Renewable energy consumption in Finland exceeds the amount of imported fossil fuel energy
According to a renewable energy sector report published today, renewable energy represented a larger proportion of total energy consumption last year than the proportion of imported fossil fuels. The increase in the price of emission allowances will encourage renewable energy investment and use, while advanced technology will improve the profitability of wind energy investments.
Last year, renewable energy accounted for 37% of total energy consumption in Finland, while imported fossil fuel based energy accounted for 35%. For renewable energy use, this was an increase of two percentage points, or five terawatt hours (TWh), from 2017. Wood raw material accounts for 74% of renewable energy production, hydropower for 9%, heat pumps for 5% and wind power for 4%. Wood fuel is the largest individual source of energy with its 27% share. Eight million cubic metres of forest chips were used for energy production, representing an increase of 3% from 2017.
In the past two years, there has been an almost sixfold increase in the price of emission allowances. The price of emission allowances peaked in July at about EUR 29.50 per tonne of carbon dioxide. The three-month average for the quarter that ended in September was EUR 27.
Based on preliminary data from Statistics Finland, the gross value of production of enterprise groups engaged in the renewable energy sector was EUR 5.36 billion and the value added EUR 1.02 billion in 2018. Altogether 1,189 enterprises operated in the renewable energy sector at 1,784 sites, employing a total of 6,104 people.
Wind power generation more profitable than before
Technological advancement and the growing size of power plants have made wind power investments more profitable. Investments in solar power are also continuing to grow as households, businesses and farms significantly increase their investments in solar energy.
The need to reduce greenhouse gas emissions has a major impact on energy policy. Globally, investment in wind power, bioenergy and solar energy in particular is growing rapidly. At the same time, however, the use of fossil fuels continued to grow in 2018.
No improvement expected in employment
According to the SME barometer for the renewable energy sector, companies in the sector were significantly less optimistic about the general short-term outlook for the economy than those engaged in reference sectors or in the country at large. Estimates regarding the number of personnel were also clearly more negative than a year earlier.
In 2018, Finland reported a current account deficit of EUR 5.3 billion for energy products. The value of various energy products imported into Finland was EUR 10.7 billion. With a 61% share, Russia accounted for the highest share of imports by value. The value of energy products exported from Finland was EUR 5.4 billion, with other EU countries representing the largest export market.
Objectives of the Government Programme
According to the Government Programme, the Government will work to ensure that Finland is carbon neutral by 2035 and carbon negative soon after that. In order to achieve this goal, action will be taken to reduce emissions faster and to enhance carbon sinks. Reaching this target also requires tightening the emissions reduction obligation for 2030 to at least 55 per cent below the 1990 emissions level. The Government is also committed to reforming the climate policies of the European Union and Finland so that we can do our part to limit the global mean temperature increase to 1.5 degrees Celsius. In addition, Finland aims to be the world’s first fossil-free welfare society. With this in mind, electricity and heat production in Finland must be made nearly emissions-free by the end of the 2030s while also taking into account the perspectives of security of supply and servicing. Transport emissions must be at least halved from the 2005 level by 2030.
The renewable energy sector report and the SME sector barometer were published on 5 December 2019 in connection with an energy sector seminar held in Salo. The sector report discusses the current situation and outlook in the sector, while the sector barometer presents the results of the SME Barometer survey. The survey, carried out by the Federation of Finnish Enterprises, Finnvera Plc and the Ministry of Economic Affairs and Employment, examines the operations and economic operating environment of SMEs in Finland. In total, 6,133 companies responded to the SME barometer, 151 from the renewable energy sector.
Markku Alm, Sector Manager, Southwest Finland Centre for Economic Development, Transport and the Environment, tel. +358 40 086 4945
Katri Lehtonen, Development Director, Ministry of Economic Affairs and Employment, tel. +358 29 506 4926
The Sector Reports are a series of analytical reports on the economic situation and outlook in different sectors in Finland. The Sector Manager of each sector is responsible for compiling the report. Reports are based on the latest available national and international statistical data and foresight data.