Understanding Kainuu’s energy landscape

Abstract

The Centre of Expertise for the Green Transition in Upper and Eastern Kainuu, in the joint JTF project of Hyrynsalmi, Kuhmo, Puolanka, Ristijärvi, and Suomussalmi, LUT University aimed to carry out energy modelling for the Kainuu region (objective 1). The modelling examined the renewable energy potential in the area (the 2050 renewable energy scenario). The second objective was to analyse the significance and interlinkages of energy production and the green transition with different sectors of the economy. In addition, the third objective was to analyse the societal impacts of the green transition. These objectives were achieved. Below are the key results of LUT University’s sub-project. The green transition is a broad societal shift in which sustainability and planetary boundaries are taken into account in all economic, cultural, and social activities. In the Upper and Eastern Kainuu area, operations already largely follow these principles, as the economic structure is strongly connected to the use of renewable forest resources, bioenergy, wood construction, tourism, and other nature-based services such as photography, as well as the logistics and services associated with them. In addition, wind power has been built in the region within the limits set by military radar restrictions. More wind power is also planned, although its development is expected to decrease significantly across Finland by the mid-2020s. The first objective of LUT University was to conduct energy modelling of the renewable energy potential in the region by 2050. The modelling was carried out by comparing the results of two modelling tools, EnergyPLAN and LEAP, regarding the transition to a 100% renewable energy system. One of Kainuu’s strengths is its already high share of bioenergy, which is expected to remain strong in the future. The most significant changes in the transition to renewable energy would concern logistics and the electrification of road transport, as well as phasing out fossil fuels, the biggest challenge being the rapid increase in electricity demand caused by electricity intensive industry. EnergyPLAN, which uses LUT’s demand model, projected lower future consumption than LEAP, but both models indicated similar trends. The transition to a 100% renewable energy system is driven primarily by wind power, with solar energy complementing production during the summer season. The scenario shows substantial growth and need for energy storage — including batteries, biomass as storage, and Power to X technologies — which are essential for balancing the variability of wind and solar. The models also highlighted the increasing role of biomass in district heating and industry as peat is phased out, along with the full utilization of existing hydropower and changes in local combined heat and power (CHP) production, especially if heat production in the area becomes more electrified. According to the modelling, data centres are the most significant new driver of electricity demand in Kainuu. Even assuming that all existing hydropower and current wind farms operate at full capacity, local production cannot cover the continuous, year-round electricity needs of the planned data centres. As a result, the region would need either considerably more generation capacity or increased electricity imports, which would put additional pressure on the power grid. Furthermore, if existing CHP production in Kainuu were significantly reduced during the energy transition, the region would need not only new generation capacity but also replacement electricity for the output lost from CHP. The hourly grid flow modelling shows that new transmission lines and stronger grid infrastructure are required to manage both the growth in renewable capacity and the heavy, continuous loads of data centres. Without additional stable and flexible generation sources or large-scale seasonal storage, the future system would remain vulnerable to supply–demand imbalances, and the region’s total electricity consumption could nearly double when the normal regional demand is added on top of the data centre load. In addition to the energy modelling, a key objective of LUT University was to analyse the cross-sectoral impacts within the green transition (objective 2) as well as the societal impacts of the green transition (objective 3). These were examined during the project’s workshops. LUT University was the main organiser of the workshop held in Kuhmo on 3 December 2024, with project staff from the municipality of Hyrynsalmi and researchers from the University of Oulu and the University of Helsinki facilitating the event. The workshop participants strongly emphasised the preservation of natural and cultural values as the green transition progresses. Participants consistently highlighted the importance of silence, clean waters, biodiversity, and cultural landscapes, as these form the foundation of local identity, well-being, and nature-based tourism. Concerns were raised about habitat degradation, increasing regulation, and the cumulative impacts of energy production, particularly wind power, on landscapes and traditional livelihoods. At the same time, participants recognised opportunities to strengthen local culture, support entrepreneurship, and enhance community cohesion, all of which can contribute to sustainable regional development. Energy related discussions underscored the importance of energy self-sufficiency, improved heating systems, and the increased use of solar power, heat pumps, and energy saving measures. The need for reliable infrastructure, grid upgrades, and well targeted subsidies was highlighted repeatedly. Although renewable solutions such as biogas and decentralised energy production were viewed positively, challenges related to limited investment capacity, high energy prices, and pressure from large energy users (such as data centres) were also identified. Overall, the workshops conveyed a clear message: the need to balance environmental values with regional energy ambitions and to ensure that the green transition is fair and locally meaningful. The societal impacts of the energy transition involve changes in the local economy, community functioning, and everyday practices. As regions move toward increasing renewable energy use and more sustainable, low carbon energy systems, new job opportunities emerge in construction, maintenance, forestry, and renewable energy technologies, while more traditional sectors face pressure to adapt. Communities experience changes in land use, landscapes, and biodiversity, which can influence identity, wellbeing, and tourism. At the same time, increased energy efficiency and decentralised production can enhance energy self-sufficiency, security, and resilience, especially in rural areas. However, the realisation of these benefits depends on the fair distribution of costs and benefits, transparent decision making, and policies that support vulnerable groups, ensuring that the transition strengthens, rather than weakens, social wellbeing and local livelihoods. This report is organised into three parts because of the different research settings and methods, and also to make it easier for the reader. Part I presents the data and results on Energy System Modelling for Kainuu (2020-2050). It outlines the current energy profile and future goals for the Kainuu region. It also highlights the region's reliance on renewable energy sources, such as wind and biomass, and sets ambitious targets for increasing renewable energy use and achieving self-sufficiency by 2040. The document also discusses the potential for biogas production, the role of forestry in biomass energy, and the socioeconomic impacts of transitioning to a green energy system. Two modelling tools, EnergyPLAN and LEAP, were used to analyse and predict future energy scenarios, emphasising the shift towards renewable energy and electrification of the industrial processes and transportation. Part II estimates the impacts of the new data centre ecosystem, which is emerging in Kainuu. There are several data centres in the initial stages of planning in the area. Kajaani already has a supercomputer working, and there are also plans to extend the project by including two 10 MW data centres. The electricity grid system in Kainuu needs to be strengthened to accommodate more renewable and low-carbon electricity generation and data centres. Plexos energy system model was used to model the grid system of the area to understand electricity flow. This model considers electricity consumption and generation for the data centres, and the electricity flow in the existing electricity lines. Part III presents the discussions in a workshop held in Kuhmo City Library in December 2024. The purpose of the workshop was to map the operational environment of the Kuhmo area from the perspective of different parties, including municipalities, entrepreneurs and companies, as well as associations, to consider the possibilities of the green transition as well as challenges, and how the region could best benefit from the green transition. Participants shared their vision for 2035 related to their personal and professional lives and links to the green transition. To facilitate the discussions in three groups, a method of a card game designed for dialogues by the University of Helsinki was used.