There are no general instructions for grid operators as regards the connection of small RES plants. Since there are 70 different grid operators in Finland, the procedures vary a lot. The energy industry has published recommendations on this topic but these recommendations are not binding. As a consequence, RES developers need to spend additional time and resources in the grid access process to get adapted to the particular process. The recommendations are not binding but an increasing number of grid operators and electricity companies have started to publish their conditions and the situation is somewhat improving. However, this barrier remains an unresolved issue for small plants.

In Finland, the most relevant support scheme for small scale systems is an investment aid that covers up to 35% of the project costs. However, only companies and municipalities are eligible for this aid but no private persons. As a consequence owners from residential building and other private persons have no access to funding for small scale RES projects. The investment aid for private households should be funded by the Finnish Environmental Ministry but the ministry does not have sufficient funding. However, this barrier has been acknowledged and the ministries have had several working groups trying to design a net-metering system for small scale RES installations. PV-panel systems for detached houses are already feasible without financial support, when the electricity is used in the household and not sold outside.

If the owner of a small scale system uses the generated electricity for his own use, he does not need to pay for taxes and transfer fee for this amount of electricity. However, many smart meters that have been installed and that are necessary for calculating the generation and consumption take measurements only every hour. The users of the grid are thus treated differently. As a consequence it is difficult for the owners of such net meters to save sufficient money that their investments pays off. Furthermore, the net-billing in (1 hour) has not been implemented. In addition, the grid operators are in the process of renewing their pricing structures towards fixed or power based tariffs that can be very detrimental to small scale system profitability.

It is still difficult to find companies which would purchase the produced electricity. Those which exist take margins and sometimes billing fees which in addition reduce the margins of the producers. There is the plan to map down those companies which are willing to buy but this has not happened so far. There are some companies that offer about 6 ct/kWh to purchase solar power from producers, just to name an example, but more generally this barrier remains an issue. The Finnish Ministry of Economic Affairs and Employment, however, is on the position that as long as the margins and billing fees are reasonable, there should not be a problem. The view is that there wouldn’t be an incentive for this, if the companies would not have any financial benefits.

The new competitive bidding support scheme sets a minimum size for RES plants otherwise they are not eligible. That minimum size is lower than in the past but it is still relatively high (production has to be at least 800 MWh/a)]

Calculation scheme for the E-figure is an indicator for Energy Efficiency of a certain type of building, which also includes the locally produced energy. E-figure does not calculate energy that is produced not directly in the building but next to the building. As a consequence this creates limits on feasibility of many projects.

The Parliament has adopted legislation for a competitivie bidding support scheme in May 2018. The new scheme replaces the current feed-in tariff with a competitive bidding system, where different renewable sources of energy will be competing against each other. The new scheme will also end the feed-in tariff for biogas and wood chip power plants. The law provides for a framework for auctions. The Government may propose to the Parliament a new auction round in a budget hearing. So far, an auction of 1,4 TWh of annual production has been decided. The schedule of the auction depends on the EU notification procedure. The first round is estimated to be organised in December 2018. However, the annual production level up for auctioning is really modest. The industry would need a visibility of the targets and upcoming auction rounds .

The fuel levy sanction should be returned to its original purpose to be applied to fuel oil only.

Finnish air forces assess whether wind parks could disturb military radar communication systems. If this is their assessment then they will withhold their approval which is necessary to conclude the permission process. All applicants of wind power plants have to go through this process and the Finnish air force usually decides at the very end of the permission process. As a consequence, developers suffer to a large extent from lacking investment security and related financial risks independently whether the project is approved or not. Responsible authorities have shown a very restrictive approach in the past especially in case of larger wind power parks (approx. 11 % of all applications are not approved). If the approval is not given, the project either fails or project developers have to take a substantial share (about 30%) of the costs for modifying the existing radar systems (approx. 50,000 EUR per wind power plant), however, this possibility is offered only in one specific area in the western coast of Finland. This does not prevent the project in theory but leads to substantially higher costs and risks which in practice prevent many of the disapproved projects.

However, for some years now, the military has a special methodology which assesses whether radar systems are disturbed by wind power projects or not. For example, a project developer submits the required data to the military, the latter runs the data through a computer program, and then the developers receive information if the project would disturb radars or not. The project may gain the final approval from the military as soon as the developer has the specific locations/coordinates for turbines as well as their maximum heights. But if a developer needs to change the layout of the project later on, another approval is required. Also, the Finnish parliament enacted a special law for the region of Pohjonmaa (Ostrobothnia), which is very popular for wind projects. The law allows the establishment of wind projects, although there is a very clear radar disturbance. However, under the law the developers are also obliged to pay for a new radar system, which is basically an additional tax on the project. These sums have to be paid to the Finnish government per wind turbine. Still, the air forces have the power to block any project without trying to seek a solution that would be possible for both the wind power developer and the military. No information is given by the air forces as to which areas of a project site are problematic or if some turbines could be accepted. The approval from the military has to be sought in case of all projects but it varies greatly from area to area, whether the military can or cannot accept the project. Some parts of Finland are completely no-go-areas at the moment with current radar technology. The Ministry of Defence has ordered a study on the topic how military operations can be taken into account in the development of wind farms. Unfortunately, it seems that this process will not make it any easier to develop a wind farm in Eastern or Southern East of Finland.

In some areas, the limited grid access is already affecting project development: the grid is fully booked and no new wind farms can be connected in the area. The grid would need to be reinforced before new wind farms can be connected. The reinforcement takes years and the developer has to pay the costs. In some European countries, the society (or TSO) covers the grid connection costs of offshore wind farms. In Finland, the developer has to pay the costs to the grid connection point that can be even as much as 40 km inland.

The Finnish law (Maanrakennuslaki) conveys broad rights to petitioners against wind power plants. There are restrictions as to who has the right for appeal, but still the right to appeal is still quite wide, and the procedures nowadays take up to 9 to 18 months in court (with an additional 9 to 18 months in the Supreme Administrative Court if an appeal is escalated). But in the worst-case scenario it might also take up to three years, which would of course be a death blow to many projects. But an even bigger problem is that the Finnish legislation is sometimes unclear in terms of what developers have to do in order to get permits and not fall under appeal. So the regulations are open to interpretation. The petitioners quite often send an appeal to court claiming the decision makers were disqualified. Even though the project developer would do everything by the book, the project might end up in court. Broad rights of appeal are therefore not seen as an issue, rather the problem is that administrative courts are lacking resources to handle the appeals in a timely manner. However, the law was changed so that from the beginning of 2018, one has to plead for a right to appeal to the Supreme Administrative Court. Unfortunately, this does not speed up the process dramatically, as it takes some 12 months for the Supreme Administrative Court to decide if one has a right to appeal or not. According to statistics from the Finnish Wind Power Association, some 70% of the wind farm spatial plans end up in the court. Only very few complaints are successful, and it seems that the complaints are more of a way to slow down the wind farm, not to stop it.

100% RES sales mandate should be introduced, combined with regulations preventing the sales of fossil or blended fuels as 100% RES fuels.

The Finnish law (Maanrakennuslaki) conveys broad rights to petitioners against wind power plants. There are restrictions as to who has the right for appeal, but still the right to appeal is still quite wide, and the procedures nowadays take up to 9 to 18 months in court (with an additional 9 to 18 months in the Supreme Administrative Court if an appeal is escalated). But in the worst-case scenario it might also take up to three years, which would of course be a death blow to many projects. But an even bigger problem is that the Finnish legislation is sometimes unclear in terms of what developers have to do in order to get permits and not fall under appeal. So the regulations are open to interpretation. The petitioners quite often send an appeal to court claiming the decision makers were disqualified. Even though the project developer would do everything by the book, the project might end up in court. Broad rights of appeal are therefore not seen as an issue, rather the problem is that administrative courts are lacking resources to handle the appeals in a timely manner. However, the law was changed so that from the beginning of 2018, one has to plead for a right to appeal to the Supreme Administrative Court. Unfortunately, this does not speed up the process dramatically, as it takes some 12 months for the Supreme Administrative Court to decide if one has a right to appeal or not. According to statistics from the Finnish Wind Power Association, some 70% of the wind farm spatial plans end up in the court. Only very few complaints are successful, and it seems that the complaints are more of a way to slow down the wind farm, not to stop it.

100% RES sales mandate should be introduced, combined with regulations preventing the sales of fossil or blended fuels as 100% RES fuels.

There are overlapping planning and permitting processes. First, if a wind farm has got at least 10 turbines, an environmental impact assessment is always needed. Also, a spatial plan is needed. These are two separate processes that are very much overlapping. Two different authorities are in charge of these processes (municipality is in charge of the spatial plan, and the Centre for Economic Development, Transport and the Environment (ELY) is in charge for the environmental impact assessment. This affects all larger onshore and offshore wind farms. Relevant legislation was changed to make it easier to run an environmental impact assessment and a spatial plan hand in hand. Still, they are different processes that two different authorities are in charge of. Second, offshore turbines always need a water permit and a building permit. These two permits are overlapping. This affects all offshore wind farms.

First, relevant legislation should be changed so that if a spatial plan is needed, the environmental impact assessment of the spatial plan should be done so that they also fulfil the requirements of the environmental impact assessment legislation and a separate impact assessment is not needed. Second, in the case of offshore wind farms, the water permit and the building permits should be combined in relevant legislation, so that only one permit (a water permit) is required.

There has been a guarantee of origin system in place for quite some time now in Finland to ensure the correctness of information stated on the use of renewable energy sources, and to promote the opportunity for electricity consumers to opt for electricity from renewable sources. Guarantees of origin of electricity are only issued to electricity produced from renewable energy sources. Most of the small scale-producers use the produced electricity for themselves and if they have that much excess production that they can sell it to the markets, the GoO system should not be too expensive. However, the revenue from GoO is very low at the moment and thus obtaining these guarantees might not be economically feasible. Furthermore, large scale solar power will be not competitive with wind power under this system.

The development of wind power projects in Finland has unintentionally been concentrated along the west coast and especially towards the province on Northern Ostrobothnia, this may pose a risk for reliable wind forecasts estimations and production, if the wind installations are located in the same region of the country. The concentration of several large projects to certain areas increases the competition for the available sites, as well as strains the distribution system operators (DSO). There are several reasons for this poor distribution of projects, the first is the assessments by the Finnish air force prohibiting the construction of windmills in certain areas where they might interfere with radar systems, the second is the way municipalities handle wind power projects and drive projects forward.

First, relevant legislation should be changed so that if a spatial plan is needed, the environmental impact assessment of the spatial plan should be done so that they also fulfil the requirements of the environmental impact assessment legislation and a separate impact assessment is not needed. Second, in the case of offshore wind farms, the water permit and the building permits should be combined in relevant legislation, so that only one permit (a water permit) is required.

A minor issue is the change in property tax in Finland was revised resulting in electricity producers with more than 10 MW capacity at the grid connection point, to receive an increase in the property tax. The change is noticable especially for costal and offshore windmills where the land is considered to be of higher value.

The legal framework for the small scale production of electricity from solar PV needs to be overhauled. The current system is very problematic for joint ventures in housing companies. If an apartment block wants to produce electricity with solar PV and distribute the electricity to the occupants, the housing company becomes an energy producing company. The occupants are then obligated to pay electricity tax on the produced and transferred electricity, even though they own the solar PV installation and consume the energy.

Change the legislation to enable housing companies to produce and use electricity without requiering paying tax on the own consumption

Minor issue is, the technology develops faster than the municipalities update their administrative processes, and one example is the increasing height of windmills exceed the maximum allowed build height according to spatial plans in many municipalities. This is a result of large differences in the administrative process between municipalities on how to approach issues regarding building permits and planning.

There are no general instructions for municipalities how to deal with small RES plants. As a consequence different municipalities have different requirements: Some require a building permission, some don’t, others ask for administrative fees and some require full plans in drawing. These procedures make the overall process more burdensome and difficult for the project developers. This has been a problem particularly for solar producers.

This barrier has been a problem particularly for solar producers. However, there are more and more information available for small-scale producers as well as for authorities in municipalities and the situation is improving. Moreover, it is well known that bigger heating projects always require a building permit. Thus, the recommendation for producers would be to actively engage with local authorities.

If a small-scale energy producer would like to sell the energy that he is not using, he is subject to an income tax. Income tax for income on investments (for example rent income, income from selling left over energy) must be paid from €20. Heating companies who are buying the electricity from small-scale energy producers (solar heating power producers) have an obligation to withhold the tax. Therefore they have often agreed on a purchase limit of EUR19 per month for one seller.

In Finland, the most relevant support scheme for small scale systems is an investment aid that covers up to 35% of the project costs. However, only companies and municipalities are eligible for this aid but no private persons. As a consequence, owners of residential building and other private persons have no access to funding for small scale RES projects. The investment fund for private households should be funded by Ympäristöministeriö, but Ministry of the Environment does not have sufficient funding. Moreover, the funds are not permanent and applicants cannot know whether they are applicable or not, as there is no guarantee that the applicant will receive the funding.

Since solar heating is not profitable in Finland, the level of investment aid provided by the state should be higher than it is now.

The heat market is not very much regulated. As a consequence heat producers cannot feed the produced heat into the heat district heating network. Furthermore, the problem is that the heat selling companies enjoy a monopoly and they haven’t wanted to open the market to other producers than themselves.

In order to overcome this barrier, two actions are necessary. First, the monopoly of the heat selling companies has to be abolished. Second, the district heating network has to be opened to interested market players.

As in Finland there is no single regulation on connection to district heating network for solar power, then every project is considered separately. Requirements are regulated in the contract and therefore can vary depending on the local grid operator. Furthermore, the problem is that the heat selling companies enjoy a monopoly and they haven’t wanted to open the market to other producers than themselves.

In order to overcome this barrier, two actions are necessary. First, the monopoly of the heat selling companies has to be abolished. Second, the district heating network has to be opened to interested market players.

For small-scale solar energy producers, it is difficult to sell their heat into district heat network. Heat production companies rarely agree paying full price to small-scale solar energy producers. This is because paying for small-producers brings with indirect costs for the heating company. Second reason is, that heating prices are around the year the almost the same and are not very much cost-oriented. This means that higher actual costs during cold periods do not raise heat prices. If the calculation of heat prices were more cost-oriented, it would help for a third of heat producers to sell their heat more freely. It also brings higher heat costs for consumers. Moreover, selling solar heat is not economically feasible with current district heating prices. For this reason, more and more companies are moving towards seasonal tariffs.

The Finnish government is mainly interested in the traditional RES technologies (hydropower and industrial biomass systems) which are highly competitive. The share of renewable energy sources (RES) in the national primary energy consumption is high. However, almost all of it is covered by logging waste and old hydropower that are highly competitive also without any subsidies from the state. The rest is mainly covered by the blending of liquid biofuels (gasoline and diesel) as required by the mandatory blending scheme. So far, diverse support instruments used have been inadequate to get any other RES technology to play a significant role in Finland, although the situation has still improved in recent years. For example, many traffic biofuel factories have been established with the help of investment subsidies and other support from the government. This policy change was made as a result of EU directives, after initial resistance of implementing the directives. Quantitative development has been very fast in the last few years. But qualitative development has not yet received adequate attention.

The biofuel blending mandate should be replaced by 100% RES sales mandate. Otherwise the vehicle fleet will not develop for 100% RES use.

Consumers are reluctant to change to alternative fuel vehicles (AFVs). Financial aspects cannot be the main reason because some AFVs have total economic advantage in comparison to conventional vehicles. It seems that irrational reasons prevent many consumers from switching. But for the majority it would be enough if AFVs were substantially cheaper to buy and operate.

For the majority to switch over, the use of taxation and other financial instruments should be considered to make sure that AFVs have clear economic advantage over conventional vehicles. For the minority, only the removal of fossil fuels from the market would work.

Users of cars running on RES lack an appropriate infrastructure. First of all, there are not sufficient filling- and charging stations in most parts of the country, it is important to develop home charging as well as a fast charger network to enable longer and more consistent travel options for electrical vehicles. Second, stations which charge electric cars do not sell 100% RES electricity but the blended electricity mix that contains electricity from nuclear and other sources as well. For biofuels there is a distribution delivery requirement on renewable shares however this is a calculated value and applies to biodiesel which cannot be bought as 100% biodiesel but which is blended with the regular diesel. As a consequence people do not have the option to actually use biofuels. However, thanks to the very rapid development in recent years of establishing new biogas filling stations, this situation is improving. But, on the other hand, 100% fossil methane and blends of renewable and fossil methane are also sold to consumers as pure biogas.

The main thing now as the strategy has been published is to prepare the support scheme as soon as possible, so that project developers and investors would have clarity.

The health study examining wind power has already been started and it has been announced that the study will be ready in May 2017. At the moment it would be very important that politicians would accept the results and do not start demanding more studies before the auctioning is set.

Farmers are among the main group of investors into small RES systems. For them, the payback time is not that important but the investment threshold is decisive as they are usually risk averse.

In order to overcome this barrier, national measures are not enough. The EU environmental subsidies for agriculture need to be extended to RES production and sales.

Motive power tax is an annual surcharge tax levied on cars that can be driven on other fuels than gasoline. This unique gasoline subsidy mechanism has been in effect since 1965.

The primary option to overcome this barrier would be to change the tax to be levied on monofuel gasoline and monofuel diesel vehicles only.

Another option would be to simply remove the tax.

Very high vehicle sales tax includes a CO2 component, which is based on tailpipe emissions without the separation of fossil and renewable CO2. As vehicles that are able to use 100% biofuels have higher tax free price than gasoline vehicles, this tax increases the difference in consumer prices in favour of gasoline vehicles. However, this tax does support electric and hydrogen vehicles as their CO2 emissions are assumed zero.

The primary option to overcome this barrier would be to set CO2 emissions of biofuels to zero as required in UNFCCC reporting in 100% biofuel vehicles, setting them into same situation with electric and hydrogen vehicles. Another option would be to replace the current car sales tax with a new tax that supports all vehicles that are able to use 100% RES over monofuel gasoline and diesel vehicles.

Very high vehicle sales tax includes a CO2 component, which is based on tailpipe emissions without the separation of fossil and renewable CO2. As vehicles that are able to use 100% biofuels have higher tax free price than gasoline vehicles, this tax increases the difference in consumer prices in favour of gasoline vehicles. However, this tax does support electric and hydrogen vehicles as their CO2 emissions are assumed zero.

The primary option to overcome this barrier would be to set CO2 emissions of biofuels to zero as required in UNFCCC reporting in 100% biofuel vehicles, setting them into same situation with electric and hydrogen vehicles. Another option would be to replace the current car sales tax with a new tax that supports all vehicles that are able to use 100% RES over monofuel gasoline and diesel vehicles.

The annual vehicle tax includes a CO2 component, which is based on tailpipe emissions without the separation of fossil and renewable CO2 (like the car sales tax). It also includes a weight component that favours conventional vehicles, since many AFVs include technologies that are heavier than corresponding technologies in conventional vehicles. It thereby punishes gaseous fuelled vehicles and electric vehicles, because their energy storage system is heavier.

This barrier could be overcome by modifying taxation. One way would be to set a basic tax level based on the weight of a vehicle, where additional weight of the energy storage systems of AFVs is removed. The second way would be to set an additional tax for monofuel gasoline and diesel vehicles based only on their tailpipe CO2 emissions.

The fuel levy sanction was originally meant to prevent the use of fuel oil in vehicles, but in 1965-2003 it was also applied to all AFVs. Since 2004, it has only been applied to LPG, resulting in the complete removal of LPG vehicles from road. But it remains a constant threat to other AFVs as well.

More solutions would be needed to be able to develop wind farms in Eastern and Southern East of Finland. Also, more communication between the project developer and the military is needed during the project development.

There is a divide in how politicians in Finland view the move towards more RES, the issue relates to the move towards renewable energy in the transport sector. Some political parties are aiming at full electrification immediately while others are considering the transition towards electrification by the use of biofuels. This debate is ongoing in Finland on how to best achieve RES targets for the transport sector, and therefore there is some uncertainty in what path will be supported. With the formation of the new government in 2019 there might be clarification to this uncertainty.