September 4, 2015 / 7:58 AM / 2 years ago

Finland to get less wind power as govt overhauls subsidies

OSLO (Reuters) - Finland’s government proposed setting a November 2017 deadline for granting subsidies to wind power plants as applications exceeded a previously set capacity limit.

The decision, if approved by the parliament, would mean the end of the existing feed-in tariff system in Finland, and follows a decision by Britain to scrap all new subsidies for onshore wind from next April.

“The present system can no longer be considered a sufficiently cost-effective and market-oriented incentive system,” Finland’s Ministry of Employment and Economy said in a statement.

The measure could save 70-80 million euros in 2020, it added.

The centre-right government has proposed the deadline to apply for subsidies as it has already received more applications than the system can accept under the 2,000 MW cap set earlier.

Plants with total 800 MW capacity have been already granted subsidies, while another 720 are likely to receive them and there are applications pending for another 1,100 MW.

“The aim of the proposal is, in accordance with the Government programme, to reduce spending in the state budget on production subsidies for wind energy,” the ministry said.

The ministry estimates that not all wind power producers will be able to meet the November 2017 deadline, resulting in lower wind power output than previously estimated.

Officials said they now expected output from wind power plants to reach less than 5 terawatt-hours (TWh) in annual production by 2020, down from an original estimate.

“The goal set by the EU for renewable energy in Finland for the year 2020 is not in jeopardy, even though the increase in wind energy achieved through the feed-in tariff system is falling below the originally planned 6 terawatt hours (TWh),” the ministry said.

The loss in wind power output will be compensated by an increase in production from biomass, and Finland is already close to its renewable energy target of 38 percent, the officials said.

According to the European wind power association EWEA, Finland had 627 MW of wind power installed by the end of 2014, the lowest of the four Nordic countries.

The ministry said it will start working on a new renewable support scheme, which will have to be technology neutral.

New estimates from the International Energy Agency showed onshore wind to remain the cheapest renewable source, at par with, or even below, gas-to-power generation by 2020.

Reporting by Nerijus Adomaitis; Editing by Keith Weir

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