Finland’s Huge Battery-Storage Project to Start Construction

(Bloomberg) — A battery-storage project that will become the biggest in Finland has been given the go-ahead to start construction.

The final investment decision, taken in late February by SEB Nordic Energy’s Locus Energy and Ingrid Capacity AB, means construction in Nivala will start immediately. The 70-megawatt system — which can store power for two hours — will be operational in the second half of next year, Ingrid Chief Strategy Officer Nicklas Backer said in an interview, declining to provide financial details.

The nascent sector of the energy market is growing fast as the need to store excess electricity grows. As Europe installs more intermittent renewable sources, power prices are becoming more volatile and are increasingly dropping below zero. When that happens, battery operators can get paid to take the electricity from producers and store it for later use. 

“It’s a milestone for us, the first project outside Sweden’s borders,” Backer said. “We know the Finnish market very well, it’s fully integrated in the Nordic system. They are building a lot of wind right now and there’s a great demand for balancing. There’s also a deep intraday market which we find particularly attractive.” 

BloombergNEF expects that storage additions in 2035 will be 10 times larger than now. The current expansion is led by China, the US, Germany, Italy and the UK, it said in a November report. 

Finland’s power market is among the most volatile in Europe. It had 725 negatively priced hours last year, up from just five hours in 2021, exceeding Germany’s 455 hours and all other European countries, according to data from Aurora Energy Research. 

“We’re seeing a big challenge in Finland, given that it has increasing intermittency and a big baseload expansion with the Olkiluoto-3 reactor coming online recently,” Backer said. “If you have too much production, you will get negative prices.”

Why Power Prices Can Go Negative and What It Means: QuickTake

Ingrid, which will hold a minority stake in the project, will be the trader and asset manager of the facility. Locus Energy holds the majority stake. 

Ingrid is also expanding beyond just batteries. It has a team of 15 to 20 traders and developers focusing on buying and selling electricity and helping to optimize grids. 

The two companies are also collaborating on the construction of 13 battery systems across southern Sweden that will add 196 megawatts of flexible capacity, a partnership that was announced in September. It’s set to be ready in the second half of this year. 

Another large battery project, with a capacity of 70 megawatts/160 megawatt-hours, is set to be built in Sweden by Delta Capacity Group and investment firm Wood & Co. following a final investment decision earlier this year.

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