wind

Finland

Finland replaces coal with wind power, boosting energy security and competitiveness

The Salmisaari coal power plant in Helsinki has now officially closed, bring coal generation in Finland to below 1 percent, but by putting in place clear policies, the Finnish government has managed to replace coal with wind power faster than expected, increasing self-sufficiency and attracting massive investments.
Finland replaces coal with wind power, boosting energy security and competitiveness
Kokkola wind farm in Finland.

Finland’s shift is part of the recent rapid decline of coal power across developed countries, most of whom are already members of the Powering Past Coal Alliance. The country has reduced its use of coal in the country’s energy mix from 23 percent in 2003 to less than 1 percent currently, four years’ ahead of the government’s ban on coal-based energy production, set for 2029. Coal has been replaced with wind power: wind capacity has more than doubled in Finland since 2020 and now accounts for 25 percent of the country’s electricity.

This shift has increased Finland’s energy independence and thus national security, as the country had been reliant on imported coal, primarily from Russia. It is also set to boost the country’s competitiveness, as wind power projects create the conditions to attract significant industrial investments to Finland, which require substantial amounts of clean electricity.

The significant reduction in coal power generation was achieved through a comprehensive set of policies, including the commitment to phase out coal made in 2016, membership in the PPCA in 2017, and a law banning coal power completely by 2029 (passed in 2019). This was combined with targeted support schemes such as an incentive package for companies to phase out coal use by 2025 and a 22.8 million euro funding round in 2021 directed towards innovative energy technologies and investments. It is these government actions combined with strong market forces, where companies have opted to invest in renewables instead, that has delivered this accelerated transition.

“I would like to congratulate Helen Ltd. and all Finnish energy companies for their determination to end the energy use of coal in Finland” said Sari Multala, Finland’s Minister of Climate and the Environment. “In 2019, Parliament nearly unanimously passed the law to ban the use of coal for energy within ten years. At that time, the target seemed challenging, but now that it has been met ahead of schedule, passing the law appears very far-sighted. Imported fossil energy has been replaced with cleaner solutions that reduce climate emissions, while consumers benefit from lower energy prices.”

Following the UK’s phase-out of coal power last year, Finland’s efforts have continued the rapid transition away from coal power in the OECD in favour of mostly wind and solar energy. 14 OECD countries now operate coal-free power systems, with further 13 targeting coal phase-out by 2030.

With updated Nationally Determined Contributions (NDCs) due in 2025, all countries have an opportunity to make new commitments to No New Coal and coal phase-out. As investors look for clear government signals, this will help countries attract the capital needed to accelerate the clean energy transition and reap its massive rewards.

“We have been able to improve our competitiveness by investing in the flexibility of the energy system in line with our strategy and shifting our production to clean solutions” said Olli Sirkka, CEO of Helen Ltd. “This way, we can operate more profitably with lower customer prices. Our success is an excellent indication that, at best, the clean transition, cost efficiency and Finland’s security of supply can go hand in hand.”

For additional information:

Powering Past Coal Alliance

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