DH Market Handbook Finland
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DH Market Handbook Finland
District Heating
FINBIO - The Bioenergy Association of Finland
Vapaudenkatu 12, FI-40100 JYVÄSKYLÄ
Tel. +358-207 639 600, fax +358-207 639 609
www.finbioenergy.fi
email [email protected]
Basic Data
Finland is a democratic republic in Northern Europe between the 60 and 70 degrees north latitudes.
It is the seventh largest country in Europe with total territory area 338 424 km² (of this 69% forest,
10% waterways, 8% cultivated land and 13% other). The total population is 5.4 million. The capital
and largest city is Helsinki (in capital area 1 million inhabitants). The population is mostly
concentrated in the southern and central part of the country. About 80% of the population lives in
urban areas.
Finland is the coldest country in the EU. Latitude is the principal influence on the country´s climate.
On the average, winter with snow lasts from mid December to mid March in the south and from
October to early May in the north. Vegetation zone is mainly boreal forest. The mean daily
temperature in capital Helsinki is in January minus 4 degree Celsius and in June plus 18 C. In Northern
Finland “Lapland” temperature may be up to minus 25-35 degree in mid winter. However, because
the Gulf Stream and the North Atlantic Drift Current moderate the climate, and because of the
relatively low elevation of the land area, Finland contains half of the world's arable land north of 60°
north latitude.
Finland is world famous about its large boreal forest area, lakes and peatlands, and also about global
forest industry. Forestry land (incl. protected areas) is 228 000 km2, of which 52% is owned by private
families, 35% by the state, 8% by companies and 5% by others. The total volume of growing stock is 2
205 million m3 (solid), of which 50% is pine, 30% spruce and 20% non-coniferous. The annual growth
is over 100 mill. m3 (solid) and annual fellings for industry purposes is 55 mill. m3 (solid). Total drain is
71.5 mill. m3 (solid). These numbers are industrial round wood contents, without branches, tree tops,
unmerchantable round wood and stump and root wood, which adds volumes around 20-40% more.
Companies also import raw wood. Peatlands cover about 30% of Finland´s territory. Peat is growing
annually more than used for energy purposes, about 25 TWh per year. Most often peat is mixed with
wood based fuels or coal at power or CHP plants. It is good quality fuel, indigenous and low price
fuel.
There are 2.3 million hectares arable farm land. Wheat, barley and oats are the most produced crops
in agriculture, also potato and other root vegetables are largely produced. About 0.5-0.7 mill.
hectares can be used for energy purposes.
The road- and railway network is quite large (main roads 460 000 km and in addition dense forest
road network, railroad net is 5 800 km). The maximum total weight for trucks is 60 tons on public
roads. Also dense water transport systems and routes on the seaside and lakes exist.
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DH Market Handbook Finland
Finland is also one of the world leaders in the utilization of wood based energy and the development
of biomass combustion technologies and efficient fuel supply chains from the farm size up to world´s
biggest biomass plant. A cold climate, long distances and energy intensive industry explain why
Finland has relatively high demand for energy. The specific energy consumption per capita is high;
industry uses about half of the energy generated. An efficient and balanced energy system is crucial.
However, 70% of energy used in Finland is exported and 30% indigenous. Today, significant
indigenous energy sources are limited mainly to wood fuels, peat and hydropower, but the range will
be widened with wind, biogas, agricultural biomass, biofuels for transport and heat pumps. The use
of wood fuels is growing the most.
Finland´s economy is quite positive and vacant. It serves reliable frames for living and business. Living
standards are high. GDP per capita is 38 000 € (2011). Finland is:
•
•
•
•
Number one in World Economic Forum 2005 Competitiveness Rankings (www.weforum.org).
One of the Least Corrupted Nations in the World (number one in 2007 and number two in
2011 / Transparency International).
The Best Country in 2010 by Newsweek (indicators: education, healthiness, quality of life,
economical dynamics and political frames).
The second happiest nation 2012 by United Nations´ Ranking (1. Denmark, 2. Finland, 3.
Norway, 4. Netherlands, 5. Canada etc.).
Usefull links:




Finland Statistics: www.stat.fi
Common information: www.visitfinland.com
Energy Statistics: www.energia.fi
Bioenergy Statistics: www.finbioenergy.fi and www.bioenergia.fi
Energy Policy
Finland is one of the world’s leading users of renewable sources of energy, especially bioenergy.
Renewable energy sources provide one fourth of Finland’s total energy consumption and account for
more than one fourth of its power generation. The country’s most important renewable sources of
energy include bioenergy – wood and wood-based fuels in particular –, hydropower, wind power,
ground heat and solar energy.
The objective of the national energy and climate strategy is to increase the use of renewable sources
of energy and their share of energy consumption. In addition to energy conservation, this is one of
the most significant means by which Finland’s climate targets can be achieved. In use, renewable
energy sources do not increase carbon dioxide emissions, while promoting employment and regional
policy goals and enhancing security of supply. The strategy also supports technology exports for the
industry, which are already becoming an important part of Finnish exports.
Finland´s national target is to increase the use of renewables by 9.5% units to totally 38% in 2020.
Bioenergy has a major role. Achieving the target 38% entails an increase in the use of renewable
energy of approximately 40 TWh compared with 2005, when renewable energy use accounted for
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DH Market Handbook Finland
28.5%. One particular target within this national action plan is for renewables to account for at least
20% of transportation fuels by 2020, taking into account the double counting referred to in the RES
Directive. Total renewable energy target is to use RES 124 TWh in 2020 (85 TWh for heating and
cooling, 33 TWh for electricity and 6.5-7 TWh in traffic) of which bioenergy is 105 TWh. The key
targets are to increase wind power from 0.2 TWh (2005) to 6 TWh by 2020 and the annual use of
wood chips in CHP production and separate heat production from 6 TWh (2005) to 25 TWh/90 PJ by
2020. Some 14 TWh/7.5 million m3 (solid) wood chips were used in 2011. Ambitious target is also to
increase the biofuel use in transport sector up to 5.3 TWh by 2020 (20% of the total use). Other
targets are to decrease the greenhouse gas emissions at least 16% until 2020 and to increase energy
efficiency 20% by 2020. Carbon dioxide emissions from the production and use of energy was 50
million tons in 2011, almost 70 million tons in 2002 (Finland´s National Renewable Action Plan 2020).
The official renewable energy target in Finland by 2020 is 38% calculated by final consumption. In
order to ensure this, a parallel analysis has been compiled in which the target has been set at 40%.
This would ensure that the official target is achieved even if energy consumption increases more
than anticipated. In addition, this would allow higher-risk renewable energy sources to be included.
The use of renewable energy sources for heating amounts to 34.6 TWh in 2020. This represents an
increase of 16 TWh compared to 2005. Of this amount, 9.5 TWh would be used for district heating, in
which wood would account for 6.6 TWh. A total of 25.1 TWh would be used to heat individual houses
(FINBIOs Publication 46, 2010).
In addition, all counties in Finland have made their areal biomass use strategies up 2015 and 2020,
even most of cities and municipalities. More information can get via related associations and biomass
areal organizations (www.bioenergia.fi, www.benet.fi, www.josek.fi, www.metsakeskus.fi etc.).
The total energy consumption in Finland was 1 389 PJ or 386 TWh in 2011 (including power, heat and
transportation). Consumption of electricity amounted to 84.4 TWh and district heat 33.4 TWh.
Almost 30% of the total energy consumption is produced already today by renewable energy
sources. Bioenergy is the most significant source of renewable energy, accounting for approx. onefifth of Finland´s total energy consumption. Wood based energy is the most important renewables
and wood energy usage is growing the most, today the use is already almost as large as oil.
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DH Market Handbook Finland
Finland is one of the world leaders in the utilization of wood based energy and the development of
biomass combustion technologies and efficient fuel supply chains from the farm size up to world´s
biggest biomass plant. A cold climate, long distances and energy intensive industry explain why
Finland has relatively high demand for energy. The specific energy consumption per capita is high;
industry uses about half of the energy generated. An efficient and balanced energy system is crucial.
However, 70% of energy used in Finland is exported and 30% indigenous. Today, significant
indigenous energy sources are limited mainly to wood fuels, peat and hydropower, but the range will
be widened with wind, biogas, agricultural biomass, biofuels for transport and heat pumps. The use
of wood fuels is growing the most.
Fossil fuels and renewables 1970–2011, PJ
Source: Statistics Finland, Energy supply and consumption, www.stat.fi
In order to promote CHP production using biogas (reactor plants), wood fuels and wind energy a
market-based new feed-in tariff for electricity scheme was introduced, financed from the State
budget. In the feed-in tariff system, an electricity producer whose power plant is approved in the
system will receive a subsidy (feed-in tariff) for a maximum of twelve years. The feed-in tariff will be
equivalent to the difference between the target price and the market price of electricity. The tariff
will be paid only to new plants. The purpose of the subsidy in question is to promote investments in
wind power plants, biogas power plants and power plants fuelled with wood-based fuel, and it is
dimensioned so as to have the total amount of subsidies paid to the power plant for the feed-in tariff
periods to compensate for investment costs. One purpose of this subsidy is also to promote the
replacement of peat and coal with forest chips and other biomass. More about feed-in tariff and
investment grants in the chapter Regulation.
Feedstock
The main biomass fuels for CHP and heat-only plants are wood based fuels often mixed with peat.
Industrial by-products like black liquor, bark, cutter shavings and some saw dust are almost totally
used for energy purposes. The black liquor from pulp mills is the most important forest industry
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DH Market Handbook Finland
byproduct that is used in soda recovery units in energy production. Sawmills provide sawdust, bark
and some industrial and energy chips. Sawdust and dry cutter chips are used often also as the raw
material for pellets. In the future sawdust will also be used production of transportation biofuels. In
the energy production of forest industry the share of wood based fuels is 75% and in all industry over
40%. Bark is created typically in all forest industry. Wood chips from logging residues, small size trees
and stumps are typical wood based fuels for CHP/DH plants also in cities and municipalities. Forest
wood fuels straight transported to the energy plants have the greatest potential to increase the
biomass use for energy, too. In the year 2011 totally 86 TWh wood based fuels were used (liquid 37
TWh and solid 49 TWh), one fifth of the total energy consumption in Finland.
Finland is the forest and peatland country. Almost 70% of the area is covered by forest. The total
volume of growing stock is 2 205 million m3 (solid), of which 50% is pine, 30% spruce and 20% nonconiferous. The annual growth is over 100 mill. m3 (solid) and annual fellings for industry purposes is
55 mill. m3 (solid). Total drain is 71.5 mill. m3 (solid). These numbers are industrial round wood
contents, without branches, tree tops, unmerchantable round wood and stump and root wood,
which adds volumes around 20-40% more. Companies also import raw wood.
According to the estimation surveys, the theoretical maximum production potential of forest wood
fuel is 45 million m3 per annum. This potential corresponds to approximately 90 TWh. However, the
practical target is that the annual use of wood chips in CHP production and separate heat production
will be increased to 13.5 million m3 by 2020 (nREAP and Finnish Forest Research Institute,
www.metla.fi). This is equivalent to 25 TWh/90 PJ of fuel. Some 7.5 million m3 (solid) of wood chips
were used in 2011. So, there are still large energy source for using. Most of the forest chips are today
produced from logging residues and small-sized trees. Also the amount of wood fuel made from
stumps and roots increase. Nowadays forest chips consist of logging residues (36%), small-diameter
energy wood (29%), stumps (15%) and roundwood (20%).
Heat and power plants used solid wood fuels 16.8 mill. m3 (32 TWh) in 2011, the amount increased
3.4 mill. m3 from the year 2009. In addition, 6.7 mill. m3 (17 TWh) went to the separate office,
industry and small houses for energy purposes, mainly as firewood, chips and pellet. Of the solid
wood fuels used 7.5 mill. m3 was forest chips and 9.3 mill. m3 forest industry’s by-products. Pellet
production was almost 200 000 tons (60% exported) but production capacity can be increased up 1
million tons per year in near future if necessary.
Most of the forest chips is produced from small-sized trees and logging residues. Also the amount of
wood chips/crush made from stumps and roots will increase.
Biorefinery plants also use logging residues as raw material in liquid biofuel production. The first so
called the second generation biorefinery plant is planned and coming near future in Finland. One
large plant needs around 0.5-1.5 TWh wood fuels annually as a raw material.
Peatlands cover about 30% of Finland´s territory. Peat is growing annually more than used for energy
purposes, use is about 25 TWh per year. Most often peat is mixed with wood based fuels or coal at
power or CHP plants. It is good quality fuel, indigenous and low price fuel.
Finland has 2.3 million hectares arable farm land, of which 1.17 mill. hectares are used for food crops
and 0.64 mill. hectares for fodder. Approximately 0.1 mill. hectares are used for cultivating oil plants.
About 0.5-0.7 mill. hectares could be used for energy purposes without posing threat to food
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DH Market Handbook Finland
production. If 0.5 million hectares is thus used and assuming that the harvest yeld is 20 MWh/ha, this
would correspond to a potential of 10 TWh. Currently agricultural residues are only marginally used
for energy production. Up today maximum 20 000 hectares are used (reed canary grass etc.).
However, potential is quite large, for instance straw potential. It is estimated that 2.5 TWh can be
easily taken and 7 TWh when taking 20% of straw potential into energy use. Reed canary grass
grown in the fields is harvested dry in the spring, and usually compressed into large bales. These and
also straw bales are stored with care to wait for transportation to the energy plants where they are
crushed and then combusted amongst wood chips or peat.
Business Case
District heating accounts for almost 50 per cent of the total heating market. Half of house buildings
and offices are connected with district heating systems. Other half has their separate heating
systems. In main cities 80-90% of the heat demand for buildings is met by DH. Total district heat
production was 38.5 TWh in 2010 and it increases. There are about 150 companies which sell district
heat and over 400 medium and large scale energy plants - mainly CHP - which are using biomass
alone or mixed with peat or coal. Thermal power plants which only produce heat are used alongside
CHP plants. Finland is one of the world leaders in CHP with high levels of development in district
heating, industrial CHP and use of biomass. More than 70% of DH was generated in CHP plants and
35% electricity of the country. Length of the district heating networks is 12 600 kilometers and
increases annually by about 2-3%. Customers receive heat through the hot water circulating in the
district heating network. The hot water in the supply pipe releases heat to the heating and water
networks of the house with the customer’s heat exchanger. The specific heat consumption in district
heated buildings is 38.9 kWh/m3. This heat consumption includes also the heating of domestic hot
water. The CHP and heat-only plant investments continues.
Today wood based energy is the most important renewables in the total energy consumption and it
is growing also in the near future. 86 TWh wood energy was used in 2011 (liquid 37 TWh and solid 49
TWh). Solid wood fuels were used in energy plants 32 TWh/16.8 mill. m3 (often mixed with peat) and
in small houses 17 TWh/6.7 mill. m3. Carbon dioxide emissions from the production and use of
energy is today 50 million tons (almost 70 million tons in 2002). Total energy consumption by sources
in 2011: oil 24%, wood fuels 22%, nuclear energy 18%, coal 11%, natural gas 10%, peat 6%, net
imports of electricity 4%, hydro and wind power 3% and others 3%.
Fuel procurement for major biomass CHP plants of the forest industry and for energy plants of cities
is a demanding logistical entity, which is managed by forest machinery and transport companies
specialized in the field. The forest industry receives its timber and energy biomass as so-called
integrated procurement. This means that industrial pulp wood and energy biomass are harvested
and transported to the plants using mainly the same equipment. Large energy plants buy their fuels wood fuels, peat etc. - through logistics companies, while the fuels for heat entrepreneurs´ plants
(small and medium heat-only) are procured from nearby forests and delivered stakeholders.
So far, all forest chips and other material from the forest sites have been transported by truck
(maximum brutto weight on public roads 60 tons), expect in trials with railway and waterway
vehicles. A winter season with iced-over lake areas (3-4 months) will decrease the logistical
effectiveness of waterway system. In contrast, railway logistics offers more route options and yearround operation possibilities. The terminal operations are an especially essential part of railway
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DH Market Handbook Finland
logistics for keeping the train capacity in use. Public and forest road density is quite optimum in
Finland and serves operating possibilities almost year-around. Also seaports are year-around open
for fuel import and export.
In district heating and large-scale CHP units fuel deliveries must be reliable and on time. To secure
fuel availability, to reduce costs and to level out quality variations, large plants usually have a
multifuel boiler that uses bark, sawdust, forest wood fuels, pellet, peat etc. often mixed together or
with coal and sometimes with agriculture fuel materials. The combined use of fuels creates special
requirements for supply logistics and handling and blending the fuels at the plant. In addition to the
feeding lines for wood chips, peat etc., large plants often have separate receiving lines for such fuel
material as stumps, logging residues, logging residue bundles or energy grass bales. This material is
crushed at the plant with a crusher before feeding into conveyers and the boiler.
So, also biomass production and handling technologies and logistic system markets will serve huge
possibilities to the stakeholder´s business over the borders. The rapid development of technologies
will enable the production of high quality fuels, energy security, sustainable supplies, clean and
effective combustion processes and optimally-integrated solutions for the inhabitants of the
communities (households, offices, shops, service buildings and industry).
There already exists lot of long-period practical experience and knowledge about forest fuels, pellet
and peat procurement, logistics and combustion (Scandinavian fuels). But biofuels are also exported
and imported more and more. The fuel trade is global and the trend is to use different kind of mixed
fuels: Scandinavian fuels, miscathus sinensis, eucalyptus, bagasse, rice husk, straw, willow and other
energy feedstock. In general the major challenges with “new” biomass fuels are in fuel feeding and
burning properties: stability of fuel mass flow, ash behavior due to high alkaline content, chlorine etc.
Especially boiler design for those fuels will be the future challenge - but very feasible.
The trend for biomass and CHP/DH will be as follows: Already large capacity of CHP plants and
heating boilers and lot of new installations exists, around 50 CHP plants and 300 boilers have been
built since 2000, increase of biomass mainly in existing capacity, investments and modernizations
continue in larger CHP plants, estimated at least 50 small CHP and heat-only plants more would be
invested (size from 3 MWth up) and always multifuel boilers (fuelled by different kind of biomass with
peat, coal etc.). Also there are need to adapt power generation possibility into existing heat-only
plants in sawmills and municipalities. In CHP energy generation, a third of the fuel quantity is saved
compared to when they are produced separately. The emissions are reduced proportionally.
The construction investment costs of renewable energy plant are co-financed by the government
with grants of up to 40% (new technology). For the plants using BAU technologies, the co-financing
can be up to 30%. This financing applies to companies. Also there exists the feed-in tariff which is
paid only to new power plants. A power plant benefiting from the feed-in tariff would not be eligible
for any other State aid.
Usefull links:
•
Finnish Energy Industries (www.energia.fi)
•
Bioenergia Association with its members (www.bioenergia.fi)
•
Ministry of Employment and the Economy - Energy (www.tem.fi)
•
Ministry of Agriculture and Forestry (www.mmm.fi)
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DH Market Handbook Finland
•
Statistics Finland (www.stat.fi)
Market Environment
About half of Finland´s population lives in houses heated by district heat. Consequently, 55% of
district heat is used for heating homes. Heating of industrial buildings accounts for 10% of annual
consumption of district heat, and the remainder 35% is used by public buildings, offices and shops.
Almost 95% of apartment buildings and most public and commercial buildings are connected to the
district heating network. In single-family houses, a good 7% of the heating energy comes from district
heat. In larger towns, the market share of district heating is 80-90%.
There were 666 stationary heating plants whose capacity was 13 070 MW in 2010. More over, there
were 392 transportable heating plants with total capacity of 1 400 MW. Totally the heating capacity
feeding the district heat networks was 21 680 MW and 12 600 km of district heating pipe lines, the
length increased by 2,4 % during the year 2010. The total DH production was 38.5 TWh in 2010
(change 2009/2010 was +11.1%) and 33.4 TWh in 2011. This was 13% less than the year before, due
to warmer weather conditions. But the use of renewable energy sources in DH production exceeded
20% from 2010 to 2011. About 71.3 % of the heat production came through steam or gas turbines or
diesel units. The CHP plants produced electricity 16.5 TWh (+16.9%) and they produced 35%
electricity and more than 70% district heat used in the country. In total, fuels were used 65 TWh in
production of district heat and CHP production in 2010. Arithmetic average DH selling price was 61.5
€/MWh and weighted average 54.8 €/MWh in 2010 (Finnish Energy Industries, www.energia.fi). The
mean price of district heat inclusive of tax, including the energy fee and power charge rose by almost
17% in 2011 and it was 63.9 €/MWh. The price increase was particularly due to the rises in energy
taxes at the start of 2011. Taxes make up almost 30 per cent of the price of district heat.
Production of District Heat 1970–2011, TWh
Source: Finnish Energy Industries, www.energia.fi
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DH Market Handbook Finland
RES fuels share using DH/CHP production is 18% and mainly wood based fuels in Finland. Main target
trend is decrease the use of fossil fuels. Pressure is pointed to capital Helsinki area where coal and
natural gas are still highly dominant. For biomass trading there are European CEN standardization
rules which are used also in Finland. For instance CEN/TC 335 standards for solid biomass fuels
including EN 14961 standards for wood fuels. For biofuels the availability and prices of biomass raw
materials, logistics and other production costs play in important role when competing with fossil
fuels prices. The efficiency of biomass sales, price statistics systems to make them more up-to-date
will help the market to function. Market information will be produced better and better through a
portal, so that parties will be able to access almost in real time price information on energy raw
material. The most effective incentive for innovation is a market where broad diffusion of new
solutions happens quickly and open-mindedly. In addition to promoting research and development
activities, innovation policy aims to boost demand for innovations and thereby encourages
companies to develop more advanced products and services
.
Fuel Prices in District Heat Production, €/MWh (www.stat.fi)
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DH Market Handbook Finland
Finland is a long country between the 60 and 70 degrees north latitudes (length 1150 km) and one
third is called North Finland, of which almost half part is over the Arctic circle (see areal map).
Because of cold winter time and quite mild summer time the district heat demand and consumption
varies monthly (see picture). In addition, a variation depends on the part of the country, weather
conditions also differ from south to north. That´s why good insulation of CHPs and heat-only plants
district heating pipes improves energy efficiency and it is obligatory. The pipelines used in Finland
consist of two service pipes made of steel, surrounded by polyurethane thermal insulation. The
insulation layer is protected by an outer casing made of polyethylene plastic. A similar structure is
currently used also elsewhere in Europe, but the two-pipe design is a Finnish and Swedish speciality.
The structure of district heating pipes is standardized by means of European EN standards. However,
at present all one-pipe and two-pipe structures use the maximum insulation thickness, the so-called
series 3 specification. So, the thermal insulation on Finnish district heating pipes is thicker than in
other European countries.
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DH Market Handbook Finland
Also district cooling (DHC) is increasing, selling was last year 123 GWh and it was 13% more than year
before. Helsinki DHC system is the third biggest in Europe and Finnish company Fortum Ltd operates
Stockholm DHC system which is the second biggest in Europe.
Regulation
In Finland there is feed-in tariff for renewable electricity annually financed from the State budget.
The Act on Production Subsidy for Electricity Produced from Renewable Energy Sources (1396/2010)
lays down provisions on a feed-in tariff system for which power plants fuelled with wind, biogas,
forest chips and wood-based fuels meeting the prescribed preconditions could be approved.
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DH Market Handbook Finland
In the feed-in tariff system, an electricity producer whose power or CHP plant is approved in the
system will receive a subsidy (feed-in tariff) for a maximum of twelve years. The subsidy varies on the
basis of a three-month electricity market price or the market price of emission allowances. The
producer is paid a feed-in tariff, which is the difference between the target price and the spot market
price (last 3 months’ average) in accordance with the amount of electricity produced in a wind power
plant, a power plant using biogas and a power plant using wood-based fuel, approved for the feed-in
tariff system. The tariff will be paid only to new power plants or CHP plants. The target price for
electricity produced from biogas, wood fuels and wind covered by the feed-in tariff scheme is €83.50
per megawatt hour.
In CHP production, in addition, a heat premium of €50/MWh is paid for electricity produced from
biogas and €20/MWh from wood energy by way of a supplement to the feed-in tariff. The cost of the
biogas electricity support scheme is estimated at around €2 million in 2011 and around €10 million in
2020 if the market price for electricity is €50/MWh. If the electricity producer is not using feed-in
tariff system, the plant owner can get fixed subsidy of €6.90/MWh for wood fuels and €4.20/MWh
for biogas in power production.
The purpose of the subsidy in question is to promote investments in wind power plants, biogas
power plants and power plants fuelled with wood-based fuel, and it is dimensioned so as to have the
total amount of subsidies paid to the power plant for the feed-in tariff periods to compensate for
investment costs. One purpose of this subsidy is to promote the replacement of coal and peat with
wood based fuels and other biomass.
A power plant benefiting from the feed-in tariff would not be eligible for any other State aid like the
construction investment costs of renewable energy plant are co-financed by the government with
grants of up to 40%, new technologies. For the plants using BAU technologies, the co-financing can
be
up
to
30%.
This
financing
applies
to
companies
(http://www.finlex.fi/fi/laki/alkup/2007/20071313).
The Energy Market Authority approves power plants and CHP plants for the feed-in tariff system,
pays the feed-in tariff upon application, and manages other official tasks in the feed-in tariff system.
There exist different type of technical regulations and emission limits for power/CHP/DH/heat sector.
Further information can get via association Finnish Energy Industries (www.energia.fi).
Project Financing
Finland is member of the Eurozone, currency exchange risk for investors coming from other Eurozone
member countries is low. Finland´s economy is rated one of the best scores at Standard & Poor´s and
Moody´s (www.standardandpoors.com/home/en/eu and www.moodys.com). In addition Finland
was number one in World Economic Forum 2005 Competitiveness Rankings (www.weforum.org) and
one of the Least Corrupted Nations in the World: number one in 2007 and number two in 2011
(http://cpi.transparency.org/cpi2011/results/). Finland´s credit rating is AAA (T&C Assessment /
Standard & Poor's. GDP per capita is 38 000 € (2011). Common VAT is 23% but companies have
possibilities to get them back.
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DH Market Handbook Finland
There are plenty of international and national banks situated in Finland. Loan interest levels are
rather low but variable. The easiness of getting a credit by banks is very much dependent on
individual projects. Banks are familiar with bioenergy, and projects with renewables are highlighted
in the bank sector and state funding. Different kind of R&D, demonstration and invest programs exist
in the state level but also in the counties. It is the best to contact first to related energy and
bioenergy associations. Also average fuel prices have been collected by official organization Statistics
Finland (www.stat.fi), they are published also on special electrical market places, and 6 times per
year in “Bioenergia” magazine (www.bioenergia.fi). So called PIX-Index made by FOEX Indexes Ltd
(www.foex.fi) shows the monthly prices of wood fuel chips, pellet, pulp, paper, paperboard etc. in
the Nordic markets.
In EU the competition rules are generally divided into two parts: regulations applying to the use of
public support (government support) and regulations related to the conduct of businesses.
Investments between the OECD member countries are regulated by the organization's so-called
National Treatment Instrument, Code of Liberalisation of Current Invisible Operations and Code of
Liberalisation of Capital Movements, and the Guidelines for Multinational Enterprises, of which the
latter is still only recommendations. The Ministry for Foreign Affairs of Finland
(www.formin.finland.fi) serves a good way to get knowledge and information about trade and
partnership possibilities for national and international business cases. By international comparison
concerning the number of investment agreements, Finland ranks among the middle group together
with Sweden, Denmark, Austria and Belgium. At the moment the number of valid agreements is
somewhat over 50. Germany, Great Britain and Switzerland have the most comprehensive networks
of agreements, each with well over one hundred agreements.
Partnership with Finnish companies is also worth while. Finpro (www.finpro.fi) trade supporting
organization has 400 professionals in almost 50 countries. It opens up future business opportunities
by understanding changes in international markets. It serves clients by enabling them to be in the
right markets at the right time with a competitive concept and offering. State owned Tekes
(www.tekes.fi) is specializing in funding developing and demonstration projects in Finland like new
technologies into the plants, handling systems, fuel transport and production technologies and
logistics etc.
The specific energy project financing institution is the Ministry of Employment and the Economy
(www.tem.fi). It offers different kind of supports in financing investing and development projects
dealing with renewable sources in Finland. The maximum energy subsidy per cents granted by the
Ministry of Employment and the Economy are 40% when invest new technology or energy saving
appliances for plants using renewables and 30% when invest ordinary technologies and 30% when
invest technologies are decreasing environmental disadvantages. In practical typical public energy
grants are 10-15% for heating plants, 15-20% for landfill gas plant, 10-20% for wood chips or
industrial waste wood production machineries etc.
Usefull links:
•
Ministry for Foreign Affairs of Finland (www.formin.finland.fi)
•
Ministry of Employment and the Economy (www.tem.fi)
•
Finpro (www.finpro.fi)

Tekes (www.tekes.fi)
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DH Market Handbook Finland
•
•


Finnish Energy Industries (www.energia.fi)
Bioenergia Association with its members (www.bioenergia.fi)
Statistics Finland (www.stat.fi)
Fuel PIX-Indexes (www.foex.fi)
Readiness for Uptake
Finland is one of the world’s leading users of renewable sources of energy, especially bioenergy. For
instance wood based fuels production systems with different kind and size machinery fleets, logistic
systems and operation education are all well-known in the area and there exist high level and
practical knowledge and information. Also fuel procurement technology and boiler design and
manufacturing are globally well-known. When planning to invest or make business into CHP/DHC
sector or fuel procurement technologies and equipment stakeholders, it is the best to contact first to
related associations.
Today, over 400 medium and large scale biomass CHP and heat-only plants are operating in the
country. In the beginning of the year 2010 there were 48 DH companies which sold district
heat mostly produced in CHP plants. 54 DH companies sold heat produced in heat boilers. In addition
at least 200 private heat entrepreneurs hold and sell heat energy from their small-scale heat-only
plants to neighbourhood. Normally company owns several energy plants. You can see modern
bioenergy plants and technologies everywhere in practice, from farm size up to the world´s biggest
biomass power plant. Many universities, institutes, schools and private companies provide education
and training in energy and bioenergy know-how and technology, from the practical field courses to
the highest level of scientific research. Finn-made combined heat and power plants, all scale boiler
technologies, and modern harvesting and transport technologies for biomass are known worldwide.
It is easy to contact companies and public authorities when you are planning cross border project
into Finland or partnership possibilities with Finnish companies for global business.
Usefull links:
Facts and Figures:

Official Finnish Statistics (www.stat.fi)

Common information (www.visitfinland.com)

Energy Statistics in Finland (www.energia.fi)

European Biomass Statistics (www.aebiom.org)

European Forestry Statistics (www.efi.fi)

Forestry Statistics in Finland (www.smy.fi)

Forestry R&D in Finland (www.metla.fi, www.metsateho.fi and www.vtt.fi)

Energy R&D in Finland (www.vtt.fi)

Agriculture Statistics and R&D in Finland (www.mtt.fi)

Forest Industry Statistics (www.foresindustries.fi)

Price indexes for wood based fuels and forestry products in Nordic (www.foex.fi)

European Biomass Supply Chains (www.eubionet.net)

Renewable Heating and Cooling - European Technology Platform (www.rhc-platform.org)
Associations and areal biomass development organizations:
•
Finnish Energy Industries (www.energia.fi)
•
Bioenergia (www.bioenergia.fi)
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DH Market Handbook Finland
•
Finnish Biogas Association (www.biokaasuyhdistys.net)
•
Finnish Gas Association (www.kaasuyhdistys.fi)

Benet Ltd, Central and Southern Finland (www.benet.fi)

Josek Ltd , Eastern Finland (www.josek.fi)

Forest areal projects (www.metsakeskus.fi)
Institutions:
•
Ministry of Employment and the Economy - Energy (www.tem.fi)
•
Ministry of Agriculture and Forestry (www.mmm.fi)
•
Ministry for Foreign Affairs of Finland (www.formin.finland.fi)
•
Finnish Forest Research Institute (www.metla.fi)
•
VTT Technical Research Centre of Finland (www.vtt.fi)
•
Motiva (www.motiva.fi)

Tekes (www.tekes.fi)
Companies:

There are hundreds of energy and bioenergy CHP and heat-only plant companies and
technology manufacture companies. Internet addresses exist under Associations links.
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