Market Status: Finland - New law raises hopes for Finnish wind renaissance

FINLAND: The introduction of a feed-in tariff (FIT) for wind power, which was approved by the Finnish parliament in December, promises to create a transparent legal framework capable of attracting new investors and significant amounts of capital to the sector over the next few years.

by Gerard O'Dwyer 1 March 2011

The new law, subject to EU approval, could be in force by May. The proposed tariff is EUR83.5/MWh for 12 years. A kick-off bonus will be paid to projects that start producing energy in the first two years after the law comes into force. The special tariff would be set at EUR105.3/MWh for three years, after which it will revert to the standard rate for the remaining nine years.

The Finnish government believes that the new law will drive capital investment in new wind farms to record levels. The immediate prospects for wind power growth in 2011 are positive, based on data supplied by the central planning office to the employment and economy ministry in mid-January. Applications have been made for projects totalling more than 10GW of installed capacity.

Early days

However, more than 80% of this prospective capacity relates to new onshore and offshore wind applications that are still at the pre-feasibility study stage and not expected to reach the environmental impact assessment point for several years.

The ministry is confident that the government's ambition to grow installed wind capacity to 2.5GW by 2020 remains a viable objective. But, even with the new legislation now in place, this target may be difficult to reach. In 2005, the government had projected to have 600MW of installed capacity by 2010. In reality, the total for last year was 197MW, with 130 turbines in place generating 0.3% of Finnish electricity. Installed capacity was 147MW by end-2009.

Some progress

Several wind projects were completed in 2010, including developer Rajakiiri Oy's onshore wind farm in the harbour area of Roytta in north-western Finland, which saw the installation of eight Siemens 3.6MW turbines with a total capacity of 28.8MW.

Suomen Hyotytuuli completed the phase-four extension to its onshore wind farm at Raahe, installing four 2.4MW Siemens turbines to increase capacity by 9.2MW. The firm completed its Pori offshore prototype project, featuring a Siemens 2.3MW turbine at Tahkoluoto, west of Pori harbour in mid-western Finland.

On Finland's south-eastern coast, Haminan Energia completed the installation of four 3MW WinWind turbines in and around Hamina harbour, Finland's principal port for heavy goods exports to Russia.