Europe: Finland considers fixed prices

A mandated power purchase price for wind power to run for ten years may be introduced in Finland in 2011, says Jukka Ruusunen, the CEO of Finnish transmission system operator Fingrid. The target price is EUR83.50/MWh and generators would be guaranteed access to the grid for their output. A working group looking into the proposal was due to report its findings last month.

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The price is likely to drop for new turbines coming online each year as wind capacity grows, says Ruusunen. "I do not believe we are talking about a flat rate here," he says. "The current discussion is more focused on the capital costs of onshore and offshore projects rather than setting rates according to whether one site has more wind advantage than another site. The rates are more likely to be set according to the capital cost and risks attaching to the specific onshore and offshore wind farm projects," says Ruusunen.

The government has no plans "at this stage" to place a cap on the total budget for the program. The priority is to build 2000 MW to 2400 MW of new wind power capacity by 2020, says Mauri Pekkarinen, Finland's economic affairs minister. The government is considering a windfall tax on nuclear and hydro power generation to fund the difference between market prices and the price proposed for wind power. The tax is expected to raise EUR300 million. The market price, according to Pekkarinen's ministry is EUR50 per MWh, resulting in a premium for wind of EUR33.5/MWh, it says.

"It's up to the Finnish government to create an environment supportive of investment. Industry cannot absorb much more taxation. The energy industry is ready to make significant investments to achieve Finland's climate goals, keep the price of energy at a reasonable level and increase the security of supply for energy and electricity," says Juha Naukkarinen, the head of Finnish Energy Industries.

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