Finland to Push for Renewable, Wind Power With Tariffs

(Corrects unit on power capacity in seventh paragraph in story published on Sept. 16.)

Sept. 16 (Bloomberg) -- Finland will promote renewable energy with fixed prices for wind and biogas power to encourage producers to meet emission targets set by the European Union.

Feed-in tariffs, a set price guaranteed to producers, come into force on Jan. 1 and will last for 12 years, the government in Helsinki said today in an e-mailed statement.

Finland is seeking ways to add non-polluting power generation to meet a need in a country that consumes per capita more than twice the electricity used by Germany because of its cold climate and energy-intensive industries such as papermaking. Finland, which currently has four nuclear reactors and is building a fifth, also in July approved permits for two more units scheduled to come online in the 2020s.

The country must increase the share of renewable energy to 38 percent by 2020 from about 28 percent in 2008 to help Europe reduce its emissions of carbon dioxide, a gas blamed for warming the planet, according to a plan by members of the European Union. The Nordic country will also reduce energy demand to help meet the goal, the government has said.

The feed tariffs will increase wind power in Finland to 6 terawatt-hours by 2020, the government said. Wind power accounted for 0.3 percent of the 80.8 terawatt-hours of electricity consumed in 2009, Finnish Energy Industries said on its website. Renewable generation increased 15 percent in 2008, Statistics Finland data shows.

To Parliament

Finland is seeking alternative sources of energy to supplement nuclear power because it lacks the oil and hydropower supplies of neighbors such as Russia and Norway, which gets almost all of its electricity from water.

The motion will tomorrow be sent to parliament for approval. Finland had 118 wind turbines at the end of 2009 with a combined capacity of 147 megawatts, the Finnish Wind Power Association said on its website.

The target for the feed-in tariffs will be 83.50 euros ($109) a megawatt-hour, the government said. Electricity from biogas will get an additional 50 euros a megawatt-hour for combined heat and power generators. For the first three years, wind power would be paid 105 euros a megawatt-hour to ensure implementation, the government said.

Finland imports about 15 percent of the electricity used in the country. Fortum Oyj, Finland’s biggest utility, owns stakes in wind power generators Tunturituuli Oy and Hyoetytuuli Oy as well as a stake in a wind plant in Olkiluoto, Finland.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net