27.10.2025
The Finnish company Cactos is a pioneer in the field of smart energy storage. The company develops, manufactures, and leases intelligent energy storage systems that stabilize the power grid, smooth peak loads, and accelerate the adoption of renewable energy. Founded in 2021, Cactos already employs over 100 professionals in offices in Helsinki, Kempele, and Amsterdam, providing innovative solutions for a sustainable energy future.
Cactos is a member of the Ukrainian professional energy business community, Energy Club, which strives to attract the best global experience and advanced technologies. This particularly applies to addressing one of the most acute challenges facing Ukrainian energy today—the need for modern and effective Battery Energy Storage Systems (BESS). For Ukraine, Cactos’s expertise is invaluable, as we need not just “batteries,” but comprehensive, smart solutions that can be quickly deployed and effectively integrated into our damaged grid.
In the Energy Club’s special media project ‘The Big Interview,’ Cactos CEO Oskari Jaakkola spoke with host and journalist Andriy Kulykov about the unique “BESS-as-a-Service” model, the Cactos Spine AI platform, and the ideological motivation for working in Ukraine. He also explained why the Ukrainian BESS market will become one of the largest in the world after the victory.
Andriy Kulykov: Today, I’m particularly excited to welcome the representative from our newest member, the Finnish pioneer in smart energy storage, Cactos. Joining me is the company’s founder, Oskari Jaakkola, who is the Chief Executive Officer. Cactos, which also manages the first pure play battery energy storage investment fund in Finland, is a rather unique Operation. Oskari. It’s a pleasure to have you with us.
Oskari Jaakkola: Thank you very much, Andriy. It’s a pleasure to be here. Ukraine is close to our heart and obviously very excited to be speaking with you today.
Andriy Kulykov: Well, I must say that we never forget about the tribulations that Finland has come through. And the Winter War and the history of your heroic resistance is one of the factors that inspires us, telling us that even after severe wars, if there is national unity, you can achieve quite a lot.
Oskari, perhaps you could start us off. Cactos was founded in 2021 and within this short span of time has grown incredibly fast. What was the core problem in the energy market that you and your team set out to solve?
Oskari Jaakkola: Firstly, the energy landscape and energy consumption globally are undergoing a very dramatic change at the moment. Global energy consumption altogether is growing at a rate of roughly 2.5% per annum. But the consumption of electricity is growing at double the speed, so more and more energy is being consumed as electricity. We see this in day-to-day lives with more electric vehicles, both passenger cars and public transport, as well as heavy transport appearing now. Also, industrial electrification is driving the increase in electricity demand.
However, at the same time, there is a big change ongoing in electricity generation. More and more electricity is being generated by renewable means, which means that electricity generation is increasingly dependent on weather. Sometimes there’s a lot of wind or sun, sometimes not so much. On the other side of the coin is varying consumption: sometimes cars are charging, sometimes they’re not. It’s becoming increasingly difficult to manage the electrical balance.
Electrical balance is a key feature in the electrical system. An electrical system always needs to have equal amounts of electricity generation and consumption. If there is an imbalance, in the extreme scenario, there will be a major fault in the system, such as the big blackout we saw in Spain at the beginning of the summer. This increasing volatility in balance has caused significant price volatility in electricity markets. The price mechanism of supply and demand tries to shift consumption to periods when there is adequate generation.
In most countries in Europe, price volatility in electricity has grown tremendously over the past years. We saw this in Finland when we started back in 2021, which was before the war in Ukraine. It was already visible. We were seeing negative prices and very high electricity prices. We wanted to provide a technical solution to balance supply and demand, and obviously, batteries are a good technical way of doing it.
Then, once Russia attacked Ukraine, it had a further effect, accelerating the volatility in the electrical markets. Russia was supplying electricity to Europe, which was suddenly cut off because most countries in Europe decided not to cooperate with Russia anymore, and so did Finland. Finland ceased importing Russian electricity as well as Russian balancing power, which further increased the volatility in our electrical system, making our batteries even more important.
Now, that’s the technical background of the problem. What we set out to do is to offer our clients the easiest possible solution for, firstly, hedging against electricity market risk so that our clients aren’t forced to use electricity when it’s at its most expensive. Secondly, providing a possibility to participate in the electrical markets to generate revenue, for instance, from balancing services. And thirdly, we wanted to improve the availability of electricity. We do this in two ways. Firstly, we enable our clients to use electricity at a higher power than what would be available from their electrical connection, such as in EV charging. If they have a limited connection, they can still supplement the power with the battery. Secondly, by providing reserve power, as we are doing in Ukraine, our batteries supply uninterrupted power whenever there’s a blackout on the grid side.
Andriy Kulykov: Oskari… “to improve” is probably the key word, since the slogan of Cactos is “energy but better.” What do you exactly mean? What is “better than energy”? Or what is “better energy”?
Oskari Jaakkola: “Energy but better.” Better energy than regular energy comes from the third point of what we offer. Our electricity is not limited in power by the grid connection size. The battery can boost the power available from the connection, for instance, powering an industrial piece of equipment at significantly higher power momentarily than the connection allows. Secondly, our electricity is better because it doesn’t run out. If there’s a blackout, the battery will still support the facility for a given period.
Andriy Kulykov: The business model of Cactos is rather unique. You’re not just a manufacturer; you’re a vertically integrated provider offering everything from hardware to financing, notably through your specialized fund, Cactos Fleet Finland. Why is this comprehensive “storage-as-a-service” model, backed by your own fund, more powerful for your clients than the traditional approach of simply selling equipment?
Oskari Jaakkola: Yes. We wanted to offer an easy solution. For most of our clients, who are mainly industrial companies, their core business is not managing batteries or running battery projects. Their business is manufacturing something, transporting goods, or whatever it may be. So, we wanted to offer a solution where they don’t need to worry about project integration, development, and especially financing. We chose to do almost everything ourselves.
We manufacture equipment, starting from battery modules. We assemble energy storage systems, install, commission, operate, maintain, trade, and finance. All the software—both the automation and the server-side trading software—is developed in-house.
Regarding financing, why was it relevant? Batteries as an investment are of a somewhat obscure size. They’re too small for typical project financing deals with banks, which usually require a minimum size of about €1 million per project. Yet, battery investments are often too large for balance sheet financing; companies typically don’t have that kind of capital readily available to invest freely in a battery.
So, without a ready-made financing solution, the client’s procurement and investment process gets slowed down by discussions with potential financiers. These financiers are often not the regular banks; perhaps a leasing house lacking the technical expertise to understand the investment, which prolongs delivery and project throughput times. We wanted a solution we could offer readily to accelerate the client’s procurement process and decision-making ability.
So, we created a fund. Why a fund and not, for instance, a Special Purpose Vehicle (SPV)? Some peers in other industries finance assets through limited liability corporations that own the assets, with shareholders financing the SPV. We didn’t like the idea of potentially losing control of the entity. An investment fund allows us, as the fund manager, to maintain control regardless of how much capital we contributed.
It’s a convenient structure in many ways. Of course, running a fund creates administrative burdens: reporting to financial oversight authorities, adhering to strict anti-money laundering and counter-terrorism financing rules. There are procedural and reporting requirements. But overall, it enables us to achieve a very attractive cost of capital for our clients while maintaining long-term control.
Andriy Kulykov: I see feasibility features strongly in your calculations and plans, as does inventiveness. This applies not only to your methods but also to naming conventions. Some names stick in my mind because I haven’t encountered anything similar, like Cactos Spine. Let’s talk about this “brain” of your system. It’s an AI-driven approach. How does it create more value than a standard battery system?
Oskari Jaakkola: Cactos Spine is our name for the overarching control and trading system for our fleet of batteries. All our batteries are connected to the internet and Cactos Spine. In real-time, Cactos Spine transmits operational parameters to the systems—what they should do, how much to charge or discharge at any given time. It also receives telemetry information about each battery’s status—cell temperatures, voltages, power demand of the surrounding building, etc.
This provides our operations team with the necessary information to ensure our batteries operate safely and efficiently. Cactos Spine also handles trading automatically. We trade the batteries in multiple electricity markets: wholesale markets (day-ahead and intraday) and ancillary services markets (frequency containment or balancing markets) of a given country.
A key function of Spine is optimization. It automatically finds the optimal combination of different markets to maximize client earnings. For example, it might charge cheap electricity at night via a day-ahead trade, then use that energy to participate in AFRR markets in the morning, and later be in frequency containment reserve markets. A single battery can perform one or multiple tasks simultaneously.
Market operations are very complex, requiring extensive calculations and are nearly impossible for a human to manage these days. Most European countries have transitioned to a 15-minute balancing interval, meaning each 15-minute slot is a distinct balancing period. With 4 x 24 = 96 periods a day, it’s not feasible for a human to manually send bids, receive confirmations, and activate the resources. Computational software like Spine is essential to manage the entire operation.
Regarding the name “Spine,” it’s quite clever. A marketing colleague came up with it. “Spine” refers both to the human spine—it truly is the backbone of our system—and the spike on a cactus. A fun coincidence.
Andriy Kulykov: I see a good example of Cactos’s thinking: using optimization, traditionally linked to reduction, actually leads to maximizing client earnings. Very interesting. Thank you.
Oskari, founder and CEO of the Finnish company Cactos, is our guest in The Big Interview on the Energy Club platform. From what I hear from you and many experts, your systems help clients become more resilient and efficient by offering smart functions like managing peak demand, optimizing energy costs, and providing backup power. Could you share a real-world scenario of how an industrial facility leverages the Cactos system to achieve these goals?
Oskari Jaakkola: A very good example is our client in southern Sweden called VBox, a large chemical logistics company. They sell chemicals, operate terminals where ships deliver chemicals, and distribute them using very large trucks. VBox is electrifying its truck fleet, meaning the trucks run on electricity instead of gasoline or diesel.
In southern Sweden, there are significant challenges with grid constraints—inadequate electricity distribution infrastructure makes getting a large connection difficult. For trucks, high charging power is crucial because utilization rate directly impacts profitability. Ideally, an electric truck should charge during the driver’s statutory break, requiring very high power.
Specifically, VBox needed over 400 kW of charging power. However, the grid company could only provide a 100 kW connection, leaving them with a 300 kW shortfall. We supplied them with an energy storage system that charges slowly at 100 kW. When a truck arrives for charging, the system discharges slightly over 300 kW, allowing VBox to charge the truck at over 400 kW, while the grid only sees a 100 kW load. When not supporting charging, the system participates in electricity markets, on average covering its cost for the client.
This exemplifies how batteries enable business activities and faster project delivery times, related not to the battery itself but to the client’s core operations.
Andriy Kulykov: Can we say that the Cactos energy storage system helps solve the bottleneck of slower charging stations and essentially boosts the power available on-site when most needed?
Oskari Jaakkola: Exactly. That’s perhaps the biggest driver for our clients in many markets. Grid investments and building electrical distribution systems are very slow processes. Typically, new underground cabling, transformer stations, and switchgear are needed, with delivery times often spanning multiple years. Our battery delivery time is usually between one and four months, enabling clients to move faster with their desired business activities.
Andriy Kulykov: Let’s return to Ukraine, which you mentioned in your opening statement. You referred to the problems Europe began experiencing after Russia’s full-scale invasion. Your systems can create independent microgrids and provide backup power when the main grid fails. Considering Ukraine’s challenges, could you explain how a network of these distributed units could enhance the resilience of critical infrastructure on a larger scale during an emergency?
Oskari Jaakkola: Yes. Firstly, regarding how we ended up supplying systems to Ukraine. Everything has ideological and business reasons. Cactos’s entry into Ukraine was predominantly ideology-driven. We share the same neighbor as Ukraine and have hundreds of years of experience being Russia’s neighbor. In Finland, as you mentioned the Winter War and our violent history with our neighbor, it’s deeply ingrained in the national psyche to help our brothers facing similar situations as our country did long ago.
We wanted to help Ukraine. Since we provide resilient energy storage systems, it was straightforward using our own products. Our systems can operate in island mode, meaning we can connect them to a building, for instance. When the grid operates normally, the battery can participate in markets, provide peak shaving, and charge locally generated renewable energy. During a blackout, our system automatically disconnects the building from the grid and starts supplying power. It also enables associated systems like solar inverters to synchronize with our battery’s frequency and continue local generation. Combining our battery with a solar PV system significantly extends a location’s independence.
How do they help an electrical system under attack, like in Ukraine? Firstly, a distributed system provides frequency response when connected to the grid. If there’s a local disturbance, say an attack on a substation causing production or consumption loss, the connected distributed systems help balance the load by charging or discharging to push the grid frequency back towards 50 Hz. This prevents the Distribution System Operator (DSO) from needing to disconnect more loads or production to avoid a cascading failure.
Locally, in an area experiencing a blackout, it provides backup power. A distributed system is inherently more resilient because there are fewer geographically co-located points of failure. Unlike a centralized system (large battery or production facility), where disconnection or destruction means total power loss, a distributed system is geographically spread, making it very difficult to destroy entirely or render non-functional.
Andriy Kulykov: Oskari, when discussing clients and grids, you mentioned buildings. Can Cactos operate on a larger scale? For instance, how could this capability support a huge grid operator like Ukrenergo in Ukraine?
Oskari Jaakkola: Yes. Firstly, the distributed system also operates collectively as a large virtual battery. Comparing to Finland, our biggest market currently (though we’re expanding elsewhere), the existing system we have here is one of the largest battery energy storage systems in the country. We have both large and small units, but they all operate together as a virtual power plant, providing frequency response to the grid operator simultaneously. In Finland, we provide almost 20% of all grid balancing.
Some systems are big, some small. Our smallest are 130 kWh, largest in the tens of MWh, but they all work together. Even if a larger system is temporarily unavailable, the remaining small systems collectively provide substantial power. Practically, Cactos can deliver systems ranging from 130 kWh to roughly 50 MWh. Within this range, we can supply a system. The average system size has been growing. Initially, a typical industrial client size was around 200 kWh. Today, our industrial clients need more power and capacity, so the average size is now between 1 and 2 MWh—nearly a tenfold increase in less than four years, partly driven by cost reduction.
Andriy Kulykov: Oskari. We Ukrainians deeply appreciate and are well aware of the attitude Finns display towards Ukraine, not just feel, and the help we receive from Finland. However, founded in 2021, Cactos was very young when the full-scale war began. Besides the ideological or, perhaps, philosophical attitude you mentioned, you had to weigh the risks and opportunities of entering Ukraine. Cactos has already supplied systems here. What are the biggest opportunities and challenges you see in the Ukrainian market today?
Oskari Jaakkola: Indeed. When we decided to support Ukraine, we did receive some support from the Finnish government, but only post-hoc; the actual funds haven’t arrived yet. So, we financed the systems delivered to Ukraine ourselves. Although we’ve grown significantly since then, making the investment relatively smaller now, at the time we made the decision and spent the money, it was close to 10% of our revenue. It was a major decision, but we felt it was crucial. Firstly, as I said, we wanted to help Ukraine. We strongly believe Russia must lose the war, and Europeans should do everything possible to make that happen.
Looking beyond the war: Ukraine’s electricity system has unfortunately suffered greatly. Our analysis indicated that 80% of baseload generation was damaged or destroyed. The old system desperately needs renewal. Based on discussions with Ukrainian counterparts, we believe the new system will largely rely on renewables. Even during the war, we see wind and solar investments. Ukraine has excellent potential for both. Renewable generation allows for very competitively priced electricity.
However, the flip side is it requires significant balancing. We see this in Finland too. Proportionately, Finland is one of Europe’s largest wind power generators. Our average electricity price is below $0.04/kWh, yet we experience extreme price swings. For instance, yesterday, the lowest price was near zero, the highest $0.80/kWh – a massive spread. Frequency variations in the Nordic synchronous area are also much larger than in Central Europe because Nordic countries have proportionately more weather-dependent renewable generation compared to Central Europe (supported by France’s massive nuclear plants and Eastern European baseload generation).
As this balance shifts in Ukraine, there will be a substantial need for balancing power. We foresee that post-war, Ukraine will be one of the world’s largest markets for energy storage. Significant investment in batteries will be required to support the new generation systems. Industrial electrification will also increase in Ukraine as electricity prices fall due to renewable investments. There will be more industrial electrical machinery and electric transport, further boosting the need for batteries. So, to answer your question: currently, during the war, support is ideological and politically driven by common goals. After the war, there’s a very serious business case for being in Ukraine.
Andriy Kulykov: Thank you for being not only helpful but also honest. Gaining a clear perspective is vital for us, and your outlook on our future is one of the drivers to continue fighting. But speaking of Ukraine as a potentially large market, do you think it’s sufficiently regulated, or do adjustments need to be made, especially concerning potential foreign participation?
Oskari Jaakkola: Ukraine is currently at war, which necessitates a different regulatory and market environment to ensure resilience during crisis.
More generally, regarding market reforms that encourage investment in renewables and storage (leading to lower prices and better availability long-term): Firstly, transparency and accessibility of both wholesale electricity and ancillary services markets are crucial. There must be a transparent way for participants to trade electricity on a multilateral marketplace. This requires having a day-ahead and intraday market available on a multilateral exchange. For auxiliary/balancing services, ideally, it should be a transparent market where participants meeting technical and financial criteria can participate with various assets, provided they meet the Transmission System Operator’s requirements.
Looking at Finland’s development over 25 years (I’m on Finland’s Electricity Market Board, discussing future market developments here in the Nordics): Finland transitioned over a long period from heavily regulated, state-owned utilities to separating utilities from distribution operators and creating an open electricity marketplace. This lowered the average electricity price by around 90%, so end consumers pay less. However, volatility has increased, as mentioned. Sometimes momentary high prices reported in newspapers create political pressure for heavier regulation, despite lower average prices. This is politically challenging. But heavier regulation hinders long-term investment because it discourages it.
Companies investing in generation and storage need long-term, stable, predictable policy development. Constant regulatory swings make long-term investment planning very difficult. To summarize: key factors encouraging energy system investment are long-term stable policies consistent across governments, transparent and accessible fair markets allowing qualified participation, and thirdly, a generally favorable political environment for overall business investment, not just specific to electricity markets.
Andriy Kulykov: Since we’ve delved into the future, what do you see as the next major innovation in the energy storage sector?
Oskari Jaakkola: In the energy storage sector, the focus is often on battery cells and the technical devices themselves. I think it’s more interesting to discuss what they enable. The major challenge in European electricity markets now is the high cost of imbalance. Traditionally, companies forecasted consumption using standard curves based on time of day, temperature, etc. This worked when generation and demand were stable, and the balancing interval was one hour.
We’ve now moved to a 15-minute interval with much more unpredictable consumption and generation, leading to greater imbalance, which has become extremely expensive. We see imbalance costs of €10,000/MWh. A small electricity company could be wiped out in 15 minutes by a large imbalance at that price.
Energy storage units enable real-time imbalance management. With real-time data from our BESS, we can manage our balance, firstly through markets, but crucially, using the batteries to eliminate imbalance. Recently, Cactos started selling electricity directly to clients. We can offer the cheapest electricity in Finland because we don’t need to worry about imbalance costs; we use batteries to eliminate them.
So, I think a key commercial innovation will be batteries becoming less like standalone market participants and more part of a comprehensive solution for supplying competitively priced, affordable electricity.
On the technology side: the dominance of LFP (Lithium Iron Phosphate) cells will likely continue for the foreseeable future. Introducing new cell technologies like solid-state or salt batteries is a volume game. It will take years for a new technology to reach LFP’s manufacturing scale. So, we’ll likely be increasingly using LFP for years before a more competitive technology overtakes it.
Andriy Kulykov: And finally, what is your key message to Ukrainian energy companies considering investing in energy storage solutions today?
Oskari Jaakkola: We would certainly be very willing to help. In general, I think it’s worthwhile considering all the possibilities batteries offer. It’s not just about participating in markets, which typically favors large, centralized systems potentially offering economies of scale.
There are also local, geographical benefits to batteries, such as de-bottlenecking grids, managing electricity distribution, and improving power quality by managing voltage and reactive power. So, instead of opting solely for large, centralized grid-scale batteries, it might be worthwhile to encourage large electricity consumers to install their own batteries and then perhaps procure services from these distributed assets. This shifts the investment burden from utilities themselves; they can buy services from batteries installed directly at consumption points. The added benefit is increased resilience due to local reserve power from the battery.
Andriy Kulykov: Thank you very much. This was The Big Interview with Oskari Jaakkola, founder and Chief Executive Officer of Cactos, a pioneering Finnish company. Thank you very much.
