New Government Programme: The End of an Era for Wind Power in Finland?

On Wednesday 27 May 2015, Finland’s next government reached an agreement on its new government programme. One of the planned changes concerns Finland’s feed-in-tariff system, which is now worrying Finland’s wind power market–and with good reason.

Based on the current legislation, the Finnish feed-in-tariff is available for new wind farms to be built in Finland up to an aggregate power of 2,500 MVA. Approximately 72% of this capacity has already been reserved at this point.

The new proposal is to cut the quota from 2,500 MVA to 2,000 MVA. This means that there may be room for an additional 312 MVA. This is still unclear.

Is this now the end for new wind power developments? No, but we need clear guidelines and legislation on what will happen after the current subsidy programme.

In practice, this change will have no impact on the wind power projects to be installed during the next two to three years as they have already been admitted to the feed-in-tariff system. In fact, it means the ramping up of wind power faster than anyone expected. This is good news.

The bad news is that several wind power developers may face insolvency due to a lack of interest by international investors if there is no clear future for the next subsidy programme. Parliament should now focus on safeguarding the continuous construction of wind power beyond the current feed-in tariff programme.

I am positive that there are investors willing to invest in Finland even after the feed-in-tariff is no longer available. However, this will require clear and transparent discussion of the next subsidy arrangement. Otherwise, the whole wind farm sector will freeze after 2017.  This would mean that the whole development base of wind power, approximately 11,000 MW, could be wasted.