Energy policy of Finland
Encyclopedia
Energy policy of Finland describes the politics of Finland
Politics of Finland
Politics of Finland takes place in a framework of a parliamentary representative democratic republic and of a multi-party system. The President of Finland is the head of state, leads the foreign policy, and is the Commander-in-chief of the Defense Forces. The Prime Minister of Finland is the head...

 related to energy. Energy in Finland
Energy in Finland
Finland lacks domestic sources of fossil energy and must import substantial amounts of petroleum, natural gas, and other energy resources, including uranium for nuclear power.-Overview:...

 describes energy
World energy resources and consumption
]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...

 and electricity
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...

 production, consumption and import in Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...

. Electricity sector in Finland
Electricity sector in Finland
The electricity sector in Finland relies on nuclear power, forest industry black liquor and wood consumption, cogeneration and electricity import from Russia. In 2008 the consumption of electricity in Finland was 17 036 kWh/person. The European union average was 7 409 kWh/person...

 is the main article of electricity in Finland.

Climate policy

Finland is member of the EU. EU sets the minimum climate policy targets for Finland.

Electricity

The annual net import of electricity has varied between 5-20 % of consumption.

Lighting

In the EU politics Finnish government supported the delay in the banning of the incandescent lightbulbs.

According to the national state owned energy center Motiva banning of incandescent lightbulbs will save 5.8 % of households electricity (1.1 TWh) in Finland. The lightbulbs banning is not restricted in households but concern also other sectors lighting, like industry, service, agriculture and public lighting, making the total national percentage lower and total energy savings higher than the above given numbers 5.8 % of electricity 1.1 TWh. Motiva calculation may have used average year consumption instead of the specific year e.g. 2006. According to the statistics of Finland, in 2006 the electricity used in households was 10.6 TWh excluding the electricity warming that was 9.1 TWh. Thus 1.1/19.7 would be ca 5.6 % in 2006. Excluding electric warming it would be 10.4 % of household electricity.

Nuclear power

In the 1980s the nuclear accident costs for the nuclear plant in Finland were limited to 1.6 mrd Finnish marks (0.26 mrd €). The estimated cost of Chernobyl disaster
Chernobyl disaster
The Chernobyl disaster was a nuclear accident that occurred on 26 April 1986 at the Chernobyl Nuclear Power Plant in Ukraine , which was under the direct jurisdiction of the central authorities in Moscow...

 1986 is hundreds of bn dollars. Also the EU has kept supporting Russia in the expenses of the Tšernobyl disaster still in 2010. The general environmental policy of EU is that the polluter pays. This does not apply the external costs of nuclear power that are in Finland diluted to all national tax payers and in the case of nuclear disaster probably further to all tax payers of the European Union.

Transmission

Fingrid
Fingrid
Fingrid Oyj is a Finnish national electricity transmission grid operator. It is owned by the Finnish state , power companies Fortum and Pohjolan Voima and financial investors . CEO of the company is Jukka Ruusunen....

 Oyj is a Finnish national electricity transmission grid operator. In Finland the electricity transmission costs were informed in September 2010 to rise for everybody in 2012 at least 10 % based on the needed transmission line investments demanded by the new Olkiluoto nuclear plant under construction in 2005-2013. The transmission lines are owned by Fingrid
Fingrid
Fingrid Oyj is a Finnish national electricity transmission grid operator. It is owned by the Finnish state , power companies Fortum and Pohjolan Voima and financial investors . CEO of the company is Jukka Ruusunen....

. The nuclear companies Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...

 and PVO
PVO
PVO may refer to:* DaimlerChrysler's Performance Vehicle Operations, also known as Street and Racing Technology* Private voluntary organization...

 were 50 % shareholders of Fingrid. Both of them are shareholders of the nuclear power plant under construction in 2005-2013. According to the EU decisions the power companies should not own the grid. Representative of the social democrat party supported in 2008 the 100 % state ownership and control of Fingrid including acquisitions from the nuclear and insurance companies. Finnish state and the insurance company Ilmarinen will takeover a 50 % share of Fingrid from the nuclear companies Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...

 and PVO
PVO
PVO may refer to:* DaimlerChrysler's Performance Vehicle Operations, also known as Street and Racing Technology* Private voluntary organization...

 as informed in January 2011.

Electricity costs

The industry electricity tariffs are lower than other users. In Finland the electricity pricing of households promotes electricity use with high fixed prices and increasing price reductions for higher consumption. The annual transmission costs for at least a moderate energy user (less than 2 MWh a year, a typical German consumption) can be higher than the actual electricity cost. With this consumption level the fixed costs may be around 0.25-0.3 % of total electricity costs. According to the newspaper discussions in some contracts the fixed cost can be substantial also when there is no electricity use and the power lines are old. The fixed costs may be a significant cost factor in the evaluation of own renewable electricity production. This applies also alternatives to fossil heating if connection to old system is in place. Most often only the remote summer cottages have no connection in the transmission power lines with annual fixed costs. At least until the end of 2010 there was no compensation of extra electricity feeded in the power lines. This is also valid in 2011 for small scale domestic or agricultural farm production. The electricity feed in policy of government have mainly supported the large energy companies economical interests. The shift in the charge of electricity consumption instead of the present trend to increase of the fixed prices would promote economically the energy savings and renewable energy investments. This could be politically controlled since the business interest is to promote high energy consumption.

Energy security and domestic energy

Finland is highly dependent on energy import from Russia: 71 % of total energy in 2007: Hard coal 92 %, raw oil 75 % and natural gas 100 %. The support of domestic energy has been mainly based on traditional bioenergy and highly disputed fossil peat energy
Peat energy in Finland
Peat energy in Finland describes peat energy use in Finland. Peat has high global warming emissions and high environmental concerns. It may be compared to brown coal or worse than this lowest rank of coal. Peat is the most harmful energy source for global warming in Finland...

 alternatives. The new renewable energy alternatives have not been effectively promoted by the end of 2010. This strategy was criticised by the IEA in its country evaluation in 2007. According to the renewable energy statistics of EU countries Finland has low capacities of wind power
Wind power in the European Union
According to the European Wind Energy Association report of February 2011, there are over 12,000 wind turbines in Europe with a total capacity of 84 GW. The European Union accounts for over 98% of that total. In 2010, €12.7 billion was invested in EU wind farms and 9.3 GW of new power capacity was...

 (19/27), solar power
Solar power in the European Union
Solar power in the European UnionSolar power consists of photovoltaic and solar thermal power.During 2010, the European solar heating yield was 17.3 TWh, annual turnover 2.6 Billion € and employment 33,500 persons...

 (17/27) and solar heating
Solar power in the European Union
Solar power in the European UnionSolar power consists of photovoltaic and solar thermal power.During 2010, the European solar heating yield was 17.3 TWh, annual turnover 2.6 Billion € and employment 33,500 persons...

 (23/27) in 2010. Wind power is repeatedly the most favoured power source in Finland with over 90 % of support according to the public opinion tests. In this respect the official energy policy of Finland has promoted the market control of traditional energy sources and companies.

Renewable energy

Renewable energy target of electricity was 35 % in 2005 from 1997 to 2010. In 2006 the target was dropped in 31.5 % from 1997 to 2010. The RE electricity share was about the same in 1997 as in 2009. Since the consumption of electricity increased, the use of fossil fuel electricity increased as well. Since the energy statistics of Finland have rather high annual variations, for more accurate energy trend evaluations one may want to calculate also e.g. five year averages.
Renewable Electricity
|-----
Year RE RE electricity/
total electricity (GWh)
RE without
hydro electricity
1997 26.2 % 19,269 / 73,603 10.2 %
2000 28.6 % 22,676 / 79,158 10.4 %
2001 25.7 % 20,887 /81,188 9.7 %
2005 26.7 % 22,586 / 84,672 10.8%
2006 24.1 % 21,670 / 90,024 11.5 %
2009 25.9 % 20,900 / 80,795 10.3 %
RE = Renewable electricity

Hydro electricity

Most hydroelectricity capacity is build before year 1997. Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...

 owns majority of water power. Fortum received most of its hydroelectricity power capacity in the disputed acquisition of the same size national company and mainly renewable electricity company Imatran Voima. Fortum was until then mainly a nuclear company. Finnish competition authorities approved the deal.

Wind power

The wind power target of Finland was 494 MW wind power by 2010. Only 40 %, 197 MW of the target, was achieved in 2010.

Solar heating

Solar heating is the usage of solar energy to provide space or water heating
Water heating
Water heating is a thermodynamic process using an energy source to heat water above its initial temperature. Typical domestic uses of hot water are for cooking, cleaning, bathing, and space heating...

. Solar heating per capita in Finland was among the lowest in the EU in 2010, with high unused domestic energy opportunities (W/capita): Finland 4, Latvia 3, Estonia
Energy in Estonia
Energy in Estonia describes energy and electricity production, consumption and import in Estonia. Energy policy of Estonia describes the politics of Estonia related to energy. Electricity sector in Estonia is the main article of electricity in Estonia....

 1 and Lithuania 1. Corresponding capacity was in other Scandinavian countries Denmark 68 and Sweden 33.

During 1995–2010 Finland’s target was 50 GWh solar heating According to ESTIF estimation in end 2010 solar heating capacity was 23 MW in Finland, 379 MW in Denmark and 312 MW in Sweden. During 2010, the European solar heating yield was 17.3 TWh with capacity 24,114 MW saving 12 Million tons of C02. In Europe the solar heating average yield was about 0.7 GWh per MW (17.3 TWh/24,114 MW). With this average ratio Finlands estiated capacity 2010 would equal 23 *0.717= 16 GWh. This was 32 % of the national target by 2010.

Solar power

During 1995–2010 Finland’s target was 40 MW solar power capacity addition producing 50 GWh solar power. In 2010 Finland’s total solar power capacity was 10 MW. This was 25 % of the national target by 2010.

Space heating

In 2006 the energy for space heating was 19.5 % of total end energy consumption in Finland divided in 44 % by fuels, 39 % by district heating and 17 % by electricity. The district heating systems are mainly monopolies controlled by local politicians or private companies. In practice the owners of the houses with district heating system have no influence in the choice of energy sources or prices.

For example the politicians of Espoo sold the public district heating system for the big energy company Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...

 in 2006. Since then the district heating prices in Espoo have kept rising and Espoo city has lost tens of millions of euros annually in the energy business compared to nearby cities Helsinki and Vantaa. Further the tax payers have higher district heating costs. Fortum uses 100 % fossil energy of natural gas from Russia for district heating. In 2010 Fortum
Fortum
Fortum Oyj is a Finnish publicly listed energy company, which focuses on the Nordic and Baltic countries, Poland and the north-west of Russia. After acquisition of Russian energy company TGC-10 in year 2008, Western Siberia has become an important operating area for Fortum. The head of the company...

 lobbied for the total restriction by law of all renewable energy alternatives within the district heating areas. This has not been realised, but the renewable alternatives have more control by the public permission system since 2010. The total energy company deal from Espoo to Fortum was worth of 365 million euros for Espoo. The investment of these funds have not given the claimed 5-6 % return. In fact, 15 million € was invested in Kaupthing that was in bancrupt in 9.10.2008. Further Espoo lent a sum of 82 million euros to the state for a motor way project (Kehä 1) with no interest at all during 2008-2013. Even though the commercial investors have received large compensations for their work from Espoo city energy gains, the media have given the impression that the return of funds have not compensated the tax payers costs. In short, the deal can be considers successful for the nuclear company Fortum, but unsuccessful for the Espoo tax payers. There is no effective free competition for district heating in place. Further, one hardly can avoid the impression that the energy and construction companies have mutual interests to promote the dependency on Russian energy. Neither Finnish construction nor energy companies have at least until end 2010 actively promoted higher energy efficiency standards and alternative energy source obligations.

Low energy houses

Among the supporters of solar heating in Finland is architect Bruno Erat who successfully applied solar heating in Finland in the 1970s. Bruno Erat built in 1978 the first low energy building in Finland. In 2010 a new low energy house in Heinola Finland saved 70 % in warming expenses compared to the equal average warming expenses. According to Mikko Saari (VTT 2004) a low energy block of flats in Finland would save 400 000–1 000 000 € in warming costs in 50 years with 3-6 % annual energy price increase. There is an ongoing significant construction boom in Finland based on old and high energy demand construction standards since the energy cost payment is paid by the users and future generations but not the construction industry nor its leaders early retirement payrolls. The government strategy (published in 2008) had no aim to reduce the total energy use of buildings by 2020. Many construction companies operating in Finland have also business in Russia.

According to Mr Lauri Myllyvirta Greenpeace
Greenpeace
Greenpeace is a non-governmental environmental organization with offices in over forty countries and with an international coordinating body in Amsterdam, The Netherlands...

 (2008) the potential energy savings in the buildings correspond the electricity of three nuclear plants. In 2011 Finland has four nuclear plants and one under construction with a original scheduled start in 2009.

Climate and energy strategy 2008

Government
Matti Vanhanen's second cabinet
Matti Vanhanen's second cabinet was the 70th cabinet of Finland. The cabinet was a centre-right/green coalition, consisting of four parties: the Centre Party Matti Vanhanen's second cabinet (April 2007 - June 2010 ) was the 70th cabinet of Finland. The cabinet was a centre-right/green coalition,...

 energy strategy in October 2008
|-----
Use 2005 TWh Use 2020 TWh Growth /%
Primary energy 381 430 12.9 %
Electricity total 84.9 98 15.4 %
- Industry and building 44.2 56 26.7 %
- Houses 12.7 13 2.4 %
- Electric warming 8.8 8 -9.1 %
- Services 14.7 16 8.8 %
- Other use 4.6 5 8.7 %
Other energy 216.7 212 -2.2 %
Energy end use 302 310 2.6 %
RE
Renewable energy in Finland
Renewable energy in Finland of electricity was : Water 60%, forest industry black liquor 22%, other wood residues 16%, wind power 0.2% and other RE 1 %. The European objectives are: 22% renewable source electricity and 12% renewable of primary energy in 2010 . This includes e.g...

 of end use
86 118
RE
Renewable energy in Finland
Renewable energy in Finland of electricity was : Water 60%, forest industry black liquor 22%, other wood residues 16%, wind power 0.2% and other RE 1 %. The European objectives are: 22% renewable source electricity and 12% renewable of primary energy in 2010 . This includes e.g...

 of end use
28.5 % 38.0 % 9.5 %-units
RE
Renewable energy in Finland
Renewable energy in Finland of electricity was : Water 60%, forest industry black liquor 22%, other wood residues 16%, wind power 0.2% and other RE 1 %. The European objectives are: 22% renewable source electricity and 12% renewable of primary energy in 2010 . This includes e.g...

 of primary energy*
24.9 % 29.8 % 4.9 %-units
*page 41: 84.9 TWh year 2005 and 128 TWh year 2020


The government of Finland made the climate and energy strategy in October 2008. It considers energy in 2005, 2020 and 2050. According to this plan the primary energy use in Finland will increase 13 % from 2005 to 2020. The use of electricity will grow more 15.4 % that energy in average. The same period 2005-2020 the energy use of industry and building is allowed to increase 26.7 %. According to the government plan RE
Renewable energy in Finland
Renewable energy in Finland of electricity was : Water 60%, forest industry black liquor 22%, other wood residues 16%, wind power 0.2% and other RE 1 %. The European objectives are: 22% renewable source electricity and 12% renewable of primary energy in 2010 . This includes e.g...

 of end use will increase 9.5 % from 2005 to 2020 but only 4.9 % RE
Renewable energy in Finland
Renewable energy in Finland of electricity was : Water 60%, forest industry black liquor 22%, other wood residues 16%, wind power 0.2% and other RE 1 %. The European objectives are: 22% renewable source electricity and 12% renewable of primary energy in 2010 . This includes e.g...

 of the primary energy use. This shows the importance of definitions.

The governmental plan 2008 does not address with a clear message the European Union obligation for 20 % energy saving by 2020. In Finnish government target 2008 both the electricity and energy use will increase by 2020. Energy efficiency
Energy efficiency
Energy efficiency may refer to:*Efficient energy use, sometimes simply called energy efficiency.*Energy conversion efficiency, the ratio between the output and input of an energy conversion machine....

 has a key role in the European climate and energy strategy since March 2007. The European Council has target of 20 % energy saving by 2020. The national plans that should include 9 % energy saving until 2016 and 20 % saving until 2020, were to be delivered to the EU commission in 2007. Some countries set higher targets than the EU obligation. E.g. German target was 30 % saving in the public energy use during 1990-2012. British target was carbon neutral state buildings by 2012. Finnish strategy includes to move energy intensive companies abroad.

Forest industry

Finnish forest companies are significant players in the global forest industry policy. See e.g. UPM
UPM
-Technology:* Umdrehung pro Minute, German for revolutions per minute .* Unified Performance Management, a network optimization and application acceleration concept* Universal Port Module, SAN Director Module for ESS Fibre Port connections....

, Stora Enso
Stora Enso
Stora Enso Oyj is a Finnish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Stora and Finnish forestry products company Enso-Gutzeit Oy in 1998. It is headquartered in Helsinki, and it has approximately 29,000 employees...

 and M real Metsäliitto
Metsäliitto
Metsäliitto Group is a Finnish forest industry group present in about 30 countries. The Group's five business areas are Wood Supply, Wood Products, Pulp, Board and Paper,Tissue and Cooking Papers...

.

In 2007 the forest industry electricity use was 30.7 % of total electricity use in Finland and 53 % of all industry electricity use in Finland. In the government target the industry energy use will increase 26.7 % from 2005 to 2020. The big issue here is that if the industry is allowed to continue its business as usual and increase the energy use, the politicians are obliged to shift the burden of needed energy revolution demand double higher for all the rest of the society.

The Russian timber tax policy has been part of the energy politics in Finland. In 2010 ca 20 % of Finnish forest industry was based on Russian timber. However, the Russian timber export was highest in China. The Russian timber tax policy was also part of WTO negotiations in 2008. The Finnish ministers discussed the timber tax with the Russian leaders several times e.g. in 2008.

The increase of energy demand during 2005-2020 is somewhat in conflict with the daily news of the forest industry. During 2000-2010 several forest industry plants have been sold or shut down in Finland and started new forest plants in the Asia and South America. According to industry there were ca 50 forest industry plants in Finland in 2010. According to Helsingin Sanomat (Mr. Jyrki Iivonen) the employment reduced in the Finnish paper and cell industry by 3,786 persons during 2006-2010. In October 2010 under negotiations were additional 850 jobs in plants of Kouvola (Myllykoski / UPM) and Kotka Sunila (Stora Enso).

For prevention of the global warming
Global warming
Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...

 the emissions of the industry plant in Finland
Climate change in Finland
Environmental issues in Finland discuss the environmental issue in Finland.- Climate strategy 2001 :Finnish national renewable energy program was done in 1999 and it was accepted as the national climate strategy in 2001.It included targets for the renewable energy but no limit in the use of the...

, Russia
Climate change in Russia
Climate change in Russia describes the global warming related issues in Russia. This includes the climate politics, contribution in the global warming and the influence of the global warming in Russia. In 2009 Russia was ready to decline emissions 20-25 % from 1990 level to 2020.-Kyoto...

, China
Climate change in China
Climate change in China is a contentious issue since it is not required to be a signatory to the Kyoto Protocol yet it is responsible for one of the highest levels of greenhouse gas emissions....

 or Brazil are equal. The overall global carbon emission and energy use change may be small or negative when the international Finnish company move its production from Finland e.g. in Brazil or China. This information is not specified in the national emission statistics. The company specific data do not always include total worldwide company emissions. According to Worldwatch Institute
Worldwatch Institute
The Worldwatch Institute is a globally focused environmental research organization based in Washington, D.C. Worldwatch was named as one of the top ten sustainable development research organizations by Globescan Survey of Sustainability Experts.-Mission:...

 the emissions have no national labels in respect to global warming. Among others Friends of the Earth
Friends of the Earth
Friends of the Earth International is an international network of environmental organizations in 76 countries.FOEI is assisted by a small secretariat which provides support for the network and its agreed major campaigns...

 have criticized Stora Enso
Stora Enso
Stora Enso Oyj is a Finnish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Stora and Finnish forestry products company Enso-Gutzeit Oy in 1998. It is headquartered in Helsinki, and it has approximately 29,000 employees...

 policy in 2009 of the shift in the Eucalyptus
Eucalyptus
Eucalyptus is a diverse genus of flowering trees in the myrtle family, Myrtaceae. Members of the genus dominate the tree flora of Australia...

 monoculture plantation
Plantation
A plantation is a long artificially established forest, farm or estate, where crops are grown for sale, often in distant markets rather than for local on-site consumption...

s in Brazil endangering the rain forests and local farmers land ownerships.
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