Price-based mechanisms (“Heat bonus” for CHP plants)
Updated: 07.01.2019
Author: Karl Wikberg
In Finland, the cogeneration of heat and electricity is promoted by giving CHP plants working on biogas and wood fuel the right for an increased fixed “heat bonus”. The granting of the support is subject to certain conditions.
Eligible technologies
Eligible for an increased “heat bonus” are CHP plants working on biogas or wood fuel. In addition, the plant must be located in Finland or in Finnish waters and be connected to the grid (§ 7 Act No. 1396/2010). CHP plants must meet certain requirements according to the technology employed (see below) (§26 Act No. 1396/2010).
| Biogas | CHP plant working on biogas is eligible for an increased "heat bonus" if the following conditions are met: - The plant must produce both electricity and usable heat.
- The plant must achieve an efficiency rate of at least 50%, or even 75% if the capacity of the generators is equal to or exceeds 1 MVA (§ 10 Act No. 1396/2010).
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| Biomass | Wood fuel plants are eligible for an increased “heat-bonus” if they meet the following conditions: - The plant must produce both electricity and usable heat.
- The plant must achieve an efficiency rate of at least 50%, or even 75% if the capacity of the generators is equal to or exceeds 1 MVA (§ 11 Act No. 1396/2010).
Electricity generated by a wood-chip plant may be eligible for an increased "heat bonus" if the plant includes a pulverized coal boiler that uses wood-chips for fuel |
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Amount
| Biogas | The bonus is fixed at € 50 per MWh for CHP plants working on biogas (§26 Act No. 1396/2010). |
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| Biomass | The bonus is fixed at € 20 per MWh for CHP plants working on wood fuel (§26 Act No. 1396/2010). |
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Addressees
Entitled party. Energy producers who produce heat and energy in a CHP plant working on biogas or wood fuel.
Procedure
Process flow | Advance notification. Within one month of the decision to install a plant, the electricity producer using biogas and wood fuel in CHP plant shall inform the Energy Authority about his plans and about the technical specifications of the plant (including heat utilization, plant efficiency and total capacity) in writing (§ 13 Act No. 1396/2010). Application. A given producer shall apply to the Energy Authority for the "heat bonus". All applications except applications regarding wood-chip plants must be submitted before the plant starts commercial operation. The application must contain certain information specified by law (§ 14 Act No. 1396/2010). Allocation of support. The Energy Authority awards the "heat bonus" if the applicant meets the formal and technical requirements (§ 26 Act No. 1396/2010).
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Competent authority | The responsible authority is theMinistry of Economic Affairs and Employment, the supervision of the support scheme is done by the Energy Authority (§4 Act No. 1396/2010). |
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Degression
The law foresees no degression mechanism for the heat bonus.
Distribution of costs
| State | The Energy Authority pays the bonuses (§ 29 Act No. 1396/2010). These costs are covered by the state budget (§ 2 Act No. 1396/2010). |
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Finland
