Missing forest subsidies slow down Finnish biopower project

A €200 million ($252 million) biopower project in Rovaniemi, Finland is in danger of being halted due to an energy subsidy issue related to the use of low-grade timber.

The CHP plant was meant to use wood chips from surrounding Finnish forests as fuel, but the initial felling of fully grown timber is not subsidised by the European Union, unlike the 70% wood feedstock produced by stumps and timber leftovers in Southern Finland.

Rovaniemen Energia CEO Markus Tykkylainen was quoted as saying: ‘Without a proper support package in place, wood for energy cannot be harvested from the forests of northern Finland because of the long distances involved.’

He also feels that because of the current affordable market price of electricity, a decision on investment will not be anyone’s top priority.

‘The collapse of this large biopower project would be an unpleasant setback for our government as it looks to hit a renewable energy commitment of 38% by 2020,’ Tykkylainen added.

Technology director at the Technical Research Centre of Finland, Satu Helynen, says that stumps and leftovers would not be sufficient enough to help meet the expected 95MW of electricity the plant would produce.

‘1.1 million m³ of timber was felled last year for energy production and the forests have an annual growth in the region of 28 million m³, so the demand could easily be met,’ he says.