Building additional capacity for power production
Additional electricity production capacity is needed not only to meet increased demand, but also to replace old fossil-fuel power plants. Furthermore, Finland can no longer rely on imports from Russia, as the strong growth of the St. Petersburg area means there is not enough electricity to be imported to Finland.
In addition to Olkiluoto 3, new nuclear power plant units are still needed by 2020 to ensure the required additional capacity. In view of the climate and energy policy objectives, it is better to construct nuclear power plants than coal-fired power plants for base load production.
Domestic solid biofuels should be used more in combined heat and power production, especially in district heating power plants in inland Finland and in major population centres. In terms of climate policy, it is recommended to use forest chips where feasible, which would allow the use of peat as part of the fuel mix. The more extensive use of reed canary grass is also justified in district heat production, primarily to replace heavy fuel oil.
The construction of hydropower plants should be increased in water systems that have already been partially harnessed, but not in waterways that are entirely in their natural state. There is additional potential for new hydropower especially on the Kemihaara region and Kollaja reservoirs.
What makes hydropower particularly valuable is its excellent regulating properties. Variations in electricity consumption create the need to regulate electricity supply, and on cold winter days hydropower can be used to replace extremely expensive gas turbine power in the production of additional electricity. Incineration of municipal waste is important because it helps reduce the amount of landfill waste. In Finland, approximately one million tonnes of waste that can be used for energy production is produced per year. Some 60 % of municipal waste is bio waste, which is regarded as renewable energy. Waste incineration helps reduce the use of fossil fuels in municipal heat and power production.
Finland could significantly increase the use of wind power in its coastal regions where wind conditions are suitable. Wind power construction costs are high, which is why it is important to choose locations for additional wind power units that enable maximum energy production. In Finland, the average peak utilisation time is about 2,000-2,200 hours a year, but in good locations this could be over 3,000 hours.
At the moment, wind power is not economically competitive without subsidies. Any subsidy policy should rely on long-term principles in order to provide proper conditions for additional construction. The most effective form of support is investment subsidies, provided the level of subsidy is the maximum 40 per cent permitted by regulations.
Utilising more Finnish government adopted a package to support renewable energy sources in Finland. The target for windpower is ambitious 2500 M should be in operation by 2020. The support mechanism in the package is Feed-in-tariff for renewable power production.
The level of the tariff is 83,50 €/ MWh. In order to speed up the investment, the tariff is higher i.e. 105,30 €/MWh for the first three years. The renewable energy package offer significantly new business opportunities for the member companies of the Federation of Finnish Technology Industries. This is particulary true for those companies, that are specialised in energy and environmental technology.
