Factsheet: Production subsidies for renewable electricity

Production subsidies for renewable electricity

Key Information
Full name of Instrument & Measure (English): 
The Act on Production Subsidy for Electricity Produced from Renewable Energy Sources (1396/2010) & Decree on Production Subsidy for Electricity Produced from Renewable Energy Sources (1397/2010)
Full name of Instrument & Measure (native language): 
Uusiutuvilla energialähteillä tuotetun sähkön tuotantotuki
Description: 
A feed-in tariff system for which power plants fuelled with wind, biogas, forest chips and wood-based fuels meeting the prescribed preconditions could be approved. In the feed-in tariff system, an electricity producer whose power plant is approved in the system will receive a subsidy (feed-in tariff) for a maximum of twelve years. The subsidy varies on the basis of a three-month electricity market price or the market price of emission allowances. The producer is paid a feed-in tariff, which is the difference between the target price and the spot market price (last 3 months’ average) in accordance with the amount of electricity produced in a wind power plant, a power plant using biogas and a power plant using wood-based fuel, approved for the feed-in tariff system. For electricity produced in a power plant using wood-based fuel or a biogas power plant, an increased feed-in tariff is paid in the form of a standard heat premium if heat is produced for utilisation and the overall efficiency of the plant meets the required standards. The purpose of the subsidy in question is to promote investments in wind power plants, biogas power plants and power plants fuelled with wood-based fuel, and it is dimensioned so as to have the total amount of subsidies paid to the power plant for the feed-in tariff periods to compensate for investment costs. The feed-in tariff paid for electricity produced in a forest chip fuelled power plant included in the feed-in tariff system is designed to retain the competitiveness of the use of forest chips as fuel in the cogeneration of power and heat. The purpose of this subsidy is to promote the replacement of peat with forest chips. The Energy Authority approves power plants for the feed-in tariff system, pays the feed-in tariff upon application, and manages other official tasks in the feed-in tariff system.
Goal/Aim: 
Support renewable electricity

Sector/Topic targeted:

Responsible Authority: 
Energy Authority

Status:

Year Instrument & Measure Started: 
2010
Year Last Instrument & Measure was last Amended: 
2010