Sector Outline Finland: Renewable Heating

Given Finland’s geography and climate, heating naturally plays a key role in the energy sector. The system rides on centralised production solutions and biofuels, characterised by industrial self-supply and a comparatively low share of oil and gas-fired boilers in residential use in favour of district heating and direct electricity.

While heating has so far depended on fossils to cover full demand and ensure security of supply, the balances have tilted heavily in favour of renewables in the 2010s and 2020s. In district heating, peat, coal and natural gas still dominated the first decade of the millennium, but now represent less than a third of the total fuel intake, while renewables have all but doubled their share in the past ten years. The statutory deadline for phasing out coal is 2029, but major facilities have already switched to other sources, with the remaining ones planning to do so during 2025.

The largest individual source in the current heating mix are wood fuels, representing nearly a half of the heat production for district heating, and three quarters for industrial applications. Amongst the industry, the traditionally large but still growing share of renewable fuels, mostly black liquor, is attributable to the forest industry’s role as one major consumer. In further support of the transition, power utilities are increasingly electrifying their processes and actively investing in heat pumps, flue gas scrubbers and electric boilers.

Finland is a leader in district heating within the Nordic countries, boasting one of the highest per capita usages globally. The country has developed an extensive and efficient district heating network that is continuously upgraded and expanded. This system effectively integrates various energy sources and allows for the utilisation of waste heat from industrial processes, including Power-to-X facilities.