Energy situation and financial support for electricity
Russia’s war of aggression in Ukraine has led to problems with the price and availability of energy across Europe.
Electricity savings and possible power cuts
Finland needs a great deal of energy for heating, transport and industry. Especially in winter, there may be occasional power shortages. Factors affecting the availability of electricity include long periods of freezing temperatures with no wind, servicing disruptions at power plants, and the high demand for electricity in Central Europe.
If the demand for electricity exceeds the supply, controlled regional power cuts may be needed to prevent overloading the power grid. Reducing the use of electricity and avoiding consumption during peak hours helps to mitigate the risk of power outages.
The Government has proposed a temporary EUR 10 billion loan and guarantee scheme to stabilise the electricity market. The purpose of the programme is to ensure that actors playing a key role in the functioning of the electricity market have sufficient liquidity and are able to operate.
Learn more
- Saving Tips | Down a Degree campaign
- Information on possible power shortages | Ministry of Economic Affairs and Employment
- Information on electricity contracts, bills and markets (in Finnish) | Energy Authority
- Energy weather forecast (in Finnish) | Finnish Meteorological Institute
- Power outage | 72 Hours home preparedness
Fixed-term financial support for electricity
In winter, the costs of electricity and heating are exceptionally high. To alleviate the plight caused by high household energy prices, the Government has decided to implement various measures.
VAT rates on electricity are lowered from 24% to 10%. The reduced VAT rate only concerns electricity itself, not the transmission of electricity. Selling of electricity from 1 December 2022 to 30 April 2023 are subject to the reduced rate.
You may be entitled to the tax credit if the electricity bills for your permanent home exceed EUR 2,000 between 1 January and 30 April 2023. The tax credit does not cover the cost of electricity transmission. The tax credit is 60 per cent of those electricity expenses that exceed EUR 2,000.
Applications for the tax credit should be submitted to the Finnish Tax Administration.
Financial support for electricity is available to households that cannot fully make use of the fixed-term tax credit for electricity due to their low income.
Applications for fixed-term support should be submitted to Kela.
A government proposal for a lump-sum reimbursement for electricity costs is being circulated for comments. Consumers would not have to apply for the reimbursement separately, as electricity companies would deduct the sum from electricity bills automatically. The lump sum would not affect other forms of support for electricity costs.
In the proposed model, a reimbursement would be paid for 50 per cent of the part of consumers’ electricity bills that exceeds the threshold of EUR 90/month. The maximum reimbursement would be EUR 700 per month, and it would apply to electricity contracts where the price of electricity exceeds 10 cents per kilowatt-hour.
The model may still change after the consultation round. The deadline for submitting comments on the proposal is 22 January 2023. The goal is for the act to enter into force as soon as possible.
The Government is preparing a model similar to the lump-sum reimbursement for consumers to support limited liability housing companies that use electricity for heating and cover the costs of the electricity used for heating. The Government will submit a separate proposal on the matter.
The Government proposes that electricity companies grant an additional payment period of up to four months for electricity bills (for electricity consumed between 1 January and 30 April 2023) at the customer’s request. Non-consumer customers would be granted an additional payment period of up to 60 days from the original payment date of the bill.
The request for opinions specifically asks about length of the additional payment period for companies.