Energy policy of Finland

10–15% of European peat lands are in Finland. Finland uses over 50% of the world's peat as energy. The annual emissions of Finnish energy peat are equal to all car emissions in Finland. According to IPCC peat is fossil energy. In some estimates, it takes 2000–3000 years to build up. Some parties e.g. Center claim peat to be bioenergy. The definition of bioenergy in Finnish individual statistics may be good to confirm in general. The business annual turnover of energy peat in Finland is €300 million- Annual state support is €200 million. This support was increased after European price on coal to compensate the extra cost to industry. €200 million is equal to mission funds for elderly care in 2019 in Finland.[2]

In electricity production, peat's share of CO₂ emissions is 20% while it produces 6% of electricity in Finland. Finland is appraised of its high knowledge of using bioenergy. Finland burn wood with peat and processes are developed to use peat (ref voima 9.9.2019)

According to Stern report it is cheaper to stop the global warming emissions than pay the climate change costs. Polluter pays principle allocate a big share of climate change-related agriculture losses compensations in Finland to the peat producers to pay for long time in future. According to the environmental law in Europe businesses must be aware of their environmental impacts. Ignorance does not remove the responsibility.

Finland was the first country in the 1990s to introduce a carbon tax, initially with exemptions for specific fuels or sectors.[3][4][5] Energy taxation was changed many times. These changes were related to the opening of the Nordic electricity market. Other Nordic countries exempted energy-intensive industries, and Finnish industries felt disadvantaged by this. Finland placed a border tax on imported electricity, but this was found to be out of line with EU single market legislation. Changes were then made to the carbon tax to partially exclude energy-intensive firms. This had the effect of increasing the costs of reducing CO₂ emissions.[6]^: 16

Scholars suggested that carbon tax revenues in Finland could be used to reduce labour taxes, which would favour non-energy-intensive industries.[6]^: 17

In EU politics Finnish government supported the delay in the banning of 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.[8] 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.[9]

In 2019 In Finland the nuclear power owners responsibility of major accident is 700 million euros that state can rise by €70 million in maximum.[10] Fukushima accident cost $167 million. Many major nuclear plant accidents have taken place: Chernobyl disaster 1986, Tsuruga Nuclear Power Plant Japan 1995, Rocky Flats Plant USA 1957 and UK Sellafield 1955.[11] Heat loss from nuclear power plants is released in oceans. The International Union for the Conservation of Nature scientist warned in 2019 that oxygen in the oceans is decreasing. Many vital ecosystems in danger of collapse. Major part of nuclear power energy is released in oceans as heat.[12]

In the 1980s the nuclear accident costs for the nuclear plant in Finland were limited to 1.6 mrd markka (0.26 mrd €).[13] The estimated cost of Chernobyl disaster 1986 is hundreds of bn dollars.[14] 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.

Greenpeace calculated in 2009 that any additional nuclear energy would be for electricity import not for domestic use since the electricity demand will decline from the year 2020.[15] Climate and energy strategy 2008 did not give the reduction of CO₂ emissions in 1990-2020. After environmental committee inquiry the target was told to be 5%. Only 10% of the Finnish climate emissions are from electricity. According to Pöyry Energy (2008) addition of nuclear energy would reduce Finnish climate emissions 4% (2,8 Mt) and majority of the electricity would be for export. In addition, the major nuclear companies Fortum and PVO plan new coal companies.[15]

Fingrid 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.[16] The transmission lines are owned by Fingrid. The nuclear companies Fortum and PVO 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. Representatives of the social democrat party supported in 2008 the 100% state ownership and control of Fingrid including acquisitions from the nuclear and insurance companies.[17] Finnish state and the insurance company Ilmarinen will take over a 50% share of Fingrid from the nuclear companies Fortum and PVO as announced in January 2011.[18]

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 fed 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.

Most hydroelectricity capacity was built before year 1997. Fortum owns the 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.

The wind power target of Finland was 494 MW wind power by 2010.[22] Only 40%, 197 MW of the target, was achieved in 2010.[23]

Solar heating is the usage of solar energy to provide space or water 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 1 and Lithuania 1. Corresponding capacity was in other Scandinavian countries Denmark 68 and Sweden 33.[24]

During 1995–2010 Finland's target was 50 GWh solar heating[22] 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 CO₂.[25] In Europe the solar heating average yield was about 0.7 GWh per MW (17.3 TWh/24,114 MW). With this average ratio Finland's estimated capacity in 2010 would equal 23 *0.717= 16 GWh. This was 32% of the national target by 2010.

During 1995–2010 Finland's target was 40 MW solar power capacity addition producing 50 GWh solar power.[22] In 2010 Finland's total solar power capacity was 10 MW. This was 25% of the national target by 2010.[26]

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.[27] In 2010 a new low energy house in Heinola Finland saved 70% in warming expenses compared to the equal average warming expenses.[28] 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.[29] 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 (2008) the potential energy savings in the buildings correspond the electricity of three nuclear plants.[30] In 2011 Finland has four nuclear plants and one under construction with an original scheduled start in 2009.

Finnish forest companies are significant players in the global forest industry policy. See e.g. UPM, Stora Enso and M real Metsäliitto.

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.[33] 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.[34][35] In 2010 ca 20% of Finnish forest industry was based on Russian timber.[36] 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.[37]

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.[36] 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).[36]

For prevention of the global warming the emissions of the industry plant in Finland, Russia, China 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 the emissions have no national labels in respect to global warming. Among others Friends of the Earth have criticized Stora Enso policy in 2009 of the shift in the Eucalyptus monoculture plantations in Brazil endangering the rain forests and local farmers land ownerships.[38]