Renewables Finland: Subsidies and Public Support

At a national level, investment projects and studies can benefit from the energy aid if they contribute to energy conservation and efficiency or rollout of novel production technologies. For renewable energy, the emphasis is currently on those projects that employ new technology and increase the balancing capacity of the energy system.

Since subsidy schemes and their eligibility criteria vary on a yearly basis, open calls for applications and restrictions from already obtained grants should be checked case-specifically. Several projects are under development with funding from earlier financing rounds. Solar power, as well as storage and heating applications have been strongly represented in the RRF (Recovery and Resilience Facility) funding for clean transition and energy infrastructure projects, and several major projects around Power-to-X and heating boast an IPCEI (Important Projects of Common European Interest) status.

As a novelty, a tax relief for large-scale industrial investments is on the political agenda. While renewable electricity production will likely be excluded, other renewable fuels and storage applications, upstream production of essential raw material, components and equipment, as well as downstream decarbonisation and energy efficiency measures at the offtaker’s end would be covered.

Projects in Finland are eligible for EU mechanisms such as the Hydrogen Bank. Through awards from its domestic pillar, a fixed premium (in €/kg) is available for RFNBO-qualifying hydrogen based on auctions. Depending on their specifics, energy projects may qualify for funding also through the Connecting Europe Facility, Horizon Europe and InvestEU, to name a few, and loans can further be obtained through the European Investment Bank.

The intention to utilise public funding needs to be considered against the overall design of the project and its timeline. Subsidies are generally geared towards facilitating projects that could not otherwise be realised, and reaching FID or making irreversible financial commitments can disqualify a project. Due to the relatively tight timeframes, ability to perform within expected deadlines is critical, and sufficient maturity at the time of application is needed for the project to be eligible. Employing a grant also normally contributes to the de minimis quota of the entity and can directly affect eligibility for other subsidies or even certain market activities, in particular within the RFNBO regime.