Wind power 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 small-scale 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 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: wind power
The theoretical potential in Finland is large, though the wind resource is
not of as high a quality as in Denmark and Norway, and freezing seas make
offshore wind projects challenging. Nevertheless, according to an analysis
prepared by Pöyry Energy for the Ministry of
Employment and the Economy, the realisable potential for wind in Finland ranges
up to 6 TWh annually through the year 2020.
Subsidies are granted for energy investments and development projects and
energy among which wind power. The Council of State’s decision (625/2002, EUVL
C37/2001/) sets a maximum percentage of 40% for wind power (for companies
only).
For renewable electricity generators there is a support scheme in place, funded
from the electricity tax on consumers. The scheme offer: 0.69 eurocents per kWh
tax support for electricity produced from forest chips and wind power, 0.25
eurocents per kWh tax support for electricity produced from recycled fuels and
0.42 eurocents per kWh tax support for electricity produced from other
renewable sources.
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. In 2006, in total € 34.1
million was available for energy supports and approximately 70% was granted to
renewable energy investments. The figure includes € 3.8 million in grants from
the European Regional Development Fund. The share dedicated to wind power is
not available.
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 wind power is not available.
Various national technology programmes and projects have involved RES technologies,
however the main focus being on bioenergy.
In the “Long-term Climate and Energy Strategy” approved by the Finnish
Government in November 2008, it is stated that a series of measures will be put
in place in order to allow Finland to meet the requirements as set by the RES
Directive of 2008. These will be mainly based on an increase of the use of
wood-based energy, waste fuels, heat pumps, biogas and wind power, bringing to
a growth of forest chips use to two or three times over current levels.
Climate and energy financing were planned to increase from EUR 350 million in
2007 to EUR 440 million in 2008 and to EUR 550 million in 2009.
Future programme changes expected
In April 2009 a working group from the Ministry of Employment and the Economy submitted
a proposal for a feed-in tariff for wind power to be introduced in 2011. Under this scheme, the target price for wind power, to be determined by the
authorities, would be €83.5/MWh. The difference
between the market price of electricity, and this target level, would be paid
to wind power producers as a feed-in tariff. The power producer would sell
the electricity and bear responsibility for the balance. The producer would
receive tariff payments at three-month intervals. The feed-in tariff for
renewable energy would be financed outside the state budget, with the fee to be
collected directly from electricity end-users. The feed-in tariff is only to be
paid to new wind power plants.
The feed-in tariff is expected to further the construction of wind power in
line with the Government’s Climate and Energy Strategy, whose objective it is
to increase the production of wind power to 6 TWh,
i.e. by almost 30 times by the year 2020 (current production level
approximately 0.2 TWh).
The guaranteed price for wind power would be introduced in early 2010 for a
period of 12 years. The tariff would be exclusively applied to new
wind power plants planned for construction. A power plant eligible for the
tariff would have to be located in Finland, or within Finland’s territorial
waters, and be connected to the power grid within the territory of Finland. The
baseline for power plants constructed prior to the new system is that their
position will not be undermined due to the new system.
The working group emphasises that the tariff
system would not be sufficient as such to ensure a significant increase in wind
power capacity. Therefore, in addition to legislation on feed-in tariffs, it
should be ensured that wind power projects can be implemented within a
reasonable schedule. In the current situation, schedules may be prolonged due
to the slow pace of licensing processes and land use planning in particular.
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)
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, http://ec.europa.eu/energy/renewables/transparency_platform_en.htm
Ministry of Employment and the Economy: Working Group Proposes Market-based
Guaranteed Price for Wind Power, 7 April 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)
Interactive EurObserv’ER Database
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Last update: January 2011
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