Dominance of industry in energy demand: Implications for the energy transition

The transition to carbon-neutrality requires integration of renewable energy sources across all energy sectors, a challenge particularly acute in regions with energy-intensive industries. In Southeast Finland, a geostrategically sensitive border region of Finland with access to the Baltic, the energy landscape is defined by an industrial dominance, where pulp and paper, cement, and steel production account for approximately 80% of final energy demand. However, energy transition models often lack the required high nodal resolution to validate national pathways against the specific constraints of such concentrated industrial clusters. This study analyses Southeast Finland’s energy-industry transition to 100% renewable energy by 2050. Despite massive baseload demand, the region’s levelised cost of electricity drops to 34 €/MWh. The results expose a geographic mismatch where cost-optimisation favours exporting the region's 9 million tonnes of biogenic carbon dioxide to wind-rich areas; however, enforcing local e-fuel production raises cumulative system costs by only 1.7%. This challenges the assumption that regional renewable energy resource limitations, specifically wind power restrictions, preclude the development of viable local Power-to-X Economy opportunities. The region’s industry shifts from a passive energy consumer to a flexible component of a sustainable energy system, essential for synthesising electricity-based fuels, chemicals, and materials. These findings offer a strategic blueprint for energy-intensive regions, illustrating how industrial resilience and national security can align with deep defossilisation targets with minimal economic efficiency losses.