The Flexible Energy Systems programme, launched by Business Finland in 2024, supports Finnish SMEs and start-ups developing innovative solutions to enhance energy system flexibility across electricity, heating, and clean fuels. It facilitates access to funding, networking, collaboration, and international visibility, helping companies transition from research to market-ready solutions. The programme engages SMEs through workshops, ecosystem-building events, and export promotion. Participating companies can apply for funding from Business Finland to access grants for research or loans for development and piloting. The initiative provides administrative and advisory support, including guidance on applications and reporting.
Business Finland – Flexible Energy Systems programme
Abstract
The Flexible Energy Systems (FES) programme was designed to help Finnish companies, particularly SMEs and start-ups, unlock funding opportunities from Business Finland and gain international visibility. It targets SMEs who are developing innovative solutions for enhancing the flexibility of energy systems in energy production and storage, industry, transport and mobility, as well as for buildings and infrastructure. Eligible SMEs must provide solutions for one of the three key areas:
Electricity: Enabling the integration of intermittent and volatile electricity production
Heat: Decarbonisation and electrification of heating and cooling systems
Fuels: Integration, utilisation and distribution of clean energy fuels
The programme is open to Finnish companies, as well as international companies which have research, development and innovation (RDI) activities based in Finland.
The programme can cover a variety of projects, including single research and development (R&D) projects, research-oriented projects, piloting, as well as collaboration initiatives between research institutions and companies.
The FES programme operates through several key mechanisms:
Publishing of data and information through studies and analyses on relevant topics such as sustainability, resilience, regulation and geopolitics, helping companies understand the needs of international markets;
Offering networking opportunities, through, for example, events which gather key stakeholders;
Conducting workshops, to generate joint R&D projects eligible for funding purposes;
Facilitating collaboration opportunities in Finland and abroad, connecting lead companies with relevant partners to create ecosystems;
Export promotion, through highlighting successful projects and solutions as reference cases, promoting them internationally, and supporting companies through facilitating trade missions.
The programme also aims to support companies in transitioning from research to market entry, with the participation of the Research Council of Finland helping bring early-stage and basic research results to companies.
As such, the programme serves as a gateway and platform for innovation, cooperation, networking and knowledge exchange. The objectives include fostering innovative R&D projects, facilitating the creation of ecosystems and the participation of Finnish companies in international value chains.
Once an SME gets admitted to the programme, the programme encourages and facilitates companies and research organisations to apply for funding from Business Finland under the ‘’flexibility’’ theme. The funding is subject to the usual financing conditions of Business Finland (i.e. there are no special conditions for green innovators). Funding for SMEs can come in two forms, depending on the market-readiness of the company:
Grant funding, primarily for research purposes, covering up to 50% of total project costs or up to 60% in the case of projects focused purely on industrial research;
Loans, for development and piloting activities, typically covering 50% of project costs, with the possibility of up to 70% in special cases.
The programme was launched in 2024 and will be ongoing for six years until 2030. The target funding goal is EUR 180 million. Since its inception, fifteen projects have been funded under the ‘’flexibility’’ theme, covering five research projects where SMEs are users of the results, eight SME-led projects and two Leading Company projects, in which global companies lead ecosystems comprising companies of various sizes. 312 companies, of which 62% are SMEs, have participated in the FES programme activities including information sharing, networking and workshopping
The programme developed in response to the evolving energy landscape, where the need for energy system flexibility has become increasingly central. In the Finnish policy context, there has also been an increasing focus on enhancing resilience, sustainability, and energy security, for which flexible energy systems are crucial. The programme is also driven by a strong business and export-oriented mandate, reflected in its strong focus on creating internationally competitive companies. Within Business Finland itself, one of its key strategic focus areas is on decarbonisation, outlined in its Zero Carbon Future mission. As such, the FES programme complements other green programmes from Business Finland, such as the Decarbonized Cities Programme, as well as the Hydrogen & Batteries Programme.
The programme still faces a number of challenges including:
Challenges in outreach: Visibility among SMEs and start-ups is partially limited due to the flood of competing information in the sector. Industry associations and other stakeholders are leveraged to support outreach, but the programme may still not reach all potential participants.
The capital-intensive nature of the energy sector: The capital-intensive nature of the sector poses structural challenges for SMEs, as funding eligibility typically requires companies to have an established turnover and a degree of financial stability. As Business Finland assumes project risk only, SMEs and start-ups must demonstrate sufficient financial maturity to qualify, which can exclude younger and less mature firms.
Providing a supportive ecosystem: SMEs are engaged through outreach methods such as networking events. Leveraging its extensive network and the large number of stakeholders attending its events, FES is able to reach a significant number of companies and create valuable opportunities for collaboration. SMEs can also benefit from direct administrative support from Business Finland in preparing their application, as well from advisory services for preparing their mandatory report following project completion.
Offering flexibility during the application process: Companies can gain feedback on their application and giving them the option to submit additional missing information after initial submission. Furthermore, if an application is found to be ineligible for a grant but the project itself is considered strong, there is opportunity to transform the application into a loan request instead.
Incentivising SME participation: Whilst the programme is open to companies of all sizes, particular emphasis is placed on encouraging SMEs and start-ups to participate, through offering higher co-financing rates than to larger enterprises, and requiring large enterprises who wish to obtain a grant to subcontract SMEs.
Reputable name of the institution: Its broad network amongst Finnish companies enables the programme to significantly widen its reach.
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