Energy Policies of IEA Countries: Finland 1999

International Energy Agency

This IEA report provides a comprehensive, in-depth assessment of the energy policies of Finland, including recommendations on future policy developments. Over the past years, Finnish energy markets have undergone reform and restructuring. Competition was introduced into the electricity market in 1995, and has since been strengthened significantly. Competition in the natural gas market is imminent. Finland is not yet connected to the EU natural gas network, but the rules on competition cover cross-border competition from the outset to prepare for the future. Attention still needs to be given to market power. Finland and the wider Nordic market are still relatively concentrated. The recent merger of Finland's largest electricity company with the country's dominant oil and gas conglomerate did nothing to alleviate this situation. Price regulation and anti-trust oversight may have to be strengthened. Nevertheless, the Finnish power market is a successful example and worthwhile for other countries to study. Finland was the first country in the world to introduce a carbon tax and has an excellent record in energy efficiency policy. But carbon emissions continue to rise. Increased use of natural gas and Finland's interconnection to the EU gas grid may be the best approach to reducing CO2 emissions.