Finnish government shies away from nuclear in new energy plan

London (Platts)--5Dec2005

The Finnish government took no position on new nuclear power in the energy
strategy it approved Nov 24.

The strategy, which updates an earlier plan from 2001, said all types of
generation are possible. However, it doesn't advocate nuclear and it
specifically proposes more biofuel and renewables. The strategy is intended to
help Finland meet its Kyoto protocol targets from 2008-2012 and beyond.

The energy strategy was debated in the Eduskunta (parliament) for the first
time on Nov. 30 and will be discussed in committee for several months before a
vote. If parliament approves the strategy, the government-proposed funding
levels in the plan will be used to develop renewables and to subsidize peat
and buy emission rights.

Speaking at an energy seminar shortly before the government's decision was
announced, Finance Minister Eero Heinaeluoma -- one of the strategy's
architects -- signaled his willingness to consider more nuclear power. He said
that "Finland has to simultaneously respond to international emission
reduction targets, which will probably grow even stricter, and produce more
electricity with fewer emissions."

Heinaeluoma's support signals that the government could make a decision in
principle for a sixth nuclear unit and send the proposal to the parliament.

Heinaeluoma said that Finland will need about 2,400 MW more of installed
capacity by 2020 in addition to the 1,600-MW Olkiluoto-3 EPR now under
construction. It is scheduled to go on line in 2009.

Conflicts over the direction of the strategy and costs for various options
delayed its completion twice during the year by the three-person ministerial
group in charge of developing it. Heinaeluoma was one of the three.

Sources said that Trade & Industry Minister Mauri Pekkarinen and Environment
Minister Jan-Erik Enestam were especially at odds over the use of more nuclear
versus subsidies for continued use and further development of peat.

Enestam opposed Olkiluoto-3. But he said publicly mid-year that more nuclear
could help Finland meet its emission reduction targets under the Kyoto
protocol. 

He added that, with the decision to build Olkiluoto-3, Finland had chosen a
nuclear path. Finland has four reactors operating.

The energy strategy calls for the government to buy emission allowances for
10-million tons of carbon dioxide to offset industry's and power producers'
costs for buying them, from 2008-2012. Without the government intervention,
Finland would exceed its Kyoto target by about 15%, according to the Trade &
Industry Ministry.

The strategy also calls for 25% more renewable energy consumption by 2015 and
for an additional 40% more by 2025.

In addition, the government wants to cut electricity taxes by 50% in 2008, in
order "to help ensure that jobs stay in Finland," the ministry said. 

In a recent survey of presidential candidates, current President Tarja Halonen
said that Finland needs diversified energy production, rather than a sixth
nuclear reactor to help reduce greenhouse gas emissions.

Halonen is the frontrunner in a field of seven candidates and is likely to be
re-elected when Finns vote in January.

But her strongest opponent, former finance minister Sauli Niinistoe, said that
a sixth unit is needed to help Finland reduce its greenhouse gas emissions.

Although the Finnish president no longer has direct power, the president's
opinion traditionally carries considerable weight.

This story was originally published in Platts Nucleonics Week. Request a free
trial at http://www.platts.com/Request%20More%20Information/

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.