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Finland-Energy

Finland Index

[JPEG]

Nuclear power plant at Loviisa (Lovisa) on the southern coast, about seventy-five kilometers east of Helsinki
Courtesy Embassy of Finland, Washington

Even before the 1973 oil crisis, energy was a major concern, and Finland had started energy-saving programs meant to cut dependence on imports and to maintain export competitiveness. Nevertheless, the country had one of the world's highest per capita rates of energy consumption. The cold climate required that the Finns expend about a quarter of their energy supply for space heating, while the relatively long distances separating Finland's settlements required heavy fuel use for transportation. The importance of energy-intensive processing industries, including not only the lumber, pulp, and paper sectors but also the minerals and basic metals sectors, further expanded the country's energy needs. In the late 1980s, Finland consumed about 30 million tons of oil equivalent per year, distributed among solid fuels (15 percent), liquid fuels (40 percent), and electricity (45 percent), which put annual per capita consumption at 0.6 tons of oil equivalent--about 50 percent higher than per capita consumption in the United States.

Domestic sources could cover only about 30 percent of total energy demand, and imported energy supplied the remainder. In 1986 the government estimated that, even assuming continued efforts at conservation, energy demand would grow by at least 1 percent per year during the 1990s and that demand for electricity would grow even faster. By the late 1980s, policy makers faced important choices in their efforts to maintain secure supplies of electricity and other forms of energy. Four major goals governed policy decisions: increasing the use of domestic energy sources, providing for possible import shortages, expanding electricity production, and improving conservation programs.

The state played a strong role in energy management. The government used state-owned energy enterprises and price controls to influence both production and consumption. The state owned the most important energy supply enterprises, including Imatran Voima, the largest electricity producer, which managed the national electricity distribution grid; Kemijoki, a hydropower concern; Neste, which controlled the import, refining, and distribution of petroleum and natural gas; and Vapo, a producer and distributor of peat and other domestic fuels. Another major policy tool was the control of energy prices, either directly or by means of taxes and tariffs.

Finland's main domestic energy sources were hydroelectric power, peat, and wood. By the late 1980s, the country's large hydroelectric potential had been thoroughly tapped, except possibly for the rivers protected by environmental legislation. Nevertheless, hydroelectric production could still be increased by renovating existing installations and by building additional plants at secondary sites. Encouraged by investment subsidies and by the results of state-funded research, Finland had begun systematic exploitation of its peat reserves. Peatlands covered more than one-third of Finland's surface area, but in the mid1980s only about 5 percent of this area was being used. The government hoped to more than double peat output by the year 2000. Wood was widely used for heating in rural areas, especially after the oil price increases of the 1970s; it was even more important for the forest industries, which used waste wood to supply about 60 percent of their energy needs.

Despite increased use of domestic energy sources, the economy depended on imports of petroleum, coal, natural gas, uranium, and electricity. Observers expected that this dependence would get worse in the 1990s and beyond as consumption increased. Moreover, the fall in world petroleum prices, starting in the early and mid-1980s, had made oil imports more competitive and thus might delay investments in domestic energy sources.

The Soviet Union was traditionally Finland's main energy supplier, providing petroleum, natural gas, electricity, uranium, and even nuclear fuel reprocessing services. Energy products played an important role in Finnish-Soviet trade, accounting for about 80 percent of Soviet exports to Finland. The decline in world petroleum prices in the 1980s meant that Finland had to increase the volume of petroleum imports from the Soviet Union in order to maintain the level of sales to the Soviet market. To respond to the resulting oversupply of crude petroleum, Neste began refining oil for export (see Regional Economic Integration , this ch.). Finland's imports of Soviet natural gas transited a pipeline to the southeastern part of the country, with branches leading to the Helsinki and the Tampere areas. In the late 1980s, Finland participated in discussions regarding the construction of a Nordic gas pipeline network that was designed primarily to transport Soviet gas to other Nordic countries but that might also carry Norwegian gas to Finland.

The Finns reduced their dependence on Soviet energy by patronizing other suppliers. For example, during the late 1980s, the Finns began importing coal not only from Poland and the Soviet Union but also from the United States, Colombia, and Australia. Coal imports had declined in the late 1970s as a result of rapid increases in the generation of electricity from nuclear plants, but they rose again by the mid-1980s to some 5 million tons per year. Finland also purchased electricity from Sweden, and the Finns were interested in finding other sources for electricity imports.

To reduce further their vulnerability to cutoffs of foreign energy supplies, the Finns also undertook an energy stockpiling program. Informed observers believed that the country maintained stocks sufficient to supply it for six months, which compared favorably with stockpiles held by other industrial countries.

Experts predicted that Finland would face an electricity shortage by the mid-1990s, unless additional generating capacity came into operation by then. Electricity consumption had grown faster than energy use as a whole during the 1980s, largely because more and more households had switched to electric heating. In the late 1980s, most observers expected that demand would rise by 2 to 3 percent per year until the year 2000. Finland's growing needs for electric power spurred attempts to increase domestic generating capacity, which in early 1986 had reached 10,700 megawatts. In the late 1980s, hydroelectric plants supplied approximately 30 percent of total electric power. Finland produced about 41 percent of its electricity at four nuclear power plants built between 1977 and 1980: two Swedishmade , 660-megawatt, boiling-water reactors on the island of Olkiluoto; and two Soviet-made, 440-megawatt, pressurized-water reactors at Loviisa. Conventional thermal plants accounted for another 22 percent of electricity production, and imports from neighbors covered the remaining 6 percent.

In early 1986, the Ministry of Trade and Industry prepared a plan for the 1990s that called for increasing installed electrical capacity by about 2,700 megawatts by the year 2000. About 1,200 megawatts of the new capacity was to come from small plants scattered around the country. Another 1,500 megawatts would have to come from large plants--peat-fired, coal-fired, and nuclear. According to the plan, Finland could either import another 500 megawatts from the Soviet Union or further expand nuclear capacity.

In the spring of 1986, the Eduskunta almost approved the plan, including the construction of a fifth nuclear plant. Public reaction to the nuclear disaster at Chernobyl in the Soviet Union froze consideration of nuclear power, however, and induced a complete review of energy policy. Public pressure caused the government to replace the proposed plant with coal-fired plants. Despite this setback to the nuclear industry, informed observers believed it probable that Finland would increase its nuclear capacity in the 1990s, once public opposition had died down.

Since the 1970s, the government has made considerable efforts to spur energy conservation. Domestic energy prices have been maintained at realistic levels--gasoline prices were among the highest in all European countries--encouraging the public to conserve. The government raised energy efficiency standards for home construction and renovation, cutting energy use for heating by 30 to 40 percent over a decade. Finland pioneered the development of district heating, which used otherwise-wasted energy from power plants. Observers predicted that this efficient source of domestic heat would supply half the country's homes by the year 2000. Environmentalists believed that further energy savings could be achieved that would reduce the need for building more power plants, but mainstream opinion supported continued increases in energy production to support economic growth. Yet no matter how much Finland conserved, the country would still need to import large amounts of energy and would face difficult tradeoffs between the benefits and the risks and costs of various energy options.

Data as of December 1988



BackgroundFinland was a province and then a grand duchy under Sweden from the 12th to the 19th centuries, and an autonomous grand duchy of Russia after 1809. It won its complete independence in 1917. During World War II, it was able to successfully defend its freedom and resist invasions by the Soviet Union - albeit with some loss of territory. In the subsequent half century, the Finns made a remarkable transformation from a farm/forest economy to a diversified modern industrial economy; per capita income is now among the highest in Western Europe. A member of the European Union since 1995, Finland was the only Nordic state to join the euro system at its initiation in January 1999.
LocationNorthern Europe, bordering the Baltic Sea, Gulf of Bothnia, and Gulf of Finland, between Sweden and Russia
Area(sq km)total: 338,145 sq km
land: 303,815 sq km
water: 34,330 sq km
Geographic coordinates64 00 N, 26 00 E
Land boundaries(km)total: 2,654 km
border countries: Norway 727 km, Sweden 614 km, Russia 1,313 km

Coastline(km)1,250 km

Climatecold temperate; potentially subarctic but comparatively mild because of moderating influence of the North Atlantic Current, Baltic Sea, and more than 60,000 lakes

Elevation extremes(m)lowest point: Baltic Sea 0 m
highest point: Haltiatunturi 1,328 m
Natural resourcestimber, iron ore, copper, lead, zinc, chromite, nickel, gold, silver, limestone
Land use(%)arable land: 6.54%
permanent crops: 0.02%
other: 93.44% (2005)

Irrigated land(sq km)640 sq km (2003)
Total renewable water resources(cu km)110 cu km (2005)
Freshwater withdrawal (domestic/industrial/agricultural)total: 2.33 cu km/yr (14%/84%/3%)
per capita: 444 cu m/yr (1999)
Natural hazardsNA
Environment - current issuesair pollution from manufacturing and power plants contributing to acid rain; water pollution from industrial wastes, agricultural chemicals; habitat loss threatens wildlife populations
Environment - international agreementsparty to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
signed, but not ratified: none of the selected agreements
Geography - notelong boundary with Russia; Helsinki is northernmost national capital on European continent; population concentrated on small southwestern coastal plain
Population5,250,275 (July 2009 est.)
Age structure(%)0-14 years: 16.4% (male 438,425/female 422,777)
15-64 years: 66.8% (male 1,773,495/female 1,732,792)
65 years and over: 16.8% (male 357,811/female 524,975) (2009 est.)
Median age(years)total: 42.1 years
male: 40.5 years
female: 43.7 years (2009 est.)
Population growth rate(%)0.098% (2009 est.)
Birth rate(births/1,000 population)10.38 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)10.07 deaths/1,000 population (July 2009 est.)

Net migration rate(migrant(s)/1,000 population)0.68 migrant(s)/1,000 population (2009 est.)
Urbanization(%)urban population: 63% of total population (2008)
rate of urbanization: 0.8% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)at birth: 1.04 male(s)/female
under 15 years: 1.04 male(s)/female
15-64 years: 1.02 male(s)/female
65 years and over: 0.68 male(s)/female
total population: 0.96 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)total: 3.47 deaths/1,000 live births
male: 3.78 deaths/1,000 live births
female: 3.15 deaths/1,000 live births (2009 est.)

Life expectancy at birth(years)total population: 78.97 years
male: 75.48 years
female: 82.61 years (2009 est.)

Total fertility rate(children born/woman)1.73 children born/woman (2009 est.)
Nationalitynoun: Finn(s)
adjective: Finnish
Ethnic groups(%)Finn 93.4%, Swede 5.6%, Russian 0.5%, Estonian 0.3%, Roma (Gypsy) 0.1%, Sami 0.1% (2006)

Religions(%)Lutheran Church of Finland 82.5%, Orthodox Church 1.1%, other Christian 1.1%, other 0.1%, none 15.1% (2006)
Languages(%)Finnish 91.2% (official), Swedish 5.5% (official), other 3.3% (small Sami- and Russian-speaking minorities) (2007)

Country nameconventional long form: Republic of Finland
conventional short form: Finland
local long form: Suomen tasavalta/Republiken Finland
local short form: Suomi/Finland
Government typerepublic
Capitalname: Helsinki
geographic coordinates: 60 10 N, 24 56 E
time difference: UTC+2 (7 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
Administrative divisions6 provinces (laanit, singular - laani); Ahvenanmaan Laani (Aland), Etela-Suomen Laani (Southern Finland), Ita-Suomen Laani (Eastern Finland), Lansi-Suomen Laani (Western Finland), Lapin Laani (Lapland), Oulun Laani
Constitution1-Mar-00

Legal systemcivil law system based on Swedish law; the president may request the Supreme Court to review laws; accepts compulsory ICJ jurisdiction with reservations

Suffrage18 years of age; universal
Executive branchchief of state: President Tarja HALONEN (since 1 March 2000)
head of government: Prime Minister Matti VANHANEN (since 24 June 2003); Deputy Prime Minister Jyrki KATAINEN (since 19 April 2007)
cabinet: Council of State or Valtioneuvosto appointed by the president, responsible to parliament
elections: president elected by popular vote for a six-year term (eligible for a second term); election last held 15 January 2006 (next to be held in January 2012); the president appoints the prime minister and deputy prime minister from the majority party or the majority coalition after parliamentary elections and the parliament must approve the appointment; Prime Minister VANHANEN reelected 17 April 2007
election results: percent of vote - Tarja HALONEN (SDP) 46.3%, Sauli NIINISTO (Kok) 24.1%, Matti VANHANEN (Kesk) 18.6%, Heidi HAUTALA (VIHR) 3.5%; a runoff election between HALONEN and NIINISTO was held 29 January 2006 - HALONEN 51.8%, NIINISTO 48.2%; Matti VANHANEN reelected prime minister; election results 121-71
note: government coalition - Kesk, KOK, VIHR, and SFP
Legislative branchunicameral Parliament or Eduskunta (200 seats; members are elected by popular vote on a proportional basis to serve four-year terms)
elections: last held 18 March 2007 (next to be held March 2011)
election results: percent of vote by party - Kesk 23.1%, Kok 22.3%, SDP 21.4%, VAS 8.8%, VIHR 8.5%, KD 4.9%, SFP 4.5%, True Finns 4.1%, other 3.4%; seats by party - Kesk 51, Kok 50, SDP 45, VAS 17, VIHR 15, SFP 9, KD 7, True Finns 5, other 1

Judicial branchSupreme Court or Korkein Oikeus (judges appointed by the president)

International organization participationADB (nonregional member), AfDB (nonregional member), Arctic Council, Australia Group, BIS, CBSS, CE, CERN, EAPC, EBRD, EIB, EMU, ESA, EU, FAO, G-9, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, NC, NEA, NIB, NSG, OAS (observer), OECD, OPCW, OSCE, Paris Club, PCA, PFP, Schengen Convention, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNMIL, UNMIS, UNMOGIP, UNTSO, UPU, WCO, WEU (observer), WFTU, WHO, WIPO, WMO, WTO, ZC
Flag descriptionwhite with a blue cross extending to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag); the blue represents the thousands of lakes scattered across the country, while the white is for the snow that covers the land in winter

Economy - overviewFinland has a highly industrialized, largely free-market economy with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important; Finland's ratio of exports to GDP has risen from a quarter to 37% over the past 15 years. Finland excels in high-tech exports such as mobile phones. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Although Finland has been one of the best performing economies within the EU in recent years and its banks and financial markets have avoided the worst of global financial crisis, the world slowdown has hit export growth and domestic demand and will serve as a brake on economic growth in 2009 and 2010. The slowdown of construction, other investment, and exports will cause unemployment to rise. During 2009, unemployment will climb to over 8% of the labor force. Long-term challenges include the need to address a rapidly aging population and decreasing productivity that threaten competitiveness, fiscal sustainability, and economic growth.
GDP (purchasing power parity)$194 billion (2008 est.)
$192.4 billion (2007 est.)
$184.8 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate)$271.9 billion (2008 est.)
GDP - real growth rate(%)0.8% (2008 est.)
4.1% (2007 est.)
4.9% (2006 est.)
GDP - per capita (PPP)$37,000 (2008 est.)
$36,700 (2007 est.)
$35,300 (2006 est.)
note: data are in 2008 US dollars
GDP - composition by sector(%)agriculture: 2.8%
industry: 32.4%
services: 64.9% (2008 est.)
Labor force2.703 million (2008 est.)

Labor force - by occupation(%)agriculture and forestry 4.5%, industry 18.3%, construction 7.3%, commerce 16%, finance, insurance, and business services 14.5%, transport and communications 7%, public services 32.4% (2008)
Unemployment rate(%)6.4% (2008 est.)
6.9% (2007 est.)
Population below poverty line(%)NA%
Household income or consumption by percentage share(%)lowest 10%: 3.6%
highest 10%: 24.7% (2007)
Distribution of family income - Gini index29.5 (2007)
25.6 (1991)
Investment (gross fixed)(% of GDP)20.6% of GDP (2008 est.)
Budgetrevenues: $143.8 billion
expenditures: $132.3 billion (2008 est.)
Inflation rate (consumer prices)(%)4.1% (2008 est.)
2.5% (2007 est.)

Stock of money$NA (31December 2008)
$NA (31 December 2007)
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders
Stock of quasi money$NA (31 December 2008)
$NA (31 December 2007)
Stock of domestic credit$241.1 billion (31 December 2008)
$225.4 billion (31 December 2007)
Market value of publicly traded shares$NA (31 December 2008)
$369.2 billion (31 December 2007)
$265.5 billion (31 December 2006)
Public debt(% of GDP)33.7% of GDP (2008 est.)
46.8% of GDP (2004 est.)
Agriculture - productsbarley, wheat, sugar beets, potatoes; dairy cattle; fish
Industriesmetals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing

Industrial production growth rate(%)0.4% (2008 est.)

Current account balance$5.518 billion (2008 est.)
$10.12 billion (2007 est.)
Exports$96.62 billion (2008 est.)
$90.2 billion (2007 est.)

Exports - commodities(%)electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber
Exports - partners(%)Russia 11.6%, Sweden 10%, Germany 10%, US 6.4%, UK 5.5%, Netherlands 5.1% (2008)
Imports$87.51 billion (2008 est.)
$78.22 billion (2007 est.)

Imports - commodities(%)foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, grains
Imports - partners(%)Russia 16.3%, Germany 15.7%, Sweden 13.6%, Netherlands 6.3%, China 5.1%, UK 4.2% (2008)

Reserves of foreign exchange and gold$8.346 billion (31 December 2008 est.)
$8.385 billion (31 December 2007 est.)
Debt - external$339.5 billion (31 December 2008)
$314.1 billion (31 December 2007)

Stock of direct foreign investment - at home$84.44 billion (31 December 2008 est.)
$88.69 billion (31 December 2007 est.)
Stock of direct foreign investment - abroad$116 billion (31 December 2008 est.)
$114.2 billion (31 December 2007 est.)
Exchange rateseuros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Currency (code)euro (EUR)

Telephones - main lines in use1.65 million (2008)
Telephones - mobile cellular6.83 million (2008)
Telephone systemgeneral assessment: modern system with excellent service
domestic: digital fiber-optic fixed-line network and an extensive cellular network provide domestic needs
international: country code - 358; submarine cables provide links to Estonia and Sweden; satellite earth stations - access to Intelsat transmission service via a Swedish satellite earth station, 1 Inmarsat (Atlantic and Indian Ocean regions); note - Finland shares the Inmarsat earth station with the other Nordic countries (Denmark, Iceland, Norway, and Sweden)
Internet country code.fi; note - Aland Islands assigned .ax
Internet users4.383 million (2008)
Airports148 (2009)
Pipelines(km)gas 694 km (2008)
Roadways(km)total: 78,141 km
paved: 50,914 km (includes 700 km of expressways)
unpaved: 27,227 km (2009)

Ports and terminalsHamina, Helsinki, Kokkola, Kotka, Naantali, Pori, Raahe, Rauma, Turku
Military branchesFinnish Defense Forces (FDF): Army, Navy (includes Coastal Defense Forces), Air Force (Suomen Ilmavoimat) (2007)
Military service age and obligation(years of age)18 years of age for male voluntary and compulsory - and female voluntary - national military and nonmilitary service; service obligation 6-12 months; mandatory retirement at age 60 (2008)
Manpower available for military servicemales age 16-49: 1,169,910
females age 16-49: 1,121,187 (2008 est.)
Manpower fit for military servicemales age 16-49: 962,479
females age 16-49: 920,297 (2009 est.)
Manpower reaching militarily significant age annuallymale: 33,784
female: 32,621 (2009 est.)
Military expenditures(% of GDP)2% of GDP (2005 est.)
Disputes - internationalvarious groups in Finland advocate restoration of Karelia and other areas ceded to the Soviet Union, but the Finnish Government asserts no territorial demands

Electricity - production(kWh)77.24 billion kWh (2007 est.)
Electricity - production by source(%)fossil fuel: 39%
hydro: 18.7%
nuclear: 30.4%
other: 11.8% (2001)
Electricity - consumption(kWh)86.9 billion kWh (2008)
Electricity - exports(kWh)3.335 billion kWh (2008 est.)
Electricity - imports(kWh)16.11 billion kWh (2008 est.)
Oil - production(bbl/day)9,789 bbl/day (2008 est.)
Oil - consumption(bbl/day)215,600 bbl/day (2008 est.)
Oil - exports(bbl/day)133,000 bbl/day (2008 est.)
Oil - imports(bbl/day)347,400 bbl/day (2008 est.)
Economic aid - donorODA, $1.023 billion (2007)

Oil - proved reserves(bbl)0 bbl
Natural gas - production(cu m)0 cu m (2008 est.)
Natural gas - consumption(cu m)4.735 billion cu m (2008 est.)
Natural gas - exports(cu m)0 cu m (2008)
Natural gas - proved reserves(cu m)0 cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)less than 0.1% (2007 est.)
HIV/AIDS - people living with HIV/AIDS2,400 (2007 est.)
HIV/AIDS - deathsfewer than 100 (2003 est.)
Literacy(%)definition: age 15 and over can read and write
total population: 100%
male: 100%
female: 100% (2000 est.)

School life expectancy (primary to tertiary education)(years)total: 17 years
male: 17 years
female: 18 years (2006)
Education expenditures(% of GDP)6.4% of GDP (2005)



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