How Finnish energy sector is navigating in the VUCA world. Impact of wind and solar power rush on the Finnish energy sector

Abstract

Finnish energy sector is currently facing a situation of turmoil caused by the rapid transition from non-renewable to renewable energy sources. The transition is of course a need of the hour since the fossil fuel reserves are rapidly depleting. Also, their negative impact on the environment cannot be ignored. However, this rapid green energy transition is causing a rush towards solar and wind power. Solar and wind energies, being intermittent sources of energy, are completely dependent on weather conditions, hence beyond human control. Due to this uncertain nature of solar and wind power, Finnish energy sector is seeing volatility in energy price and market cannibalization.

VUCA is the acronym of- Volatility, Uncertainty, Complexity, and Ambiguity that cumulatively denotes a situation of turmoil such as one currently happening in Finnish energy sector. Several frameworks like BEAT, LACE, VUCA2.0 etc. exist in literature that can be used to combat VUCA in general. However, these existing frameworks usually contain a broad spectrum and sometimes vague ideas that cannot be implemented directly in a specific business context.

This thesis compiles different counter-VUCA strategies like, agility, collaborative ecosystem, lean operations etc. from existing literatures and constructs a tentative theoretical framework for combating VUCA specifically in Finnish energy sector. This framework is different from the existing ones in the sense that it summarizes the central philosophies from multiple, often overlapping VUCA-combating strategies to figure out core actionable units that can be directly implemented in Finnish energy sector. Based on semi-structured interviews from 12 participants from different domains of Finnish energy sector, followed by thematic analysis of the empirical data, a new counter VUCA framework SPIIDI has been proposed. SPIIDI is the acronym of six actionable units - Developing (S)TORAGE infrastructure and technologies, Flexibility of (P)RODUCTION, (I)NCENTIVIZATION to production and consumption sector, Building grid and cross-border transmission (I)NFRASTRUCTURE, Development of (D)EMAND sec-tor, Developing (I)NVESTMENT opportunities – that can be used in a stepwise manner to alleviate turbulence in Finnish energy sector caused by the ongoing wind and solar power rush.