Results: Drivers and Barriers for Flexibility in the District Heating-Electricity Interface 5.3. Country Profile: Finland 28 5.3.1. Main Drivers and Barriers CHP, heat storages and – to a very small extent – heat pumps, are all present in Finland. Investment subsidies are generally available for non-fossil-based units. Biomass is generally untaxed, which, all things being equal, increases the comparative advantage of fuel-based units compared to P2H. Coal is discussed to be phased out within an unknown timeframe, potentially affecting large CHPs. Table 7: Framework conditions for flexibility in the DH‐electricity interface in Finland FINLAND Framework conditions for CHP Absence of mandatory procurement of electricity Absence of feed‐in tariffs Absence of feed‐in premiums Presence of market pricing for electricity Presence of power capacity payments Presence of other subsidy to CHP Presence of tax exemptions for fuel to electricity production Presence of energy, CO2 or other tax reductions Presence of grid connection discounts Absence of tariffs levied on CHP for feeding into grid Framework conditions for P2H Absence of PSO on electricity (when used for heat generation) Absence of Grid tariffs on electricity (when used for heat generation) Absence of other levies or taxes on electricity (when used for heat generation) Presence of reduced electricity tax on electric boilers Presence of reduced electricity tax on heat pumps Absence of regulatory priority to heat from waste, RES, biomass or geothermal Presence of subsidy for heat pumps Presence of subsidy for electric boilers Framework conditions for general resources Absence of heat price regulation ‐ price caps Absence of heat price regulation ‐ flat tariff structures Absence of heat price regulation – profit caps in commercially owned DH Absence of operational practice of generation following demand Absence of tax exemption for RES fuels Absence of subsidies for HO boilers 5.3.2. Flexibility Options in the DH system In 2014, DH supplied 46% of all heat in Finland. 72.4% of this came from CHP-plants, while the remaining 27.6% was supplied by HO technologies such as boilers. Fuel diversity is rather high, as seen in the following distribution: bioenergy 31%, coal 24.6%, natural gas 22.3%, peat 14%, heat pumps & industrial reaction heat 2.5%, oil 2.1%, other 3.4%. Information regarding grid connection has not been identified. 5.3.3. Framework Conditions for CHP Current Aspects CHPs are operating on the power market. Biomass-based CHPs are subsidised with a heat premium, in addition to their revenue on the power market. Investment subsidy is generally provided to RE-based technologies, under which CHPs smaller than 10 MWFUEL input can receive 10-15% investment-support, when they are based on biomass. Biomass for CHP-based energy production is not taxed, while the heat share of the energy produced by fossil fuels is taxed. Compared to other
WP2 DH report
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