IEA Pushes for Renewables and Nuclear Power

In a review of Finnish energy policies launched, the International Energy Agency praised Finland for its commitment to a sustainable energy future. With its energy-intensive industries and its cold climate, Finland’s energy consumption per capita is the highest in the IEA. Yet the IEA noted that Finland’s energy policy framework was broad and coherent, covering all sectors and paving the way for a more sustainable energy system in the longer term.

“Finland is highly dependent on imported fossil fuels, making security of supply a priority,” IEA Executive Director Maria van der Hoeven said as she presented the report in Helsinki. “Commendably, the government’s principal long-term energy security goal is clearly tied to another key pillar of its energy policy – the decarbonisation of its economy, largely by developing cleaner means of energy production and consumption.”

The report, Energy Policies of IEA Countries – Finland 2013 Review, notes that Finland has an ambitious renewable energy programme and aims to meet 38 percent of its final energy consumption from renewable sources by 2020. Finland is the most forested country in Europe, and biomass will thus play a central role in meeting the target. Yet the report also highlights serious IEA concerns about potential EU legislation regarding the sustainability of biomass, which could bring about a great deal of administrative burden for sustainability certification schemes.

Finland is one of few IEA countries with plans to expand its nuclear capacity, and parliament has approved the construction of two additional nuclear power plants. If all planned projects (including the Olkiluoto 3 plant currently under construction) are completed, the share of electricity produced by nuclear in Finland could double by 2025, reaching around 60 percent. The report attributes the success of Finland’s nuclear programme to the government’s effective and inclusive planning and consenting regime, and to the high level of trust that the population has in its government due to its top-of-the-league ranking in terms of transparency and absence of corruption.

Ms. Van der Hoeven cautioned that energy policy could no longer be developed at a national level only, and that Finland should continue to further the integration of its natural gas and electricity markets to regional markets by means of EU-supported infrastructure projects and closer cooperation with its neighbours. Ms. Van der Hoeven highlighted the success of the regional integration of Nordic electricity markets, Nord Pool, but added that Finland’s gas market remained severely constrained by its lack of supply diversity and import infrastructure. She stressed that “Finland should push forward with regional opportunities in the context of the Baltic Energy Market Interconnection Plan”, which includes the possible construction of an LNG terminal in the Eastern Baltic region.

Among its key recommendations, the IEA report calls for:
•    Ensuring that regulatory barriers do not impede the government’s key policy pillars of bioenergy and nuclear energy, which are key to addressing energy security concerns in a comprehensive and sustainable manner;
•    A sustained drive to build on energy efficiency improvements, notably through a stronger focus on efficiencies in the transport sector;
•    The development of a regional gas market, building on the example of its successful regional integration in electricity markets.