New support scheme discussed at the Vaasa Energy Week

Fortrum Norway

In Finland, the regulation concerning the support schemes for renewable energy are going through significant changes. A new legislative proposal presents a technology-neutral subsidy scheme based on a competitive bidding process with premiums. The topic was discussed by market players and industry at Energy Regulation Workshop (March 21st, Vaasa City hall).

In 2010 Finland introduced feed-in tariff as economic support mechanism for wind, biogas and wood fuel based combined heat and power. The mechanism has been effective in creating wind power capacity from below 1% market share to about 5.7%. However, the scheme has been also expensive as the electricity market price has been lower than expected. The feed-in tariff for wind, biogas and wood fuel power plants comprises the target price less than the three-month mean market price of electricity. The target price is €83.50/MWh. At the beginning of the scheme the market price varied €45 to €55/MWh but at the end of the support period it has been €30 to €35MWh.

In Vaasa Energy Week preparation of the support scheme based on a competitive bidding process with premiums was discussed. Total of 2 TWh of renewable energy would be generated through the scheme. However, details of the scheme, definitions concerning technological neutrality and schedule of the scheme remained open. Several presentations, representing the industry and market players, forecasted significant increase of the wind power capacity in Finland – despite the details of the new support scheme. For instance one major market player, OX2 informed about their own objectives for Finland being 500-600 MW of wind power, which is about the same as the 2TWh objective. This major market growth would be based on:

  • large number of projects prepared during the feed-in tariff system
  • interest among investors
  • fast technological development (bigger turbines, rotors, towers)
  • competitive procurement processes, and
  • large base of experienced and internationally active project developer

In addition, PPA’s i.e. Power Purchase Agreements, were seen as growing business model with customer being larger-scale companies with RE commitments. Also the length of those agreements can be over 10 year periods. The forecasted future was that 5-10 market players would dominate the market, and scale of the wind power systems could be divided into large-scale market based systems and smaller systems more dependent on the economic supports. As Finland is much dependent on the imported energy (share 23.9%) the growth potential is evident. At the same time the grid imbalances and volatility are increasing.

The support scheme preparation was considered still as uncertain and delays investment decisions. In addition, market players considered that the system might not be equal but favoring more large-scale projects. As the technological neutrality is still undefined, it remains open how the support treats different technologies and introduction of new innovations. The policy advocacy activities are part of the GREBE project, and in Finland the focus will be on informing the project stakeholders about the current transition of the national and regional energy system and related policies.

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NPA funded GREBE and TARGET Projects meet at the Technology Festival of Northern Norway (TINN)

Target & GREBE
Norwegian project leaders, both from Narvik: Dr. Wei Deng Solvang (TARGET) and Fred R. Johansen (GREBE)

TARGET is a NPA-project designed to enhance the capacity of manufacturing companies to innovate and embrace new technologies – making regional manufacturing globally competitive. Partners of the TARGET Project were recently in Narvik to discuss how to deliver state-of-the-art technological supports to local businesses in the NPA-regions. This time, in collaboration with the GREBE project partner – Narvik Science Park at the  Technology Festival of Northern Norway (TINN). Partners concluded that renewable energy (GREBE) and digitalization (TARGET) represent two key factors in the global market competition.

Bulding regional competencies

Manufacturing in the NPA region has many important strengths. These include regional and niche specific competencies that are world leading in specific sectors unique to the region. However, the majority of manufacturing companies are predominately small in size and face considerable challenges like geographical isolation from major markets and a lack of the benefits offered by more populous and urbanised economic urban clusters. When combined with global trends that see a shift in manufacturing to lower cost and developing economics with rapid advances in new technologies, this means that support measures are needed to strengthen the manufacturing sector.

TARGETs Partners are:

  • South West College, Northern Ireland (Lead Partner)
  • UiT – The Arctic University, Campus Narvik – Norway
  • Centria University of Applied Sciences, Finland
  • Luleå University of Technology, Sweden
  • Cavan Innovation and Technology Centre, Ireland
  • Local Enterprise Offices Cavan and Sligo, Ireland

Target project

A collaborated competence platform

The focus area in the TARGET- project is to provide a toolbox to facilitate manufacturing companies´ application of innovation and embracing new processes and practices such as virtual and parametric design and simulation, reverse planning, modelling and 3D printing, remote monitoring and programming of NC machines and robots, 3D measurements, application of digital data and vision based quality assurance. Coupling these with key market analysis skills such as trending, testing and integrating products into a whole cycle of service delivery will build the competitive advantage and value of manufacturing firms. The key is to converge all of these technologies to produce an integrated, automated and highly efficient manufacturing environment – putting the knowledge economy into manufacturing.

Target project - image1

Global competitiveness

The TARGET project will develop supports to build future global competitiveness of NPA region manufacturers giving them a new influx of innovation, technology and novel processes. This will open up new and promising opportunities and reduce the competitive and knowledge gap through the introduction of new processes, techniques, knowledge and skill and will demonstrate the benefits to be gained through the application of these supports to position NPA manufacturing industries as world leaders in their sectors and building sustainable competitive advantage.