Climate | Government: wind and solar electricity will not receive new clean transition support

Power production with wind and sun is excluded from the investment subsidy, with which the government wants to speed up Finland’s transition towards a climate-friendly economy.

The matter is clear from the announcement published by the Ministry of Finance on Friday.

“Government support can be targeted at investments that speed up the green transition and reducing dependence on fossil fuels. However, according to the policy of the Economic Policy Ministerial Committee, the production of renewable electricity would be limited outside the support”, the announcement says.

It is a tax subsidy, which was decided on during the framework crisis in the spring. According to it, the government could grant a tax credit of up to 150 million euros for projects promoting the green transition. Projects must be at least 50 million euros in size.

The main goal of the support is to get industrial plants using clean electricity to Finland, for example battery and hydrogen projects and fossil-free steel industry. Government sources tell HS that the purpose of the support was not originally to focus on the production of clean electricity, but rather on factories that use clean electricity.

Wind power has been built in Finland since the summer of 2018 also on market terms without government production support.

On Friday according to the published announcement, the production of renewable electricity is excluded from the scope of support, but not all production of renewable energy.

According to the release, supported projects can be related to “renewable energy production (including hydrogen and hydrogen fuels), electricity and heat storage, and storage of renewable hydrogen, biofuels, bioliquids, biogas and biomass fuels”.

Support would also be available for “low-carbon industrial production processes and energy efficiency measures”.

The economic policy ministerial committee made its policy last week. The chairman of the committee is the prime minister Petteri Orpo (cook). It also includes, among others, the Minister of Finance Riikka Purra (ps), Minister of Economic Affairs Will Rydman (ps), Minister of Agriculture and Forestry Sari Essayah (kd), Minister of Transport and Communications Lulu Wrist (kok) and the Minister of Labour Arto Satonen (cook).

To the press release from the wording, it can be interpreted that, for example, a wood-burning district heating plant or an energy wood terminal could receive investment support, but an offshore wind farm would not.

Minister of Climate and Environment Kai Mykkänen According to (kok), however, this has not been the spirit of the preparation.

“This is not intended to support power plants or their construction,” he says.

“The spirit has been that this is not granted to energy production plants, but to energy processing, including hydrogen production.”

There is also a recording, which can be interpreted as meaning that the mines are not limited outside the support. The list of supported projects includes a section that talks about batteries, the key components of a climate-neutral economy and “related production of critical raw materials”.

According to Mykkänen, speeding up the mines has not been the goal of the drafters of the support decision either.

“Perhaps battery mineral factories can be a more relevant question,” says Mykkänen.

Support for sharing must still receive approval from the EU Commission. The scope of the support will be confirmed when the Ministry of Finance holds discussions with the EU Commission on the matter.

The EU normally strives to combat state aid that distorts competition. However, as a result of the Russian invasion and the energy crisis, the EU Commission published “temporary state support framework promoting a net zero economy”thanks to which subsidies that take away from the fossil fuel economy can be granted.

That framework would also allow the granting of support to wind and solar power.

Correction at 16:51: Contrary to what was originally said in the story, the matter was presented in the ministerial committee by Riikka Purra and not by Kai Mykkänen.