Premium tariff

Abbreviated form of legal source(s)

Act 1396/2010
Decree 1397/2010

Description of support scheme

Producers of electricity from wind, biogas and biomass receive a variable premium tariff on top of the wholesale electricity price for a period of 12 years. The generators get a fixed target price for their electricity.
The premium tariff system is currently being phased out step by step. Since 2017, wind power has not been eligible, and biogas and biomass plants have not been eligible since 2019 or 2021 depending on the type of fuel they use. In other words, only the plants already approved to the premium tariff system continue to receive support for the period of 12 years they are entitled to since their admission.

Amount

The premium tariff is equal to the difference between the fixed target price and the average market price of the previous three months. However, if the market price for the previous three months is below 30 €, the premium will be fixed at target price minus € 30 (Art 25 Act 1396/2010).
Wind energy: The target price is € 83.5 per MWh (Art 23 Act 1396/2010).
Biogas: The target price is € 83.5 per MWh (Art 23 Act 1396/2010).
Plants that qualify for the heat bonus receive € 50 per MWh on top of the target price (Art 26 Act 1396/2010).
Biomass: The target price is € 83.5 per MWh for electricity from wood fuels (Art 23 Act 1396/2010). The premium tariff allocated to electricity and CHP plants working on wood chips is variable and is calculated according to the cost-effectiveness of peat and wood-chips in power production; the applicable taxation to peat and the emissions allowance costs applicable on the market (Art 25 Act 1396/2010). The exact figures taken as a basis for calculating the premium tariff are provided in article 4 of the Decree 1397/2010.
Plants that qualify for the heat bonus receive € 20 per MWh on top of the target price (Art 26 Act 1396/2010).

Addressees

Producers who use wind, biogas, wood chips or wood fuels for the generation of electricity and whose plant is connected to the grid and located in Finland or in Finnish waters are entitled to receive the premium tariff (Arts 6-7 Act 1396/2010).

Procedure

A given producer shall apply to the Energy Authority for the premium tariff. All applications except applications regarding wood-chip plants must be submitted before the plant starts commercial operation. The application must contain certain information specified by law (Art 14 Act 1396/2010). The Energy Authority awards a premium tariff if the applicant meets the formal and technical requirements (Art 15 Act. 1396/2010).
NB: The premium tariff system has been closed from all new applicants since February 2021.

Competent authority

Ministry of Economic Affairs and Employment; Energy Authority

Technologies

Wind energy onshore: Eligible until 2017 as long as the following criteria are met: The plant must not have received other state grants (Art 9 Act 1396/2010; Art 1 Decree 1397/2010) and the plant must be built entirely from new parts (Art 9 Act 1396/2010; Art 1 Decree 1397/2010).
The nominal capacity of the generator must be at least 500 kVA (Art 9 Act 1396/2010).
Wind energy offshore: Eligible until 2017 as long as the following criteria are met: The plant must not have received other state grants (Art 9 Act 1396/2010; Art 1 Decree 1397/2010) and the plant must be built entirely from new parts (Art 9 Act 1396/2010; Art 1 Decree 1397/2010).
The nominal capacity of the generator must be at least 500 kVA (Art 9 Act 1396/2010).
Solar energy
Geothermal energy
Biogas: Eligible under the following conditions:
• The plant must not have received other state grants (Art 10 Act 1396/2010; Art 1 Decree 1397/2010).
• The plant must be built entirely from new parts (Art 10 Act 1396/2010; Art 1 Decree 1397/2010).
• The biogas used must have been produced in a plant, which was not government-subsidised and was built entirely from new parts (Art 10 Act 1396/2010).
• The nominal capacity of the generator must be at least 100 kVA (Art 10 Act. 1396/2010).
Electricity generated by a biogas plant may be eligible for an increased "heat bonus" if the plant produces both electricity and usable heat.
The plant must achieve an efficiency rate of at least 50%, or even 75% if the capacity of the generators is equal to or exceeds 1 MVA (Art 10 Act 1396/2010).
Hydro-power
Biomass: Wood-chip plants are eligible if they have not received the premium tariff before (Art 8 Act 1396/2010) and the nominal capacity of the generator must be at least 100 kVA (Art 8 Act 1396/2010).
Electricity generated by a wood-chip plant may be eligible for an increased "heat bonus" if the plant includes a pulverized coal boiler that uses wood-chips for fuel.
Wood fuel plants are eligible if they meet the following conditions:
• The plant must not have received other state grants (Art 11 Act 1396/2010; Art 1 Decree 1397/2010).
• The plant must be built entirely from new parts (Art 11 Act 1396/2010; Art 1 Decree 1397/2010).
• The nominal capacity of the generator must be between 100 kVA and 8 MVA (Art 11 Act 1396/2010);
The plant must produce both electricity and usable heat. The plant must achieve an efficiency rate of at least 50%, or even 75% if the capacity of the generators is equal to or exceeds 1 MV (Art 11 Act 1396/2010).