Energy Policies of IEA Countries: Finland 2007

Faced with considerable challenges related to its geography and size, Finland’s 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 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 do not 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. This review takes an in-depth look at Finland’s energy policy today, highlighting energy efficiency and energy R&D.