price of electricity.

“The power purchased under a PPA can be sold on to an industrial company, for example, which will then receive not only electricity but also guarantees of origin (GoO) issued by the transmission system operator which document the source of the electricity and that it is zero-emission and renewable,” he adds.

Holm and Piipponen stress that long-term agreements play a key role in Axpo Nordic’s operations, making it possible to strengthen the green transition and combat climate change.

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