The Energy Policy of Finland the Energy Policy of Finland - Term Paper Example

Finland Energy Policy The ministry responsible for energy in Finland is the Ministry of Employment and the Economy. Predictability and sustainabilityare characteristic of the energy policy objectives. In the past years, Finland has been one of the leading industrialized countries in the world in the use of renewable energy and in particular the use of bioenergy. For close to twenty years, the government of Finland has aimed at producing as much electricity as it can through the combined power plants and heat popularly known as CHP. In this regard, Finland ranks among the top countries in the world (Ministry of Employment and the Economy, 2011). The ministry has been capable of establishing and exceptional versatile and decentralized energy system; they are based on both small and large energy production plants and a variety of energy sources. Finland itself has been capable of developing a strong energy technology or the energy cluster and it has grown in importance. The country has been in the forefront in the decreasing unnecessary regulation and therefore it has created preconditions for the greater efficacy and internationalization among the Finland’s energy companies (Ministry of Employment and the Economy, 2011). The Finland energy policy is based on three fundamentals: environment, economy and energy. The core elements of the policy are to secure the energy supply, develop competitive prices, and to meet the European Union common Energy and Climate goals. Another important principle is the integration of the environmental goals, other types of sustainable developments with the economy of energy. It is imperative to note that at each stage of the programme, the prospective price, the availability of the imported energy, and the larger frequency in which the decisions are made at the international level affect the energy policy (Ministry of Employment and the Economy, 2011). The energy policy of Finland is implemented in regard to the drawn-up energy policy documents like the objectives that have been set in the governmental negotiations and the Government’s Energy Policy Programme. There are factors that underpin the realization of the Finland energy policy and they are special programmes such as the National Climate and Energy Strategy and the international commitments. The energy policy was adopted in 2008 and it is determined by the National Climate and Energy Strategy and its additional programmes. The drafting of the Climate and Energy Strategy was done in consideration of the principles that underlie the energy policy. The statistical sources and the research results at the national and international level were used in the strategic sketching and planning of the scenarios (Ministry of Employment and the Economy, 2011). The European role in the control of the energy policy in the last few years has increased significantly. The basis of the main framework of the Europe’s Energy and Climate Policy is on the decisions that were made in December 2008. The decisions included decreasing the greenhouse gas emissions by approximately 20 percent, increasing the share of the renewable energy to around a fifth of the total consumption (Finland in this case 38% of the share) and at the same time enhancing the energy efficiency by around 20 percent by 2020. Finland takes part in the supply systems security and the distribution of oil as it is necessitated by the International Energy Agency (IEA). Finland is bound by a number of organizations such as IAEA, EURATOM, and NEA and a broad based cooperation in sections such as the nuclear surveillance and nuclear energy (Ministry of Employment and the Economy, 2011). Finland Renewable Energy Policy Policy Background The European Energy Policy is supposed to the objective of a competitive, secure and sustainable supply of energy. If the European Union goes on with the current course, the key objective of the energy policy will be difficult to achieve. The European Commission enacted an energy policy for the region of Europe in January 2007. The energy policy was given support by a number of documents which had a variety of energy features. The support also entailed an action plan that was drafted to meet the main energy challenges that Europe faces. Each of the European citizens is supposed to be informed of the challenges and their participation in the mitigation of these challenges. Renewable energy assists in the mitigation of climate change and at the same time increasing the security of supply (European Commission, 2007). The aim of the National Action Plan for Renewable Energy Sources (RES) is to increase the utilization of biomass at a higher level. The commitments of National RES for the period 2015 and 2025, target at increasing the bioenergy utilization in heat and electricity production. At the present time, CHP with biofuels and biomass are widely used and the major policy objective is to extend the biofuels in the transport sector and RES-CHP-District heating schemes. The bioenergy policy framework for Finland has been effective although there are other RES that have potential in Finland; they have been less developed (European Commission, 2009). Support of the Policy Finland has taken into consideration the following measures to motivate the utilization of RES-E; (a) tax subsidies – the energy tax that the end users have been paying on RES-E has been exempted, (b) discretional investment subsidies - subsidies of up to 30 percent (wind gets a subsidy of 40%) are eligible for any new investments, and (c) guaranteed access for all the electricity producing plants, RES-E generators, and electricity to the grid. The exemptions are provided under certain conditions for the biofuels and the biogas used as motor fuel is exempted from the excise duty. Taxes that have been imposed on heat are evaluated on the basis of the input fuels (its net carbon emissions) and are null for the renewable energy sources. RES-E is further motivated by the direct biomass investment (European Commission, 2007). Peat plays a significant role in the Finland biomass sector; of the Finland’s 30.5 million hectares total land area, 30 percent of it is categorized as peat land. Peat is commonly utilized in CHP plants; it is imperative to note that peat is not a RES and it does count for the achievement of the Finland’s RES targets. In 2006, Helsinki City Council voted to have half of the public bus fleet in the city run on biodiesel that was made from animal fat, waste cooking oil, and biomass. The programme was to run for 3 years and it was projected to affect 700 vehicles and reduce the overall bus particle emissions by almost a half. In 2002, the Finland parliament gave approval for the building of the fifth nuclear power plant and to start its operations by 2009. However, the construction of the power plant was delayed (European Commission, 2009). The Key Actors of the Finland Renewable Energy Policy The primary responsibility for the energy efficiency policy and in particular the Renewables and Energy Efficiency Division is mandated to the Ministry of Employment and the Economy (MEE). MEE works in close collaboration with the Ministries of Transport and Communications, Finance, and the Environment. The responsibility for legislation of the building sector such as the energy efficiency requirements for buildings is given to the Ministry of the Environment (International Energy Agency, 2007). An implementing agency Motiva Oy was formed in 1993 to foresee the implementation of the energy efficiency policy in Finland. The company is state-owned and its duty is to promote energy efficiency, increase the uptake of the renewable energy sources and the promotion of the efficient utilization of materials. It plays a critical role in the voluntary energy agreements of the government. The company is involved in the preparation and marketing of these agreements and the development of services and tools to promote the implementation of these agreements. Motiva Oy also conducts annual sectoral report of the results and development and maintenance of a monitoring system (International Energy Agency, 2007). Key Issues Finland keeps on adjusting and refining its energy policies in order to promote the RES competitiveness. Finland motivates investments through energy tax exemptions and subsidies. Large scale hydropower and solid biomass rule the market and the share of biowaste is also increasing. Additional support is also being sought; the support is in form of the feed-in tariffs that are based on the green certificates and purchase obligations. The feed-in tariffs are been considered for the onshore wind power (European Commission, 2007). Policy Recommendations Since the Finland energy policy is adjusted frequently to promote RES competitiveness, an efficient framework is required to support the transition when the adjustments are made. The adjustments should be made in a way that they do not affect the overall aim of the energy policy. The energy sources and requirements are changing at a high rate and the energy policy should be capable of adjusting to these changes. As mentioned earlier, there are a number of factors that affect the effective implementation of the policy such as the international commitments and special programmes such as the National Climate and Energy Strategy. The international commitments play a critical role in the determination of what to adopt or not. The decisions made are basically made taking into consideration the international commitments guidelines. It is imperative to understand what the international entity wants to be implemented and therefore find means to integrate these changes. References European Commission. (2007). Finland – Renewable energy fact sheet. Retrieved from ec.europa.eu/energy/energy_policy/.../renewables/renewables_fi_en.pdf European Commission. (2009). Renewable energy policy review. Retrieved from http://www.iea.org/publications/free_new_Desc.asp?PUBS_ID=1924 International Energy Agency. (2007). Energy policies of IEA countries. France: IEA Publications. Ministry of Employment and the Economy. (2011). Energy. Retrieved from http://www.tem.fi/?l=en&s=2070 Read More