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Finland 2007 Review INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries

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Finland 2007 Review INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries Please note that this PDF is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/Textbase/about/copyright.asp FINLAND 2007 Review INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries FINLAND 2007 Review Energy Policies Faced with considerable challenges related to its geography and size, Finland’s Energy Policies of of IEA Countries sound energy policies do much to overcome its situation. The country leverages its small market where it can – such as by adopting or harmonising with EU directives and policies. To counter its relative isolation, Finland strengthened its position by becoming part of the larger Nordic electricity market and enhancing energy linkages. At the core, however, the country ensures energy security by relying on transparency and sound market signals to investors and customers, as well as by making good use of domestic sources of biomass and nuclear. As Finland continues to refine and enhance its energy policy, there are some FINLAND areas that warrant special attention. As nearly all fossil fuels are imported and all natural gas comes through a single interconnection, the government should continue to explore ways to diversify import sources and routes. The new nuclear power plant currently being built – the first in a liberalised market – will help safeguard energy security, though the construction delays necessitate continued monitoring. Subsidies for peat, a fuel in abundance in Finland, should be reconsidered, as they are unlikely to enhance energy security. On the other hand, the government should continue to explore ways to expand new renewables, building on the current stock of biomass and hydro. 2007 Review This book takes an in-depth look at Finland’s energy policy today and, through comparisons with good examples in other IEA countries, provides critiques and recommendations for improvements to guide the country towards a sustainable energy future. While the review provides comprehensive coverage of all topics, this thematic report highlights energy efficiency and energy R&D. Finland 2007 Review (61 2007 19 1 P1) €75 ISBN 978-92-64-03071-8 9:HSTCQE=UXU\V]: INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries FINLAND 2007 Review INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an inter national energy programme. It carries out a comprehensive programme of energy co-operation among twenty-seven of the OECD thirty member countries. The basic aims of the IEA are: n To maintain and improve systems for coping with oil supply disruptions. n To promote rational energy policies in a global context through co-operative relations with non-member countries, industry and inter national organisations. n To operate a permanent information system on the international oil market. n To improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the efficiency of energy use. n To promote international collaboration on energy technology. n To assist in the integration of environmental and energy policies. The IEA member countries are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. Poland is expected to become a member in 2008. The European Commission also participates in the work of the IEA. ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of thirty democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Republic of Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. The European Commission takes part in the work of the OECD. © OECD/IEA, 2008 International Energy Agency (IEA), Head of Communication and Information Offi ce, 9 rue de la Fédération, 75739 Paris Cedex 15, France. Please note that this publication is subject to specifi c restrictions that limit its use and distribution. The terms and conditions are available online at http://www.iea.org/Textbase/about/copyright.asp TABLE OF CONTENTS 1 EXECUTIVE SUMMARY .................................... 7 Security of Supply ................................................... 8 Energy Efficiency .................................................... 9 Energy R&D.......................................................... 10 Key Recommendations .............................................. 11 2 GENERAL ENERGY POLICY ................................ 13 Country Overview.................................................... 13 Supply-Demand Balance ............................................ 14 Government and Regulatory Institutions ........................... 18 Key Energy Policies .................................................. 21 Security of Supply ................................................... 22 Energy Taxes and Subsidies ......................................... 24 Critique .............................................................. 27 Recommendations ................................................... 29 3 ENERGY AND THE ENVIRONMENT ........................ 31 Carbon Dioxide Emissions Profile ................................... 31 Climate Change Policy .............................................. 33 Critique .............................................................. 37 Recommendations ................................................... 38 4 ENERGY EFFICIENCY ..................................... 39 Trends in Energy Use and Efficiency ................................ 39 Policies and Measures ............................................... 41 Critique .............................................................. 55 Recommendations ................................................... 60 5 RENEWABLES ........................................... 61 Supply-Demand Balance ............................................ 61 Policies and Measures ............................................... 64 Critique .............................................................. 66 Recommendations ................................................... 68 6 FOSSIL FUELS AND PEAT.................................. 69 Coal .................................................................. 69 Peat.................................................................. 71 3 Oil.................................................................... 73 Natural Gas .......................................................... 76 Critique .............................................................. 80 Recommendations ................................................... 83 7 ELECTRICITY ............................................. 85 Capacity, Generation and Demand ................................. 85 Market Design and Regulation...................................... 88 Industry Structure and Operations ................................. 92 Prices ................................................................ 96 Critique .............................................................. 98 Recommendations ................................................... 100 8 NUCLEAR ENERGY ............................................................... 103 Overview ............................................................ 103 Policy and Framework ............................................... 105 Fuel Cycle and Radioactive Waste Management ................... 106 Critique .............................................................. 107 Recommendations ................................................... 108 9 ENERGY RESEARCH & DEVELOPMENT................................... 111 Energy R&D Policies ................................................ 111 Energy R&D Organisations and Selected Projects .................. 115 Getting the Technology to Markets ................................. 121 International Collaboration ......................................... 122 Critique .............................................................. 122 Recommendations ................................................... 125 A ANNEX: ORGANISATION OF THE REVIEW .................. 127 Review Team......................................................... 127 Organisations Visited................................................ 128 Review Criteria ...................................................... 129 B ANNEX: ENERGY BALANCES AND KEY STATISTICAL DATA .... 131 C ANNEX: INTERNATIONAL ENERGY AGENCY “SHARED GOALS” .
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