Finland’s new 250MWh sand battery shows how cheap materials plus smart controls can slash heating emissions, stabilise grids, and create new revenue for utilities.
Most utilities still burn gas every winter because they don’t have a better long-duration heat storage option. Finland just decided that excuse isn’t good enough.
Lahti Energia and Polar Night Energy are building a 250MWh “sand battery” that will store renewable electricity as heat for 125 hours and feed both district heating and grid balancing. It’s not a pilot, it’s not a lab demo — it’s a commercial asset scheduled to come online in 2027.
This matters because heat is the elephant in the room of decarbonisation. Roughly half of global final energy demand is for heat, not power, and most of that still comes from fossil fuels. A sand battery is a very pragmatic way to attack that problem using cheap materials, smart controls, and today’s technology.
In this post, part of our Green Technology series, I’ll walk through what this Finnish project is actually doing, why sand batteries are getting so much attention, and how AI, smart grids and business models turn this from a quirky idea into a serious asset class.
What exactly is a sand battery — and why should you care?
A sand battery is a type of thermal energy storage (TES) system that uses sand or similar granular material as the storage medium. The system:
- Uses electricity (ideally cheap solar, wind, or grid surplus) to heat sand in an insulated container to high temperatures.
- Stores that heat for hours or days with relatively low losses.
- Extracts the heat later via air or fluid loops for district heating or industrial processes.
In the Lahti Energia project in Vääksy, Finland:
- Thermal capacity: 250MWh
- Heating power: 2MW
- Storage duration: 125 hours (a bit over 5 days)
- Storage medium: Locally available natural sand
- Tank size: ~14m high, 15m wide
- Commissioning target: Summer 2027
The scale is big enough that the asset won’t just heat buildings:
- It will decouple heat production from electricity prices, allowing the utility to buy or use power when it’s cheap and store it as heat.
- It’s also sized to participate in Fingrid’s reserve and grid balancing markets, turning a heat asset into an ancillary services provider.
Here’s the thing about sand-based thermal storage: it’s not glamorous, but it’s cheap, durable, and scalable. You don’t need rare minerals, exotic chemistry, or complex recycling. You need sand, steel, insulation — and increasingly, good software.
Inside the Finland 250MWh sand battery project
The Vääksy project is a strong signal of where green technology is heading: multi-service assets that cut emissions and earn revenue across multiple markets.
Project snapshot
Key facts about the Lahti Energia / Polar Night Energy installation:
- Location: Vääksy, Finland
- Partners: Lahti Energia (utility) and Polar Night Energy (technology provider)
- Use case: District heating + ancillary services
- Emissions impact: ~60% annual cut in fossil-based emissions for the Vääksy district heating network
- Fuel displacement:
- ~80% reduction in natural gas use
- Decrease in wood chip consumption
- Support: Grant funding from Business Finland
- Role: Polar Night Energy is main contractor; on-site construction begins early 2026
Lahti Energia’s CEO, Jouni Haikarainen, summed up their strategy clearly:
“We want to offer our customers affordable district heating and make use of renewable energy in our heat production… As the share of weather-dependent energy grows in the grid, the Sand Battery will contribute to balancing electricity supply and demand.”
So this isn’t a nice-to-have sustainability project. It’s a cost and flexibility play anchored firmly in the real-world economics of a municipal utility.
Building on a proven concept
Polar Night Energy already has a 1MW / 100MWh sand battery in commercial operation with another Finnish utility. That system uses soapstone, a ceramic byproduct, as its storage medium. The new Vääksy project scales the same concept 2.5x in energy capacity and switches to local natural sand to keep costs and logistics simple.
From a risk perspective, that’s exactly how green technology should scale: start with a smaller, real-world system, prove performance and controls, then increase size and complexity.
Why sand beats lithium-ion for long-duration heat
Lithium-ion batteries are fantastic for fast, short-duration electricity storage — think minutes to a few hours. They’re terrible for storing large amounts of low-cost heat for days.
For long-duration heat storage, sand batteries tick several boxes:
- Cost per kWh (thermal) is far lower than electrochemical batteries, because the main materials (sand, steel, insulation) are commodity products.
- Lifetime is measured in decades with minimal performance degradation; there’s no cycle-limited chemistry at risk.
- Safety is simpler: no flammable electrolytes, much lower risk of thermal runaway, and straightforward fire management.
- Sustainability benefits from abundant materials and simpler end-of-life handling.
Technically, sand batteries are particularly strong in three scenarios:
- District heating – storing cheap or surplus renewable electricity as heat and releasing it when demand peaks.
- Industrial process heat – replacing gas or oil boilers for processes up to several hundred degrees Celsius.
- Grid balancing – acting as a flexible electric load when charging, and releasing value indirectly by freeing other electricity resources.
For a Nordic winter, where heat demand can spike for days while wind and solar fluctuate, 125 hours of storage is extremely valuable. You smooth the peaks without continually firing up gas boilers.
The reality? This setup turns volatile power markets into a feature, not a bug.
Where AI fits: smarter dispatch, cheaper heat, cleaner grids
Because this blog series focuses on AI-powered green technology, let’s talk about where intelligence turns a sand battery from a static asset into a strategic one.
1. Forecasting and optimal charging
To maximise value, you want to charge the sand battery when:
- Electricity prices are low (or even negative)
- Renewable generation is abundant
- Heat demand is likely to be high in the near future
AI models can forecast:
- Day-ahead and intra-day power prices
- Wind and solar output in the region
- Heat demand for the district network (based on weather, occupancy, historical patterns)
A good optimisation engine will then decide:
- How fast to charge the sand
- What minimum state-of-charge to maintain for reliability
- When to hold back capacity for ancillary services markets
This is where many utilities either win or lose. A technically sound asset with poor dispatch logic will leave 20–40% of its potential value on the table.
2. Bidding into ancillary services markets
Lahti Energia’s sand battery will participate in Fingrid’s reserve and balancing markets. That means the system operator will see it as a controllable load and potentially a flexible resource.
AI-powered trading and bidding platforms can:
- Evaluate which products (frequency containment, reserves, balancing energy) are most profitable hour by hour
- Factor in heat demand obligations and state-of-charge constraints
- Automate bids and updates in near real time
For owners and investors, this is crucial: revenue stacking (heat sales + grid services) is what makes assets like this bankable at scale.
3. Operations, maintenance, and lifetime optimisation
Even though sand batteries are mechanically simpler than electrochemical systems, they still benefit from:
- Condition monitoring on insulation, fans, heaters, and ducting
- Thermal profiling to detect hotspots or uneven heat distribution
- Predictive maintenance scheduling to avoid peak-season downtime
Machine learning models can detect anomalies earlier and optimise maintenance windows around both heat demand and market price signals.
What this means for utilities, cities, and industrial players
If you’re running a utility, a city energy company, or an industrial site, the Finnish project isn’t just interesting news — it’s a template.
For district heating operators
Sand batteries can:
- Cut fossil fuel use by using electric heaters to replace or backup gas boilers
- Stabilise tariffs by reducing exposure to spot gas prices
- Future-proof networks as more renewable electricity floods the grid
Practically, a district heating company can:
- Start with modular thermal storage alongside existing boilers
- Use AI-based controllers to charge during low-price windows
- Incrementally scale storage as older fossil assets retire
For industrial energy users
Many industries (food, paper, chemicals, textiles) need steady, high-temperature heat but suffer from price volatility.
A sand battery paired with smart controls can:
- Shift heat generation to off-peak power hours
- Combine with on-site solar or PPAs
- Cut CO₂ emissions while improving cost predictability
I’ve seen that projects gain traction fastest when they’re framed not as “green upgrades” but as risk management tools against energy price spikes and carbon costs.
For investors and policymakers
This Finnish project is also a signal for capital and regulation:
- Investors get a real-world reference for long-duration thermal storage with multiple revenue streams.
- Policymakers see how grant funding (like Business Finland’s support) can de-risk early commercial deployments and build local expertise.
If you’re designing decarbonisation roadmaps, it’s time to stop thinking only in terms of lithium-ion and hydrogen. Thermal storage, including sand batteries, deserves a line item.
How to assess if sand batteries belong in your decarbonisation plan
Deciding whether sand-based thermal storage fits your strategy comes down to a few practical questions.
Ask yourself:
-
Do you have significant, predictable heat demand?
- District heating networks
- Industrial process heat
- Large campuses or hospitals
-
Is your electricity mix becoming more renewable and volatile?
- High shares of wind and solar
- Frequent negative or very low power prices
-
Are you exposed to gas or biomass price volatility?
- Heavy reliance on imported gas
- Tight or expensive biomass markets
-
Can you participate in grid services markets?
- Regulatory framework for demand response and reserves
- Ability to measure and control loads accurately
If you tick at least three of these, sand-based thermal storage is worth serious technical and financial modelling.
A typical early-stage roadmap looks like this:
- Feasibility study: Heat load analysis, grid price modelling, CO₂ reduction potential.
- Techno-economic model: CAPEX/OPEX, payback, internal rate of return (IRR), sensitivity to fuel and carbon prices.
- Control strategy design: Where AI and optimisation software come in — this is often where partners add the most value.
- Pilot or modular deployment: Start with a smaller unit, collect operational data, then scale.
Where sand batteries fit in the bigger Green Technology picture
Zooming out, the Finnish 250MWh sand battery is part of a broader pattern we’ve been tracking in this Green Technology series:
- More storage is shifting from “pure electricity” to hybrid models — heat + power, mobility + grid services, etc.
- AI is becoming the central nervous system for these assets, deciding when to charge, when to discharge, and which market to serve.
- Materials and designs are getting simpler, not more exotic, to scale fast and avoid supply-chain bottlenecks.
The reality is that decarbonisation won’t be solved by a single miracle battery chemistry. It’ll come from a mix of pragmatic, locally optimised technologies like this sand battery in Vääksy, stitched together by data and intelligent software.
If your organisation is serious about reducing emissions while protecting margins, projects like Lahti Energia’s aren’t just nice headlines — they’re early blueprints. The winners over the next decade will be the ones who treat green technology as an integrated system: cheap materials on the ground, smart algorithms in the cloud, and business models that connect both to real customer value.
And that’s the opportunity: turning piles of sand into flexible, AI-optimised infrastructure that keeps people warm, grids stable, and fossil fuels in the ground.