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Finland

Finland

Cut in subsidies halts home market -- Finnish funding crisis

A financing crisis has hit the Finnish wind sector following the government's decision to lop FIM 20 million off wind's subsidy budget for 2001, reducing it to FIM 96 million. The budget cut rubs salt into an open wound: the subsidy level was already reduced from about 30% to 20% of capital costs. The only good news is that the reduction could have been greater. The Finnish Wind Power Association (FWPA) lobbied successfully to save FIM 10 million, though it calls the final result a "meagre compromise," says consultant Esa Holttinen of Electrowatt-Ekono.

The first project to suffer has been a two-turbine plant planned by provincial utility Kainuun Sähkö for the hilly regions of eastern Finland -- slated to use two 1.75 MW Vestas units (Windpower Monthly, October 2000), Holttinen says. With word from the trade and industry ministry that the utility would only receive 25% of the cost of the project instead of the 35% expected, Kainuun Sähkö backed out and began looking for other options in a more favourable wind regime, Holttinen says.

Other projects at stake due to the subsidy cuts are Hyötytuuli Oy's planned extension of its 8 MW wind farm with a 2 MW turbine, as well as Tunturituuli's 5 MW ski resort project in Ylläs, Lapland (Windpower Monthly, September 2000). "Altogether, the situation looks gloomy right now," says Holttinen.

The Finnish renewables lobby is working on a political solution. Holttinen points out that the Finnish wind industry -- including gear supplier Santasalo and generator suppliers ABB Motors and ABB Industry -- has brought Finland almost FIM 1 billion in exports. "This could grow five to tenfold during the next ten years," providing "maybe ten thousand new permanent jobs within the sector in just ten years," says the association.

Without any kind of support that is unlikely to happen, however, and the first Finnish wind turbine, WinWinD WWD-1, currently being assembled and tested in Oulu, will never be commercialised, warns Holttinen. Considering that Finland is at the climax of a long economic boom, he fails to understand the government's attitude, especially with Finland struggling to meet its Kyoto commitments.

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