Electricity sector in Finland

The electricity sector in Finland relies on nuclear power, forest industry black liquor and wood consumption, cogeneration and electricity import from neighboring countries. In 2008 the consumption of electricity in Finland was 17 036 kWh/person. The European union (15) average was 7 409 kWh/person.[1] Co-generation of heat and electricity for industry process heat and district heating is common in Finland.

Nuclear power in Finland is a major source of electricity. A third reactor is under construction in Olkiluoto, with a fourth reactor planned. A third plant in Pyhäjoki is also approved and in planning.

Consumption and import

Industry was the majority consumer of electricity between 1990 and 2005 with 52-54% of total consumption. The forest industry alone consumed 30-32%.[2]

Between 2000 and 2006, up to 7 TWh per year was imported from Sweden and up to 11.5 TWh from Russia. Net imports during this time varied between 7 TWh to Sweden and 7 TWh from Sweden, and 4 to 11 TWh from Russia. Since 2007, some electricity has also been imported from Estonia.[3]

In 2012, most of the imports were from Sweden (14.4 TWh net import) with Russia also contributing to the net imbalance (4.4 TWh import only), while exports to Estonia were larger than imports (1.1 TWh net export).[4]

Electricity in Finland TWh [4][5][6]
Year	Consumption	Production	Netimport
2000	79	67	12
2001	81	71	10
2002	84	72	12
2003	85	80	5
2004	87	82	5
2005	85	68	17
2006	90	79	11
2007	90	78	13
2008	87	74	13
2009	81	69	12
2010	88	77	11
2011	84	70	14
2012	85	67	17
2013	84	68	16
2014	83	65	18
2015	82	67	16
2016	85	66	19
2017	85	65	20
2018	87	68	20
2019^*	86	66	20

^ Preliminary data

Capacity

As of 2020, the total capacity of power generation in Finland is 17.5 GW.[7] However, not all of that is available at the same time and an increasing amount is intermittent generation, mostly from wind power (see below).

The national grid operator Fingrid, together with TSOs from other Nordic countries, produces yearly estimates about the availability of power in the winter demand peak. In 2019-2020 they estimated a peak Finnish demand of 15.3 GW, during which Finland would have 11.9 GW of production capacity, not including capacity reserves. That would have meant a shortfall of 3.4 GW to be imported from neighbors.[8] Due to a mild winter and industrial strikes the actual demand peak was only 12.4 GW and availability was never in question. No capacity reserve was activated.[9]

Mode of production

Finland electricity by agent in 2019

Electricity by mode of production (%)[6]
Year	Hydro	Wind	Solar	Nuclear	Coal	Oil	Gas	Peat	Wood	Other	Imports
2005	15.9%	0.2%	0.0%	26.4%	7.2%	0.5%	12.9%	5.0%	10.3%	1.7%	20.1%
2006	12.6%	0.2%	0.0%	24.4%	16.9%	0.5%	13.3%	6.9%	11.1%	1.5%	12.7%
2007	15.5%	0.2%	0.0%	24.9%	14.4%	0.5%	11.3%	7.7%	10.1%	1.7%	13.9%
2008	19.4%	0.3%	0.0%	25.3%	9.1%	0.7%	12.3%	5.6%	10.9%	1.8%	14.6%
2009	15.5%	0.3%	0.0%	27.8%	12.8%	0.6%	11.8%	5.1%	9.7%	1.6%	14.9%
2010	14.5%	0.3%	0.0%	25.0%	15.5%	0.5%	12.5%	6.7%	11.4%	1.6%	12.0%
2011	14.6%	0.6%	0.0%	26.4%	10.8%	0.5%	10.9%	6.0%	12.0%	1.8%	16.4%
2012	19.6%	0.6%	0.0%	25.9%	7.8%	0.3%	7.7%	4.0%	11.8%	1.8%	20.5%
2013	15.1%	0.9%	0.0%	27.0%	11.9%	0.2%	7.9%	3.5%	12.8%	2.0%	18.7%
2014	15.9%	1.3%	0.0%	27.1%	8.9%	0.2%	6.5%	3.8%	12.6%	2.0%	21.5%
2015	20.1%	2.8%	0.0%	27.1%	5.8%	0.2%	6.2%	3.5%	12.3%	2.2%	19.8%
2016	18.4%	3.6%	0.0%	26.2%	7.7%	0.2%	4.3%	3.2%	12.0%	2.3%	22.3%
2017	17.1%	5.6%	0.1%	25.2%	6.5%	0.2%	3.8%	3.0%	12.3%	2.2%	23.9%
2018	15.0%	6.7%	0.1%	25.0%	6.2%	0.3%	4.7%	3.7%	12.7%	2.8%	22.8%
2019	14.2%	7.0%	0.2%	26.6%	4.8%	0.3%	4.4%	3.3%	13.5%	2.5%	23.3%

Fossil fuels

Except for peat, which is variously classed as either a fossil fuel or a slow-renewable fuel, Finland imports all the fossil fuels used for electricity production. Coal and natural gas account for most of the production, with some oil generators acting mostly as reserve. The use of fossil fuels has fallen from highs over 30% in 2003-2004 to 20% or below in 2012-2014. This is largely a consequence of cheap imported electricity, although domestic renewables have also increased in their share of production. [10]

Nuclear power

Olkiluoto

Loviisa

Hanhikivi

Nuclear power plants in Finland (view)
 Active plants
 Planned plants

As of 2019, Finland has four nuclear reactors in two power plants, all located on the shores of the Baltic Sea, and providing about 30% of the country's electricity. The first reactor came into operation in 1977.[11] A fifth reactor is under construction, scheduled to begin commercial operation in February 2022,[12] and a sixth reactor is planned. If all planned projects are completed, the share of electricity produced by nuclear could double, reaching around 60%.[11]

Finland's nuclear reactors are among the world's most productive, with an average capacity factor of 95% in the 2010s.[11]

Renewable energy

Between 2005-2014, Finland produced 25-30% of electricity as a percentage of demand from renewable energy. The largest source is hydropower (15-20%) which fluctuates yearly depending on rainfall, causing the share of renewable generation to also vary. Other major sources are wood-based energy resources like black liquor from the forest industry, accounting for approximately 12% on average. In recent years wind power (see below) has also gained a foothold. [10][13]

Wind power

In 2017, Finland covered 5.6% of the yearly electricity demand with wind power production, up from 3.6%, 2.8% and 1.3% in the preceding years.[14][15][16] As of November 2017, the record peak was 1.5 GW on November 8, when domestic wind power covered 14% of the hourly electricity demand.[17]

EU and Finland wind energy capacity (MW)[18][19][20][21][22][23][24][25][26][27][28]

Country	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007	2006	2005	2004	2003	2002	2001	2000	1999	1998
EU-27	191,579	178,243	168,116	153,308	141,158	128,751	117,289	106,454	93,957	84,074	74,767	64,712	56,517	48,069	40,511	34,383	28,599	23,159	17,315	12,887	9,678	6,453
Finland	2,284	2,041	2,113	1,539	1,001	627	448	288	199	197	147	142	109	86	82	82	52	43	39	38	38	17

In 2014 the government was planning to reduce local municipal income from wind power by taking half of the tax income to the state (tax of real estate). This was suggested since government was afraid that the wind power market was overheated in Finland. The reduced tax was meant to lower interest in wind power investments in the municipalities.[29]

After 2017 Finnish renewable energy subsidies lapsed after two years of record growth in wind installations. The government had started negotiations about an auction system to replace them, but did not complete the process before the previous system expired. 2018 was expected to see little growth in wind generation as a result.[30]

In late 2018 the Government held an auction for up to 1.4 TWh of annual renewable electricity generation. All the bids received were for wind projects. In March 2019 the results were announced with seven projects totaling 1.36 TWh accepted. The average winning premium was 2.49 €/MWh, with successful bids ranging from 1.27 to 3.97 €/MWh.[31]

Companies

Production

Major producers in Finland include: Fortum, Pohjolan Voima, Teollisuuden Voima and Helsingin Energia.

Market

Nord Pool Spot is the shared power market for Finland and nearby countries.

Transmission

Fingrid Oyj is a Finnish national electricity transmission grid operator.

Distribution

Major distributors are: Helen Oy, Caruna and Elenia. Other companies are Savon Voima (Savo), Pohjois-Karjalan Sähkö (Northern Karelia, Järvi-Suomen Energia (Central Finland), Kymenlaakson Sähkö (Kymenlaakso) and Loiste (Kajaani and Sotkamo).[32][33]

Caruna in the south of Finland is owned mostly (80%) by Australian and Dutch holding and property companies. In 2017 Caruna's turn-over was €145 million and state tax rate 4 % (€6 million). In 2017 Caruna paid its stakeholders 8.17 % interest (77 million) while market loans were 1.5–3 % interest. [34] Company interest cost were reduced from the taxable income based on Sipilä Cabinet taxation rules.

Politics

In 2016 there has been renewed discussion about Finland's energy policy. Finland imports over 20% of the electricity used at peak usage. For example, in the hour between 17-18 on January 7, 2016, during a period of extreme cold, Finland imported 4,300 MW (28.5%) out of a record 15,100 MW of total usage (average over 1 hour).[35] The delays in the construction of the third reactor at the Olkiluoto Nuclear Power Plant (est. 1,600 MWe when completed), which was projected to be operating commercially by 2010 but is now being estimated to be completed no earlier than 2018, have caused a significant domestic energy production deficit. A consortium of Finnish industry and power companies called Fennovoima has applied and been granted a permission to build another new nuclear power plant, delivered by Russia's Rosatom, which also has a 1/3 stake on the power plant. This has caused some concern among observers about Russia being able to manipulate Nordic electricity prices or use the power plant as a leverage in conflict situations. The plant is estimated to be operational by 2024 and projected to produce 1,200 MW of electricity.

The government of Finland has attempted to decrease the dependency on Russian energy by investing heavily in wind power, solar power and efficient energy use, but these measures have hardly been effective.[36] The Finnish Security Intelligence Service (Supo) indicated in 2016 that foreign intelligence activity in Finland was aimed at influencing decision-making in energy policy.[37]

See also

• Energy in Finland
• Nordic energy market
• Economy of Finland

References

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