Feed-in tariffs, i.e. the guaranteed price system

The purpose of the feed-in system is to guarantee an energy producer a fixed price for the electricity it produces. The guaranteed price system is one of the government’s instruments for influencing the production structure of electricity. Most often, it is relied on in an attempt to increase the use of renewable or domestic energy sources.

Renewable energy feed-in tariffs are already in use in a number of EU member states. Their amount and structure varies from one country to another.

Feed-in tariffs in Finland

Finland adopted the feed-in system in 2011. Nearly €100 million have been reserved for the purposes of its production subsidies in 2012. The subsidy sum of the feed-in tariff grows annually in such a way that in 2015, for example, these subsidies are expected to be paid in the amount of €200 million.

The wind power, biogas power and wood-based fuel power stations accepted in the feed-in system are paid a subsidy that accords with the difference between the target price and the electricity’s market price. The target price for production is €83.5/MWh. To ensure a fast start for wind power building, the target price for wind power electricity during the first three years is €105.3/MWh. The subsidy paid for electricity produced by forest chip power stations that belong in the system varies according to the price of the emission allowance. A power plant may receive subsidies for a period of 12 years.

Source: Ministry of Economic Affairs and Employment

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Page last updated 15.6.2017

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