New technology to benefit from energy aid

The Government has adopted a decree on granting energy aid for the period 2018–2022. Like before, the objective is to promote the production of renewable energy, energy saving and energy efficiency, said an official press release.

In future even more of the aid will be targeted to new technology projects. The budget for 2018 is EUR 55 million.

Priority has been given to new technology projects, but aid has also been available for conventional technology projects. Due to the limited annual budget all feasible projects could not have been funded, which is why the allocation of energy aid for conventional technology projects will be thoroughly scrutinised. Priority will be given to well-planned and prepared project applications. This concerns large-scale projects in particular.

New technologies mean new kinds of solutions that have not yet been tested widely in Finland. Typically this would mean the first demonstration plant or plants. The new technologies usually come with additional costs and risks compared to a similar ‘off the shelf’ project. New technology solutions have important role in achieving the energy and climate targets.

The investments related to energy efficiency agreements, and investment in decentralised energy production and renewable transport fuels in the non-emissions trading sector are targeted with the energy aid also in the future.

The most significant change in the new decree is that the project may only start after the aid is granted. Earlier it was possible to start the project at the implementer’s own risk after the application was submitted. The main objective is to channel the aid specifically for those projects that would not start without the aid. The aim is also to have better applications and improve the efficiency of their processing.

In future the Finnish Funding Agency for Innovation Tekes, which from 1 January 2018 becomes Business Finland, will be responsible for smaller new technology investment projects of EUR 1 million or less. The Ministry of Economic Affairs and Employment will review large-scale project proposals and those having impact in terms of Finnish energy policy.

Certain changes have also been made to the aid guidelines. The indicative rates of aid are the same as in 2017, but especially with regard to investments the eligible projects and decision-making procedures have been specified in more detail. The aid guidelines for 2018 will be published on the Ministry’s website in the beginning of January.

At the moment the number of aid applications to be processed is exceptionally high. In the latter part of the year applications were submitted in large numbers, and the processing has been slow because of several insufficient applications. The aim is that, in the future after the backlog has been cleared, the processing of an application would take less than two months.

The new decree that enters into force on 1 January 2018 mainly impacts the processing of the new energy aid applications.