Renewable Energy In Finland

Renewable energy in Finland increased from 34% of the total final energy consumption (TFEC) in 2011 to 48% by the end of 2021, primarily driven by bioenergy (38%), hydroelectric power (6.1%), and wind energy (3.3%). In 2021, renewables covered 53% of heating and cooling, 39% of electricity generation, and 20% of the transport sector. By 2020, this growth positioned Finland as having the third highest share of renewables in TFEC among International Energy Agency (IEA) member countries.

In 2020, Finland's share of renewables in gross final energy consumption reached 44.6%, surpassing the target of 38%. This excess enabled Finland to sell statistical transfers of renewable energy to EU member states not meeting their 2020 targets. In March 2021, Finland agreed to a transaction with Belgium, selling 1,376.5 GWh of renewable energy for EUR 18.6 million. After this sale, Finland's renewable energy share in gross final consumption was reported at 43.8%, still above the 2020 goal.

Finland's climate strategy, aimed at carbon neutrality by 2035, focuses on increasing energy efficiency and advancing technological innovations, especially in sustainable hydrogen solutions for heavy transport and industry. According to data from 2021, Finland's energy supply was less dependent on fossil fuels compared to many other countries, with only 36% coming from these sources, significantly lower than the International Energy Agency's average of 70%. The emphasis in Finland's energy mix has been on renewable sources like biomass, hydro, and wind power. These measures are part of Finland's efforts to decrease energy intensity and improve energy security.

Renewable energy growth and targets

According to the International Energy Agency's (IEA) 2023 Energy Policy Review, Finland saw a notable increase in its total final energy consumption (TFEC) from renewable sources, growing from 34% to 48% between 2011 and 2021. This increase was driven by a growth in bioenergy from 29% to 38% of TFEC, hydroelectric power from 4.7% to 6.1%, and wind energy from 0.2% to 3.3%. By 2020, Finland's share of renewables in TFEC ranked third highest among the 31 IEA member countries.

In 2021, renewable energy accounted for 43% overall, 39% in electricity, 53% in heating and cooling, and 20% in transport. For 2030, renewable energy targets have been set at 51% overall, with specific aims of 53% in electricity, 61% in heating and cooling, and 45% in transport.

Energy in Finland

Finland differs from most industrialized countries in that many of its energy needs stem from the Nordic conditions. Finland is located between 60 and 70 degrees northern latitude and a quarter of its area lies north of the Arctic Circle. In fact, one third of all people living north of the 60th parallel are Finns. The annual mean temperature in the south of the country is around 5 °C and 0 °C in the north. The population-weighted average number of heating degree days for Finland is 5000, considerably more than in Sweden and Norway (4000). Thus, the Finnish climate is the coldest in the EU and, consequently, a large share of the energy (22%) is used for the heating of buildings.VTT Technical Research Centre of Finland, 2002.
Renewable Energy Resources in Finland
'. OPET Report 9.

Finland's energy consumption increased 44% in electricity and 30% in total energy use during the period 1990–2006. The increase in electricity consumption of 15,000 GWh (1995–2005) was more than Finland's total hydroelectric power capacity. The consumption increased almost equally in all sectors (industry, residential, and services). The share of renewable electricity in Finland has been stable (1998–2005): 11-12% plus yearly variable hydroelectric power, totaling 24-27%. The forest industries contributed 57% of the RE power generation via black liquor and wood burning in 1990. By 2005 this share had grown to 67%.Energy statistics 2006, Finnish statistical center, Tilastokeskus, energiatilasto, Vuosikirja 2006. The rest consisting primarily of hydroelectric power. As with most first world countries, the vast majority of commercially viable hydroelectric sites in Finland have already been developed. The forest industry uses 30% of all electricity in Finland (1990–2005). Its process wastes, wood residues, and black liquor were used to produce 7-8000 GWh of electricity in 2005. However, during that year electricity consumption fell 10% compared to 2004 as a result of a prolonged forest industry labour dispute. Finland's power consumption was (2005) 17.3 MW electricity per capita compared to Germany 7.5 MW per capita. This number includes the power losses of the distribution.

According to the International Renewable Energy Agency (IRENA), Finland's renewable energy sector in 2020 was predominantly fueled by bioenergy, which accounted for 81% of the renewable energy supply. Hydro/marine sources contributed 12%, wind power made up 6%, and geothermal sources added 1%, with solar energy contributions not explicitly mentioned.

Finnish CO₂ emissions grew 14.5% (1990:2004), while the EU average was - 0.6%.

Government policy

The Finnish energy policy is based on the National Climate Strategy of 2001, updated in 2005 and 2008. The strategy provides the basis for policy preparation, decision-making and negotiations on national, EU and international levels. In its most recent adaptation, the strategy focuses on setting guidelines up to 2020 and a vision as far as 2050 to steer long-term planning.

The aim is to fulfil the Kyoto Protocol and its obligations by 2013. By that time, adequate post-Kyoto emission reduction measures should be in place, including the set of measures required of EU countries by 2020 by common agreement. To that end, the EU requires its members to report by 2016 about their ability to meet the obligations set for 2020. With regard to renewables, the EU goals aim to a share of 38% of final energy consumption in Finland by 2020, compared to 28.5% in 2005 and a previous national goal of 31% by 2020.

The national long-term vision aims at halting the growth of final energy consumption on one hand, and increasing the share of renewables on the other hand. To attain these objectives, the energy efficiency of consumption must be enhanced, particularly in housing, construction and transport, and new policy measures must be enacted to promote renewables.

The government expects the growing global demand of fossil fuels to drive their prices further up in the long term. Combined with the cost of emission allowances, this will significantly change the price relationship of fossil and renewable energy in favour of the latter. The government envisions significant growth in the use of wood-based energy, waste fuels, heat pumps, biogas and wind energy. A feed-in tariff system will be introduced as a major new policy measure to drive the introduction of renewables.

Other major points in the strategy include:
* The use of bioenergy in the forest industry will be maximised.
* The use of wood residues from forestry as a fuel and raw material will be tripled by 2020 to 12 million m³.
* The government will support the installation of heat pumps, bioenergy and solar energy systems for space heating.
* The use of fossil oil for heating will end at the latest during the 2020s.
* The use of agricultural biomass and biogas as fuels will be increased.
* New technologies for transportation biofuel production will be explored with the aim of having a share of 10% for biofuels in transport fuel use by 2020.
* Installed wind power capacity will increase to 2000 MW by 2020 from the present 120 MW with the help of various subsidies.
* The government will support the use of off-shore wind power by leasing the sea areas with low tariffs.
* The government will encourage power uprates in old hydropower plants and the construction of some new hydropower plants.
* The use of recycled fuels will increase with 150% by 2020.

Finland already has among the highest shares of renewables, yet Finland for a long time did not use feed-in tariffs, fixed premiums, green certificate systems or tendering procedures. Lately some new policies have been adopted. From the European countries, Finland, Malta and Slovenia are the only ones (2006) that use only tax incentives to promote wind energy and other renewable electricity. Finland has no obligations or binding recommendations for the power companies to promote RE.

Finland was one of the few that opposed the sustainability criteria of biofuels in the EU in 2013.

Private sector

Energy markets in Finland are based on free enterprise and open competition. The electric power industry in Finland has been open for competition since the new electricity market legislation in 1995. At the same occasion Finland joined the joint Nordic electricity market area where spot prices for electricity are determined at the common electricity exchange Nordpool. Power can be bought and sold freely in Finland, Sweden, Norway and most parts of Denmark.

For district heat there is no national market for technological reasons, as heat cannot be transported over long distances. However, district heat is largely produced by the same energy companies in centralised district heating plants or CHP plants. Locally there is usually only one district heat provider available, which means that the competition takes place between alternative heat sources. Biomass fuels and peat are commonly used for district heating. Some district heat is also sold in small scale by local entrepreneurs who produce it with biomass fuels. The government company for promoting energy efficiency, Motiva, has a program for promoting small scale heating entrepreneurship.

In the Nordic electricity market, each country is independently responsible for its transmission grid. In Finland the local distribution grids are owned primarily by local energy companies. The national transmission grid is owned by the Fingrid corporation which for its part is owned jointly by the state, energy companies and financial investors. Major changes in the ownership of Fingrid are expected as new EU legislation will forbid energy producers from owning parts of the transmission grid.

The largest electricity producers in Finland are Fortum, the state energy company, Pohjolan Voima, the energy company owned by major industries, Teollisuuden Voima, the industry-owned nuclear power company, Helsingin Energia, the power company of Helsinki City, and Vattenfall, the largest energy company of Sweden. There are also a large number of small and medium-sized local energy companies. A special feature of the Finnish electricity markets is companies like Pohjolan Voima and Teollisuuden Voima that operate with the Mankala-principle. That is, they do not pay dividends, but rather provide power to their owners without seeking profit.

Moreover, many of the industrial corporations are themselves major energy producers as in a number of factories process wastes are used as fuels. In most cases such fuels originate from wood processing and, therefore, count as renewables. Thus major producers of bioenergy in Finland include all the major wood and paper industry corporations: Stora-Enso, UPM and M-Real. Furthermore, the national oil company, Neste Oil, is a growing producer of biofuels and biodiesel in particular.

Largest hydropower producers are the state-owned companies Fortum and Kemijoki and the industry-owned Pohjolan Voima. The largest producer of wind power in Finland is the Hyötytuuli corporation, owned by the energy companies of various cities. Hyötytuuli produces about one third of wind power in Finland. The rest is produced by a large number of companies in relatively small power plants.
Finland is a growing producer of RES related technology. The volume of trade of all energy technology to and from Finland is shown in Figure 4. RES technologies hold a significant share of this trade.

The largest producers of RE technology in Finland include
* ABB, produces among other things components to wind power plants.
* WinWind, producer of wind power plants.
* Foster Wheeler and Metso Power, producers of boilers for biomass and other fuels.
* NAPS Systems, producer of solar panels.

Smaller companies that produce energy-related clean technology include Aidon, Bearing Drive Finland, DGT Direct Granulation Technology, EcoSir, Finnish Electric Vehicle technologies, Greenvironment, Modilis, Primet, Puhdas Energia and The Switch.

Energy efficiency in Finland is advanced by the state-owned company Motiva. Public funding for the development of new technologies is primarily distributed by the Finnish Funding Agency for Technology and Innovation Tekes.

Employment

In total electricity and district heat production employed 14,000 people and oil refining and distribution 13,500 people out of the 2,500,000 people employed in Finland in 2003. Bioenergy sector employed an estimated 6000-7000 people. The total employment in the energy sector numbered 34,000 people in 2004. These numbers include renewable and non-renewable energies as there are no separate statistics.

The major renewable energy sources, namely hydropower and bioenergy are produced in a large scale, where business models and jobs are similar to other large-scale energy production. There is additionally small scale production of renewable energy that tends to generate small enterprise and a proportionally greater number of jobs.

For example, the Ministry of Employment the Economy has conducted a research that found that there are 368 small bioenergy companies that provide 1,667 jobs. The number of companies and jobs has grown steadily in the past years and the growth is expected to continue given the ambitious goals for bioenergy in the national climate and energy strategy.

Given that there is established production of wind power plants and plant components, the increased use of wind power in Finland and elsewhere can be expected to create jobs in the sector. This would generate demand for professionals of all levels in mechanical, material and electrical technology. Similar demand can be expected from the increased use of bioenergy and the production of the necessary power plant components.

Professionals in chemistry and life sciences and related fields will be needed for the envisioned development and production of the next generation of biofuels. They will also have an important role in developing the forest industry towards more versatile biorefineries instead of traditional pulp and paper mills.

Finally the strengths of the Finnish electronics industry and education can give rise to a variety of clean technologies such as solar power, control systems for power production and consumption, electric vehicles, etc.

Energy sources

Biomass

Heat and power

Bioenergy, closely associated with Finland's forestry and forest industry, plays a significant role in the country's renewable energy portfolio. Wood-based fuels, derived from forest industry by-products such as black liquor, bark, sawdust, and industrial wood residues, along with biomass from logging

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