I have studied energy transition since 2010 – as a consultant and expert, as well as a doctoral researcher, postdoctoral researcher, and now as research director of a sustainable energy business research group. The timely discussions at Vaasa Energy Week in March 2026 made me realize that the bottlenecks of energy transition remain strikingly similar to those of the 2010s. Why is this the case?
In this blog post, I examine the bottlenecks of renewable energy across two temporal layers: as structural barriers in the 2010s and as implementation challenges in the 2020s.
In public discourse, solar energy was long framed as “cottage energy,” diminishing its role within the broader energy system. This reflected a deeper mindset in which decentralized energy production was seen as marginal compared to centralized generation. For a long time, solar energy occupied a negligible position in Finland and was even treated as a “wild card” in energy strategies. This cannot be explained solely by economic or technological factors
Our research shows that the key explanation lies in socio-cultural framing. Solar energy was not perceived as a neutral technology; rather, it was systematically framed as small-scale, local, and secondary. It became associated with summer use, summer cottages, and decentralized production, not with the core of the national energy system.
In other words, solar energy was not inherently “cottage energy” – it was made into such. This reflects a broader mindset in which decentralized production was treated as an exception rather than an integral part of the energy system.
At the same time, solar energy was consistently contrasted with “serious” energy sources. Bioenergy was framed as a domestic and natural solution, nuclear power as stable baseload. Solar energy, in contrast, appeared uncertain and disruptive.
This framing also involved a temporal paradox: solar energy was portrayed as both too immature and too late. On the one hand, the technology was not yet ready; on the other, Finland was said to have already missed its opportunity to develop it. This “too early – too late” framing effectively locked decision-making.
Solar energy was also made temporally and geographically distant: something for the future or something that works elsewhere, such as in Germany, but not in Finland. This removed any sense of urgency.
The marginalization of solar energy cannot be explained solely by natural conditions or economic factors. Our recent comparative study of the Nordic countries shows that differences in solar deployment are not driven by solar irradiation or resource scarcity, but primarily by policy design, timing, and predictability. The position of solar energy in Finland was not an inevitable consequence of geography, but largely the result of political and institutional choices.
The study also highlights that in the Nordic countries, solar energy has often developed as decentralized, self-consumption-based production rather than large-scale plants. This should not be seen as a weakness but as a system-specific feature that can enhance flexibility and local acceptance. What was labeled as “cottage energy” can thus also be interpreted as an anticipatory adaptation to a more decentralized energy system.
The bottlenecks of renewable energy can be categorized into three main groups: institutional, economic, and technological. This framework helps explain why the energy transition has proven so challenging.
First, institutional barriers relate to regulation, permitting processes, and decision-making structures. In particular, the slowness of permitting has emerged as a key bottleneck. Multi-stage environmental impact assessments, overlapping regulation, and lengthy appeals processes can delay projects by years. This is not merely administrative inefficiency but reflects deeper institutional structures.
Second, economic barriers concern investment risks and cost allocation. Although production costs have declined, renewable energy projects remain capital-intensive and sensitive to policy environments. A particularly critical issue is the cost of the electricity grid: who pays for grid expansion and system transformation?
Third, technological and infrastructural barriers relate to the functioning of the electricity system. The growth of renewables requires flexibility, storage, and new market mechanisms. At the same time, the logic of the electricity system is changing. As conventional power plants decline, the grid loses part of its inherent stability. Renewables do not provide the same automatic balancing, so new solutions, such as storage and demand flexibility, are needed.
In Finland in the 2010s, the deployment of renewables was constrained primarily by institutional and political factors. Key barriers included path dependence in the energy system, strong industrial interests, insufficient support policies, and skepticism toward solar energy.
These findings were also reflected in earlier policy debates. The energy system was not technologically neutral but deeply embedded in institutions, investments, and power relations. This made change slow and prone to lock-in. The result was a system in which renewables, especially solar, remained marginal despite their recognized technical potential.
Together, these factors made the energy transition a classic “wicked problem”: not a single technical or political issue, but a complex systemic transformation.
In the 2010s, in addition to framing, the energy system was characterized by strong path dependence. Existing structures (centralized production, nuclear power, and industrial energy demand) shaped policy and limited alternatives. As one member of parliament I interviewed for my dissertation noted: “Decisions in the energy industry are still based on the idea that power plants are the backbone of the system. And when we talk about electricity, the underlying image is the Tornio steel mill and forest industry plants—facilities that do not and will never run on wind power.”
In the 2020s, the situation has changed fundamentally. The costs of solar and wind power have fallen, and the technologies are widely deployable. According to the IEA, renewables and batteries are prime examples of technologies whose costs have plummeted and competitiveness improved rapidly.
Yet the energy transition is not advancing at the expected pace. This was also evident at Vaasa Energy Week 2026, where many speakers emphasized that the main challenges now lie in implementation, infrastructure, and regulation.
Technology is largely mature and competitive. The bottlenecks have shifted to system-level factors: permitting, grids, markets, and policy.
Permitting processes are not just a practical issue but a structural institutional bottleneck. They involve complex and slow environmental assessments, overlapping authorities, and constraints related to land use, noise, and security (especially radar systems).
The slowness of permitting has been widely recognized as a central bottleneck. Long development timelines, multi-layered regulation, and appeals processes create uncertainty and delay investments. Streamlining permitting is therefore seen as essential for accelerating investment.
Speakers at Vaasa Energy Week emphasized that the main bottleneck for wind and solar projects is no longer financing or technology, but the unpredictability and duration of processes. This reflects not just administrative inefficiency but the system’s limited capacity to handle rapid change.
International comparisons reinforce the importance of permitting. This was also a central theme at a conference organized by the College of Europe in Brussels in April 2023, where we focused in our panel discussion on accelerating renewable energy permitting to speed up deployment. Ultimately, the pace of renewable energy projects is determined above all by the efficiency of permitting processes and the availability of grid connections. This underscores that the bottlenecks of energy transition are increasingly administrative and institutional rather than technological.
Another key bottleneck is policy predictability. Renewable energy investments are capital-intensive and long-term, making them highly sensitive to the policy environment.
A recurring message at Vaasa Energy Week 2026 was that investment requires a stable regulatory framework. Short political cycles are at odds with long investment horizons, and sudden changes in subsidies or regulation increase risk. The issue is not only the level of support but the lack of long-term policy consistency.
Nordic comparisons confirm this: stable and predictable policy frameworks lead to smoother and faster renewable growth, whereas abrupt policy changes create boom–bust investment cycles.
At Vaasa Energy Week 2026, hydrogen economy and flexible energy solutions were highlighted as key to balancing the energy system. One of the strongest messages concerned the electricity grid: renewable generation is growing rapidly, but grid development has not kept pace. Transmission capacity limits new connections, connection queues are increasing, and grid investments lag behind generation growth.
The grid is not only a technical bottleneck but also a political and economic issue: who pays for the transition? Grid investments and transmission costs can become significant barriers, especially for decentralized production.
Moreover, the growth of renewables requires flexibility – energy storage, demand response, and sector coupling. The lack of these solutions remains a major bottleneck.
Local acceptance remains crucial for renewable deployment. Project realization often depends on how costs and benefits are distributed. Participation and local ownership can increase acceptance.
At the same time, decentralized production that was once dismissed as “cottage energy” has become a core element of the energy system. Consumers are becoming producers, challenging traditional centralized models and power structures.
Energy transition also introduces new challenges. Production of clean energy technologies is highly concentrated, particularly in China, which dominates key supply chains. This creates new geopolitical dependencies and makes the transition a matter of industrial and security policy.
This is not historically unprecedented. The oil crisis of the 1970s already demonstrated how dependence on specific energy sources and regions can quickly become an economic and political crisis.
In Europe, this became evident again in 2022 following Russia’s invasion of Ukraine, which exposed dependence on Russian fossil energy as both an economic and security risk. Energy became a geopolitical tool, and security of supply rose to the forefront.
Recent conflicts in the Middle East, particularly escalating tensions around Iran, have once again highlighted the vulnerability of the energy system. Iran’s strategic position near the Strait of Hormuz, through which a significant share of global oil and LNG flows, means that regional instability directly affects global energy markets.
For Europe, these effects are transmitted especially through LNG markets. As Europe reduces dependence on Russian energy, it becomes more exposed to global LNG dynamics. Disruptions in the Strait of Hormuz could tighten supply, raise prices, and intensify competition between Asia and Europe.
Thus, while Europe has reduced dependence on Russian energy, it has not escaped geopolitical risks – these dependencies have merely shifted.
In the 2020s, dependencies extend beyond fossil fuels to critical materials, components, and supply chains. The transition does not eliminate geopolitical risks but transforms them.
Our research has described the Nordic countries as “wealthy late adopters,” able to benefit from mature and cost-effective technologies without early-stage misinvestment. However, this advantage materializes only if policy is consistent and implementation effective. Otherwise, late adoption becomes a competitive disadvantage.
Comparing the 2010s and 2020s reveals a clear shift. Previously, the main barriers were technological and policy-related; today, the challenge lies in the system’s ability to implement change. Policy remains central, but in a different way.
Technology is no longer the main obstacle. The decisive question is whether permitting can be accelerated, policy made predictable, and infrastructure developed to match the new energy system. Key bottlenecks are increasingly institutional, administrative, and geopolitical.
Energy policy is always embedded in interests and institutions. Energy transition is also a transformation of meanings: what counts as “proper” energy is not just a technical or economic issue but also cultural and political.
The 2020s illustrate a situation where technological change advances rapidly, but the system follows more slowly. The energy transition remains a “wicked problem,” shaped by intertwined technological, economic, and political factors. There are no simple solutions.
The technology is ready. The critical question is whether the system can keep up. Experience from the Nordic countries shows that the pace of the energy transition depends not primarily on technology or resources, but on how consistent, predictable, and implementable energy policy is.
Author: Teresa Haukkala, Research Director, Ph.D., Sustainable Energy Business Reasearch Group, University of Oulu Kerttu Saalasti Institute
Photo: Olga Salasc
Sources:
Child, M., Haukkala, T. and Breyer, C. 2017. The Role of Solar Photovoltaics and Energy Storage Solutions in a 100% Renewable Energy System for Finland in 2050. Sustainability 9:8, 1358.
Haukkala, T. 2018. A struggle for change—The formation of a green-transition advocacy coalition in Finland. Environmental Innovation and Societal Transitions, Volume 27, June 2018, pp. 146–156.
Haukkala, T. 2015. Does the sun shine in the High North? Vested interests as a barrier to solar energy deployment in Finland. Energy Research & Social Science, Volume 6, March 2015, pp. 50–58.
Haukkala, T. 2019. The wicked problem of a low carbon energy transition. Structure, agency and framing in the multi-actor process of solar PV deployment in Finland. Aalto University School of Business, Doctoral Thesis, 65/2019.
Haukkala, T. (toim.) 2011. ”Paljon töitä – vähän päästöjä”. Tiekartta ekotehokkaaseen Suomeen. Taustamuistio valtioneuvoston ilmasto- ja energiapoliittiseen selontekoon. Eduskunnan tulevaisuusvaliokunnan julkaisuja 2/2011, Helsinki.
Haukkala, T., Holttinen, H., Kiviluoma, J., Mori, A., Penttinen, S.-L., Kilpeläinen, S., Talus, K. and Aalto, P. 2021. How can society accelerate renewable energy production? In: Aalto, P. (ed) (2021). Electrification: Accelerated Transition to Climate Neutrality. Elsevier: Academic Press.
Haukkala, T. & Kangas, H.-L. 2014. Aurinkoenergiaan tulee suhtautua vakavammin Suomessa, Opinion Piece, Aamulehti 15.12.2014
International Energy Agency (IEA) 2026. Energy Technology Perspectives.
Lempiälä, T., Apajalahti, E.-L., Haukkala, T., Lovio, R. 2019. Socio-cultural framing during the emergence of a technological field: Creating cultural resonance for solar technology, Research Policy 48 (9), 103830
Sareen, S., Inderberg, T. H. J., Lindahl, J., Haukkala, T., Nielsen, H. Ø., Rinkinen, J., & Taxt, H. 2026. Solar photovoltaics expansion in the Nordics: A wealthy latecomer perspective. Energy Sources, Part B: Economics, Planning, and Policy, 21(1).
College of Europe, The Fast and the furious: Speeding up the green transition, Energy and Climate Chair annual conference, Brussels, April 2023. Presentations and panel discussion.
Vaasa Energy Week 2026. Presentations and panel discussion.
In Kerttu Saalasti Institute's blog we write about the topics of the Institute's research groups, micro entrepreneurship education and the Institute's general topics. The authors are researchers, experts and members of networks.
Our topics are: micro entrenepreneurship, future manufacturing technologies, regional excellence, micro entrepreneurship education