Interactive EurObserv’ER Database - Country policy schemes

PV Policy in Finland

General
The objective of the Finnish National Climate and Energy Strategy (2005) is that consumption of renewable energy should grow by at least one-fourth by the year 2015 and by at least 40% by 2025 such that renewable energy accounts for almost one-third of primary energy by 2025. The use of forestry chips, energy crop-derived biomass, biogas and smallscale wood facilities should increase by approximately 65% by 2015 and by about 80% by 2025 as compared to 2003. In 2010, renewable electricity should account for 31.5% of total Finnish power consumption. Biofuels should account for 5.75% of road transport fuels in 2010.

Taxation of fossil fuels is in place as of 1990. The fuels have a tax which is based on the carbon content. In the beginning of 2008, levels of tax have been increased slightly. Fossil Fuels used for electricity generation are not taxed, but an electricity tax is imposed on the consumption of electricity. In CHP, fuels used for heat generation are calculated by the amount of heat produced. Tax rates differ for industry and for private consumers.

According to the Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources the target for the share of energy from renewable sources in gross final consumption of energy in the year 2020 for Finland is 38% (in the year 2005 the share was 28.5%). The Directive has a mandatory 10 % target for transport to be achieved by all Member States, which refers to renewable sources as a whole, not biofuels alone.

Renewable Energy policies and regulation

In November 2008, the Government has approved a new, ambitious climate and energy strategy for Finland, with detailed insights into climate and energy policy measures up to 2020, and suggestions up to 2050. The goal is to increase the share of renewable energy to 38 per cent by 2020, in line with the obligation proposed for Finland by the EU Commission. In order to stimulate a shift to renewable energy usage, the current support and steering systems will be intensified and structures changed. Meeting the obligation would require an intense increase in the use of wood-based energy, waste fuels, heat pumps, biogas and wind energy.

On 29 September 2009, a working group submitted a proposal to the Minister of Economic Affairs on the introduction of feed-in tariffs for electricity produced using wind power and biogas. The law was adopted in parliament in December 2010. The level of feed-in tariffs: for wind – 83,5 EUR/MWh, for biogas – 50 EUR/MWh. The feed-in tariff will be paid for 12 years. There is a kick-off bonus for those projects that will start producing energy during the first two years after the beginning of the law. The level of the kick-off-tariff is 105,30 €/MWh for 3 years. After three years the project will receive the regular tariff level for 9 years. Technologies eligible for feed-in tariffs: wind power plant capacity at least 1 MW, biogas PP capacity at least 300 kW. The feed-in tariff would be financed from a fee collected directly from electricity end-users.

Renewable energy projections according to the National Renewable Energy Action Plan for Finland
The National Renewable Energy Action Plan (NREAP) for Finland was submitted in July 2010. The target according to Annex I of Directive 2009/28/EC is 38% for the year 2020 and the projected NREAP share in that year exactly matches the target. According to the projection, the most important contribution in the year 2020 is expected from biomass (renewable heating and cooling) (6610 ktoe, 62% of all renewable energy). Second important contribution is expected from hydropower (14.4 TWh or 1239 ktoe, 12% of all renewable energy). The third largest contribution is from biomass (renewable electricity) (12.9 TWh or 1110 ktoe, 10% of all renewable energy). Wind power contributes with 2.5 GW (6.1 TWh). For solar photovoltaic the 2020 contribution is projected to be 10 MW. For solar thermal the 2020 contribution is projected to be 0 ktoe. The two most important biofuels are projected to contribute 430 ktoe (biodiesel) and 130 ktoe (bioethanol / bio-ETBE) by 2020. The renewable electricity production from solid biomass amounts to 7.9 TWh (676 ktoe) and for biogas it is expected to be 0.3 TWh (23 ktoe). The consumption of renewable heat is expected to amount to 3940 ktoe for solid biomass and 60 ktoe for biogas.

Renewable Electricity: photovoltaic energy (PV)
Subsidies are granted for energy investments and development projects on energy. The Council of State’s new decision (625/2002, EUVL C37/2001/) sets a maximum percentage of 40% for solar energy (among which PV) for companies.
For renewable electricity generators a support exists, funded from the electricity tax on consumers. All technologies used in the generation of RES-E are eligible, except photovoltaic systems, large-scale hydropower stations, geothermal systems and systems for the generation of electricity from peat. The amount of tax support depends on the technology used: 0.69 eurocents per kWh for electricity produced from forest chips and wind power, 0.25 eurocents per kWh for electricity produced from recycled fuels and 0.42 eurocents per kWh tax support for electricity produced from small hydropower plants and biomass systems.

The duration of this instrument is not set, and is therefore theoretically unlimited. The support instrument is not periodically revised. It was implemented in 1996 and applied since 1997 and was revised in 2007 when the available budget was reduced. There is an annual cap on the available budget; 50 million EUR per year before 2007, 10 million EUR per year since 2007.

Projects involving innovative technology have the priority when energy support is granted. Investment grants are targeted towards companies and communities, not for private persons or state organisations.

The Finnish Funding Agency for Technology and Innovation (Tekes) is the main public financer of technology R&D. Renewable energy technologies are in the strategic focus of Tekes. The total funding for renewable energy and climate change technology has been € 60–70 million annually. The share dedicated to PV is not available. Various national technology programmes and projects have involved RES technologies, however the main focus being on bioenergy.

Future programme changes expected
No changes expected.

Sources
IEA, Energy Policies of IEA Countries, Finland 2007 Review, OECD/IEA, 2008

Finnish Funding Agency for Technology and Innovation, www.tekes.fi (sourced August 2008)

Jussi Heinimö: IEA Bioenergy Task 40 “Sustainable International Bioenergy Trade: Se-curing supply and demand” Country report of Finland 2008, Lappeenranta University of Technology, Department of Energy and Environmental Technology, Research Report EN-A 57, ISBN 978-952-214-613-7, August 2008

Ministry of Employment and the Economy, www.tem.fi (sourced August 2008)

Motiva Oy, www.motiva.fi (sourced August 2008)

The Finnish Wind Power Association, “Suomen Tuulivoimayhdistys ry” (sourced Marts 2011)

Bioenergy 2009, Sustainable bioenergy business: http://www.bioenergy2009.finbioenergy.fi

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (Entry into force on June 25th, 2009), download from http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009L0028:EN:NOT

Renewable energy policy; country profiles (Re-Shaping). Based on information available in October 2009, http://www.reshaping-res-policy.eu, 2009

The National Renewable Energy Action Plans (NREAPs) are all published on the Transparency Platform on Renewable Energy: http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm (sourced July - December 2010)

Renewable Energy Projections as Published in the National Renewable Energy Action Plans of the European Member States, http://www.ecn.nl/nreap (sourced December 2010)

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Last update: March 2011

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