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EUR 7.7 million for projects replacing coal energy – aid for non-combustion-based solutions in district heat generation

Ministry of Economic Affairs and Employment
2.12.2020 9.55
Press release

The Ministry of Economic Affairs and Employment has adopted the first decisions concerning investment aid for projects that rapidly phase out the use of coal energy. Aid was granted to four projects totalling EUR 7,715,880. The supported projects involve using non-combustion-based technologies in district heat generation.

“These decisions and projects are only partial solutions, but the commitment of Espoo, Vaasa and Turku to completely stop burning coal by the end of 2025 is significant. This strongly supports Finland’s carbon neutrality target, as nearly 40% of emissions of district heat generation come from coal and 12% of the total greenhouse gas emissions from the Finnish energy sector are caused by coal,” says Minister of Economic Affairs Mika Lintilä.

Supported projects will involve combining a large-scale air-to-water heat pump with district heat generation and the utilisation of waste heat in district heat generation. Aid was granted to Fortum Power and Heat Oy for EUR 3,060,000 for the construction of an air-to-water heat pump plant in Espoo’s Vermo, and to Turun Seudun Energiantuotanto Oy for EUR 1,938,180 for improving the heat recovery of the Naantali power plant and for the recovery of sea water heat. In addition, Vaasan Sähkö Oy was granted EUR 1,857,700 for the recovery of heat from waste water in the wastewater treatment plant in Pått and EUR 860,000 for the recovery of heat from waste heat generated during the test runs of Wärtsilä Smart Technology Hub’s engines.

The projects are part of broader plans in the Vaasa, Espoo and Turku regions to phase out the use of coal on an accelerated timetable. The recipients of aid will also implement other measures to phase out coal by 2025.

In accordance with the Act approved in 2019, coal-fired power and heating generation will be banned in Finland as of 1 May 2029. According to the Government Programme, energy companies that phase out the use of coal by 2025 will receive separate incentives to fund investments replacing coal.

Applications for investment aid accepted until the end of February 2021

The decisions now adopted are part of an aid scheme that encourages companies and communities, including municipalities, using coal to transition away from coal energy by the end of 2025. A total of EUR 90 million has been reserved for the investment aid.

The Ministry of Economic Affairs and Employment will accept applications for investment aid for projects to replace coal energy by 28 February 2021.

Priority will be given to projects that utilise non-combustion-based technologies. If it is possible, within the scope of the mandate available, to grant aid to other projects, co-generation projects for electricity and heat will be prioritised. The novelty and replicability of technology will also be taken into account in the evaluation of the projects.

Applications for aid are to be submitted through Business Finland’s electronic system but they will be processed in the Ministry of Economic Affairs and Employment. Applications are to be submitted through the system with the following attachment: “Application form for investment aid for projects replacing coal energy”. The remaining aid decisions are intended to be made during the first half of 2021.

More information online:

Annex: description of supported projects (pdf)

Investment incentives to promote rapid phase-out of coal in energy production (Ministry of Economic Affairs and Employment, 19.3.2020)

Inquiries:
Tuula Savola, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7133
Kati Veijonen, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7170

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