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Finland has adopted a high profile in climate change mitigation. A national target of achieving carbon neutrality by 2035 has been declared. As a part of this, the use of coal for energy purposes has been banned from May 2029 onwards. The Nordic electricity market was a world fore-runner in creating a liberalized, multi-national electricity market in the 1990s. At present, the electricity systems of Finland, Sweden, and Norway are already very low-carbon. The Baltic countries Estonia, Latvia, and Lithuania joined the Nordic market about a decade ago. Estonian electricity production is the most carbon-intensive of all the EU countries due to the extensive use of domestic oil shale. Especially Lithuania still suffers from capacity deficit created by the closure of the Soviet time nuclear reactor Ignalina in Lithuania. This paper presents the ambitions of the EU and national level energy and climate policies and models the multi-national impacts of Finland’s forthcoming closure of coal-fired generation. We also take into account Sweden’s planned decrease in nuclear generation. We find that these national-level policies have an impact on the Baltic countries as reduced import possibilities and increasing electricity prices, and the expected rise of the EU CO2 allowance prices amplifies these. We further find that the abandonment of coal and nuclear power plants increases the net import and increases CO2 emissions in neighboring regions.

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Energy is a fascinating subject to study. Not only is the whole energy industry undergoing a historical transition, but the problems we face require knowledge in both technology, economics and social sciences, which makes them both interesting and demanding. I feel privileged to have been able to combine all these aspects in my studies and to be part of the energy transition that is going on in the world. To be able to combine these perspec-Thesis as well has been a cherry on top. I want to thank my supervisor, Professor Sanna Syri, for providing me the opportunity to study this interesting topic and letting me be part of the Energy Efficiency and Systems group at Aalto University. Thank you Sanna for your valuable comments and words of encouragement. I also want to thank my advisor Anahita Farsaei for all the tips and support along the way. Thank you Ana for sharing your knowledge about market power indices and making me question my calculations. All my other colleagues at Aalto deserve a thank you as well. Thank you, especially Ville, for helping me with the data for the Lerner index and thank you Tiia for all the discussions and great lunch company. As this thesis marks the end of my studies, I want to thank all of you that have made my years at Aalto and in Otaniemi both many and unforgettable. Without all the amazing people I have met, I would probably have graduated a lot quicker, but many life lessons and fun experiences shorter. After all, the courses can only teach you so much. So thank you Teknologföreningen for letting me bear responsibility and for being a home, thank you for all the Friday laughs and bubbles, the sorts of things that keep you going. Thank you Phux 15 for letting me be your Phuxivator and FTMK for making me Feel so welcome over the language barrier in Otaniemi. Thank you Laulikki Äpy and everyone at Rektorsgatan 1 for all the fun times, and not without a reason. Lastly, I want to thank my family, grandparents and everyone else who have supported me through the years. Thank you Mamma and Pappa for always believing in me. I always knew I could do it, thanks for you always knowing it too. And finally, thank you Markus for being by my side all along.