The European Commission has approved, under EU State aid rules, a €26.3 million Finnish aid measure to support Suomen Energiavarasto Oy (SEVO) in the construction of an underground hydroelectric pumped storage facility. The measure will increase the share of renewables in Finland's electricity generation in line with the EU's European Green Deal objectives. At the same time, it will help reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan.

Finland notified the Commission of its plan to support SEVO, a subsidiary of EPV, in the conversion of a non-active mine located in Pyhäsalmi into a pumped hydroelectricity storage facility. The storage unit will participate in the electricity spot markets, as well as in electricity balancing markets. The storage unit will effectively substitute in the grid electricity generated by high-cost gas-fired units with low-cost, clean electricity available notably during strong renewable energies generation conditions (such as hours with high wind infeed). It will also help integrate a higher share of renewable electricity generation in the grid.

The aid, which will take the form of a €26.3 million investment grant, will support the construction and the installation of the storage unit.

The pumped storage facility will have a capacity of 75MW and 530MWh and is expected to generate between 60 and 160GWh of clean electricity per year. The facility is envisaged to start operating by the end of 2025. Once completed, the project is expected to avoid the release of 202,000 tonnes of carbon dioxide annually.