Role of the energy use of peat in the Finnish energy system

The objective of this study was to combine the current knowledge of the production and use of energy peat and of the significance of peat in the Finnish energy system. The study deals with the development, current state and future prospects of the production and use of energy peat, as well as the factors that have influenced or are influencing them. The use of peat has established its position in the Finnish energy system. Peat has traditionally been well available and thus its security of supply has been considered good. It has also been regarded as a high-quality indigenous fuel. In recent years many investments have been made in power plants using indigeneous fuels and in co-use of peat and wood. In fact, the use of the peat and wood of indigeneous fuels is very closely inter-linked and their use support one another. Regionally speaking, peat consumption is highest in North Ostrobothnia and inland. The negative effects of peat use are considered to be the high carbon dioxide factor of peat combustion and in some cases the possible effects of production on the local environment. Emissions trading, which was started at the beginning of 2005, weakens the competitiveness of peat in relation to other fuels. When the value of an emission allowance rises enough, also the use of coal may become cheaper than that of peat in installations in which peat has earlier been the main fuel. As the role of peat decreases, the effects are also reflected in the production and use of peat, and in the use of wood fuels, if the supply conditions of peat, which is used as the support and mixed fuel for wood, weaken. The low production of the rainy summer of 2004, combined with the low peat storage levels, led to difficulties in peat deliveries during the winter 2004-2005, and without the milder winter and good water situation in the Nordic countries the supply of peat would not necessarily have been sufficient to cover all demand. If the current role of peat is to be maintained, the sufficiency of the peat production sectors necessary for peat production should be secured, which should also be taken into account in regional land use planning. The security of supply of peat should be ensured, e.g. by developing stockpiling, regardless of the weather conditions and variations in demand. The preservation of the competitiveness of the operating environment in the long term is a prerequisite for the continuity of production. Peat should remain competitive particularly in relation to the imported fossil fuels in order to allow the investment potential of the installations using indigeneous fuels. As for peat condensate, a survey should be carried out of whether it would be justified to produce condensate power with peat for reasons related to security of supply or existing investments and the actions should be determined accordingly. Policy outlines for the role of the energy use of peat, which lay the basis for sustained operational planning, will be required for the Climate and Energy Strategy (orig.)