Universiti Tunku Abdul Rahman

Bachelor of Engineering (Hons.) Chemical Engineering

UEMK3242 Renewable Fuel Energy
May 2014

Project: Renewable Fuel Energy in the World

Title: How does wind energy and biofuel energy benefits Finland?

Group: FINLAND (18)
Name: M1: Liew Brian ID: 1002350 Year/Tri: Y3S2 100/100
M2: Gwee Ren Yang ID: 1002427 Year/Tri: Y3S3 100/100



Assessment Mark
Introduction /5
Status of renewable fuel energy production /15
Status of renewable fuel consumption and demand /15
Future prospects of renewable fuel energy production /15
Challenges of renewable fuel energy development: /10
One topic agreed with the lecturer /10
Organization/Formatting/Coordination /5
Grammar/Writing Skill /5
Citation/References /5
SUBTOTAL
/85
Review
M1: /15
M2: /15
M3: /15
Total
M1: /100 M2: /100 M3: /100




1

Index

Number Content Page
1 Introduction 2 3
2 Status of renewable fuel energy production 4 8
3 Status of renewable fuel consumption and
demand
9 12
4 Future prospects of renewable fuel energy
production

13 15
5 Challenges of renewable fuel energy
development

16 17
6 How does renewable energy source benefits
Finland?
18 20
7 Reference 21

































2

Introduction
Introduction for wind energy:
Wind power technologies involve the transformation of kinetic energy which is harvest from wind
energy into useful mechanic power. The kinetic energy harvest from the air flows provides the
motive force which causes wind turbine blades to rotate via a drive shaft. This provides sufficient
mechanical energy to power up the generator in the wind turbine which results in the production of
electricity.
Wind power has been used by mankind as a power source since ancient times. However, in the
nineteen century, the invention of steam engine made the industrial revolution to be possible by
providing cheap highly demand mechanical and electrical energy by the possibility of taking
advantage of waste heat.
Steam engines did not depend on fickle of winds where the main source of energy needed to power
it is heat. This caused a big leaped in the industrial revolution. The success of industrial revolution
relied on steam engine lead to the declined importance of seeing wind energy as a useful source.
In 1979, the revolution of wind power begun by the mass production of wind turbines by Danish
manufacturers such as Kuriant, Vestas, Nortank and Bonus. The wind turbines manufactured at
early stage had relatively small capacities in the range of 10kW to 30 kW.
At our current modern age, the average size of a wind turbine is around 1.16MW, where the latest
projects launched uses wind turbines between 2-3MW. Nowadays, wind turbines are being built in a
group where this action is known as the wind farm. Wind farms comprise the wind turbine,
buildings and grid connection points.
Wind power technologies come in various sizes and can be categorized as vertical axis wind
turbines (VAWT) or horizontal axis wind turbines (HAWT). Wind turbines can also be categorized
by location whether they are located onshore or offshore.
Power generation of a wind turbine is considered by factors such as capacity of the turbine, wind
speed, and diameter of the rotors. The main factor falls on the wind speed, where if the wind speed
for the particular season is low, low levels of electricity will be produced.
Majority of large scale wind turbines are made up of three blades rotating around the horizontal axis.
Such wind turbines account for majority utility scale wind turbines installed. Vertical scale wind
turbines are less aerodynamically efficient compared to horizontal axis wind turbines.
Large wind turbines are generally used to produce large amount electrics which are mainly for
industrial usage. Small wind turbines are also used in the modern era and can be used to power
remote or off-grid applications such as homes, beacons, or farms.
Intermediate sized power systems within the range of 100kW to 250 kW can be used to power a
village and can be connected off-grid. Such turbines can be coupled together with diesel generators
and other distributed energy source for remote usage where there is no grid access. Small scales
wind turbines are emerging as important as intermediate and large scale wind turbines for it will be
useful for rural communities.

Introduction for biofuel energy:
Finland is a land of abundance and consists of many growing forests. Finland's land area is
31million hectares, of which 26million hectares (86%) is forestry land, and 20 million hectares is
forest. Renewable energy in Finland consist of 22% of forest industry black liquor and 16% of wood
residues. Finland was the third country in Europe out of other 30 country which in producing and
sharing the renewable energy.
In Finland, cross border biomass streams have been on the increase during the past decade. The
foreign raw wood which the forest industry has imported primarily for raw material has become a
more important source of bioenergy. The production of wood pellets started in the late 1990s and
3

has since been on the increase. More than 80% of the produced pellets in Finland have been
exported.
In 2013, it is believed that Finnish scientists have found a way to turn dead wood into high quality
biofuel for less than one euro a litre. They believe that they can convert more than half the energy of
raw wood - ligno-cellulosic biomass, if you prefer the technical term- into something that would
drive a taxi, a tractor or a tank.
First generation biofuels are made from sugar, starch, and vegetable oil. Advanced biofuels are
produced from a broader range of feedstock, including wood, straw, and algae. Advanced biofuels
are still under development and require further research to be carried out. However, significant
progress has been made and several countries are scaling up production of advanced biofuels,
including the United States, Brazil, Denmark, Finland, and Italy.
Finland has plenty of wood raw materials and top-level know-how for the production technologies
of 2nd generation biofuels. The forest industry has already announced significant investments in
next-generation pulp plants, into which the production of bio-refining products could also be
integrated

Figure1: A stack of logs is pictured at the Forestry and Paper industry UPM-Kymmene factory in
Pietarsaari in 2009. Finnish papermaker UPM said it plans to build the world's first industrial scale
plant to refine a byproduct of wood pulp into biodiesel.

Figure2: Neste Oil's first biodiesel plant in Porvoo.

4

Status of renewable fuel production
Status of wind energy production:

The graph above indicates the production of wind energy by using wind turbines in Finland from
1997 up till May of 2014. From the graph above, we are able to see that wind production from 2000
2002 decreased from 77 GWh/year till 63 GWh/year. From the trend of the graph from 2013 -
2014 we are able to notice there is a decrease of production of Wind energy. This is because at 2014,
the production data recorded is only up till May 2014. By overall, since 1997, the production of
wind energy has been increasing steadily.
Wind power production from grid connected turbines in Finland during 2009 was 277 GWh/year.
This corresponds to 0.3% of Finlands electricity consumption. In 2009 Finland had a total of 118
working wind power plants with a total capacity of 146 MW. In year 2009, Finland had low wind
resources, the weighed production index was 83% and the capacity factor of standard wind power
plants was 91% in 2009.
Wind power production from grid connected turbines in Finland during 2010 was 294 GWh/year.
This corresponds to 0.3% of Finlands electricity consumption. In 2010 Finland had a total of 130
working wind power plants with a total capacity of 196 MW. In year 2010, Finland had low wind
resources, the weighed production index was 74% and the capacity factor of standard wind power
plants was 89% in 2010.
Wind power production from grid connected turbines in Finland during 2011ss was 481 GWh/year.
This corresponds to 0.6% of Finlands electricity consumption. In 2011 Finland had a total of 131
working wind turbines with a total capacity of 199 MW. In year 2011, Finland had high wind
resources, the weighed production index was 98% and the capacity factor of standard wind power
plants was 88.5% in 2011.
Wind power production from grid connected turbines in Finland during 2012 was 494 GWh/year.
This corresponds to 0.6% of Finlands electricity consumption. In 2012 Finland had a total of 153
working wind turbines with a total capacity of 257 MW. In year 2012, Finland had high wind
resources, the weighed production index was 91% and the capacity factor of standard wind power
plants was 88.5% in 2012.
Wind power production from grid connected turbines in Finland during 2013 was 771 GWh/year.
This corresponds to 1.0% of Finlands electricity consumption. In 2013 Finland had a total of 211
working wind turbines with a total capacity of 447 MW. In year 2013, Finland had high wind
5

resources, the weighed production index was within the range of 91% to 110% in different regions
and the capacity factor of standard wind power plants was 100% in 2013.
From the graph above, we are able to see that, wind plays a major role in the production of
electricity of wind turbine. Even if there is a large amount of wind turbines, but if the wind
resources are low by that year, the overall production of electricity will not be significant.
Furthermore, from the above report, we are able to see that as we increase the amount of turbines,
the amount of electricity able to be produced by harnessing wind energy increases. From year 2009,
the total electricity production corresponds to the electricity consumption of Finland by 0.3%, by
2013 due to the increase of wind turbine, the total electricity production corresponds to the
electricity consumption of Finland by 1.0%.
By looking at the graph below, we are able to see that the production of electricity (GWh) by wind
turbines varies greatly. This is because wind plays a major role in the production of electricity by
wind turbines. As, we are able to see that there is no constant pattern to be anticipated from the
production of electricity by wind turbines, for wind comes by nature and cannot be control by
mankind. The only method for us to harvest more wind energy to produce higher amount of
electricity lies on the amount of wind turbines provided.


Wind speeds vary from time to time and causes wind turbines to be unable to produce energy
consistently. There are times where wind turbines are not able to generate and electricity. Therefore,
wind power cannot be totally relied on as the sole source of energy whereby consumers must have
access to electricity from other sources to fill in the production problem by wind turbines.

In Finland these problems are not serious, as there are few days when there is no wind at all, and
wind power will only be used to produce part of the countrys electricity. If total wind power
capacity eventually exceeds the total variations in electricity demand, this would make Finland
dependent on wind power for part of the baseload demand for energy, so a reserve power source
would have to be available for when wind conditions are unfavourable.

Status of biofuels production in Finland
Process of biofuel production in Finland
Biofuel is considered to be the most pure and the easiest available fuels on the planet. In the process
of manufacturing the biofuels in Finland, all the fats and oil are turned into esters, separating the
glycerin. At the end of the process, all the glycerin sinks down at the bottom and all the biofuels
rests at top. The process through which the glycerin is separated from the biodiesel is known as
6

transesterification. Some of the chemicals which are used in the manufacturing of biofuels are
ethanol or methanol which brings into use methyl esters.
Ethanol, for instance, can be made from sugars (like sugar beets and sugarcane), grains (like maize
and wheat), cellulose(grass or wood), and waste products (like crop waste or municipal waste). Up
to 10 percent ethanol can be blended with gasoline and used in standard vehicles, whereas specially
made flexible-fuel vehicles can be use any proportion of ethanol and gasoline.
One of the advantages using ethanol is that they can be distilled even at the home without any
problem. Besides, ethanol can be process in the type of continuous process which mean it can be
runs all the time. This make the rate of reaction faster and few workers is needed. Lastly, the main
advantages of using non-renewable ethene are because the end product is pure.
With the continuously growth of biofuels, it significantly lessen Finland dependence on imported
oil, strengthening national security and reducing Finland's trade deficit. As the biofuel obligation
becomes more stringent in the future, Finland intends to increase her domestic biofuels production
in order to benefit from the so called double credit mechanism provided in the Directive. This means
that biofuels made out of certain raw materials will count double towards the goal of the biofuel
obligation.
Finland has a plenty of wood raw materials and top-level know-how for the production technologies
of 2nd generation biofuels. The forest industry has already announced significant investments in
next-generation pulp plants, into which the production of bio-refining products could also be
integrated. Finland has extensively utilized VTT's top-level know-how in different fields in the
project. The significance of research and development activities is central in combating global
warming.
By further processing crude tall oil UPM is able to utilize the wood it uses for its pulp production in
a more efficient way without increasing wood harvesting. UPMs wood sourcing is based on the
principles of sustainable forest management, chain of custody and forest certification. UPM does not
use raw materials suitable for food.
On 1 January 2011, the ethanol concentration of 95 octane petrol was raised in Finland in order to
ensure that the legislative transport biofuel obligation will be met. The increase in petrol ethanol
concentration is one of many measures aimed at achieving the environmental targets set for the
transport sector.
Finlands goal in the countrys long-term climate and energy strategy is to reduce the carbon
dioxide emissions from road transport by 15 percent from their 2005 level by the year 2020. This
means that Finland strives to reduce her carbon dioxide emissions by some 4 million tonnes, one
fourth of which should be achieved by increasing the share of renewable energy in transport, in
other words by increasing the use of biofuels.

Figure3: show the density of forest in landspace within Finland.
7

Finland is the most densely forested country in the European Union. Forests cover 23 million
hectares which represents about 75% of the total land area. Apart from the most southern parts of
the country, Finland belongs to the boreal coniferous forest zone. The most common tree species
are Scots pine (50% of the volume), Norway spruce (30%) and broadleaves, mainly birch (20%).
Because of the remarkable forest coverage rate, the forest industries are the second largest branch
among all industries in Finland
In 2006, the total forest industrial energy consumption was reported as 282,000 TJ, the energy
distributions were: 75% from wood-based fuel, 5% from peat, 15% from natural gas; 4% from the
heavy fuel and about 1% from other energy sources. About 80% of bio-fuels in Finland are
produced by forest industry and around 40% of the total wood raw material in forest industry is used
for production of bio-energy from bio-fuel.
Although the percentage of wood based bio-fuel consumption is over 75%, however, the energy in
forms of electricity and high temperature, high pressure steam are required in the forest industry,
because the power generation from bio-fuel is not capable to supply the whole forestry industries,
which makes the fossil fuels and other energy supplies like nuclear powered electricity is still
needed.
The total volume of the growing stock in Finish forests amounts to 2.189 million m
3
over bark.
Since the late 1960s, the volume and increment of the growing stock have continuously risen and is
now 47% higher than four decades ago. The annual increment was 98.5million m
3
, whereas the
annual drain is around 55-65million m
3
. Maximum sustainable removal for 20062015 is predicted
as 72 million m
3
per year. During the early 2000s the amount of wood harvested from private forests
has ranged approximately from 40 to 50 million m
3
of wood annually. In 2006 roundwood
consumption in Finland totalled 81.5 million m
3
of which 90% was used in the forest industries and
the additional 10% for energy generation. Finland is one of the leading countries when it comes to
utilizing wood for energy purposes. Wood-based fuels currently cover one fifth of the total energy
consumption in Finland.

Figure: commercial roundwood removals by forest ownership category, 1970-2006.

Minister of Employment and the Economy of Finland believe their country has excellent
opportunities to become the global leader in biofuel production. In Finland, the share of biofuels
used in traffic will rise to 20 percent by 2020 compared with the obligation for the whole EU of 10
8

percent. Finland Government has implemented a significant programme of biofuel production based
on its resources of raw materials and its technology competence. The Minister said that forestry is
modernizing, the bio-economy on the rise, during this decade, the goal of Finland is to get a few
large-scale refineries.
It is believe there to be quite major business opportunities for exporting such technology which are
sizeable investment, 400-600 millions euro each. This leads to significant subsidy opportunity for
bio refineries in the form of income to the commission from sales of carbon emissions trading rights
under new trading period. Currently, there are applications for three bio refinery projects (UPM,
Neste-Stora and Metsliitto-Vapo) have been submitted to the Ministry of Employment and the
Economy.
These up-coming projects will increased use of second generation biofuels in road transport would
provide Finland with the most cost-effective way to reduce greenhouse gas emission but the
sustainability criteria of biofuels and their actual production cost still include many uncertainty
factors that may have a significant effect on the different scenarios.
The exporting and importing volumes of biofuels in Finland has previously been investigated in
1999 within the AFB net project A compendious study on biofuel export and import flows and the
reasons behind them carried out in autumn 2004 within the IEA Bioenergy Task 40 has been
starting point for this study.
Double credit biofuels will be those manufactured of waste and residue materials, as well as non-
food cellulose materials and lignocellulose materials.
Bioethanol produced in Finland of waste and residue materials as well as biodiesel produced of
logging waste meet the criteria for double credit biofuels. Their raw material may be waste, residue
or other non-food cellulose and lignocellulose materials.

The life cycle emissions of this type of biofuels are as much as 80-90 per cent lower than those of
fossil fuels. Increase of domestic biofuel production will improve Finland's energy self-sufficiency
and security of supply and decreases the country's dependence on fossil




















9

Status of renewable fuel consumption and demand
Status of wind energy consumption and demand:
Finland offers attractive opportunities in renewable energy fuel, this action attracts investors which
are seeking for new market. Opportunities of renewable energy fuel market in Finland are unique
even on a European scale.
For the overall consumption of renewable energy, Finland is said to be one of the leaders in Europe
whereby the renewable energy consumption is currently at 33% (2014).
Before 2011 wind energy development has been very slow but wind energy development has been
increasing after the new tariff system was introduced in 2011, whereby a guaranteed price of 85.30
EUR/MWh is set for wind power, whereby the difference between the guaranteed price and spot
price of electricity will be paid to producers as a premium. A higher guaranteed price of 105.30
EUR/MWh until the end of 2015 encourages the citizens of Finland to invest in building wind
turbines.
By introducing the new tariff system, the rise in interest in the Finnish wind power market could be
seen among the Finns whereby according to a survey carried out by the Federation of Energy
Industries in spring 2012, over 89% of Finns would like to see more wind power installed.
Due to the increase of demand in wind energy production, in 2012, there a total of seven wind farms
installed with six 3MW turbines in Simo, two 1.8MW turbines in Hamina, one 2MW turbine in
Kemi, eight 3MW turbines in Ii, ten 3-MW turbines in Tervola, and one 3.6-MW pilot plant in
Vaasa. Several other wind farms are in the building phase, so the new installed capacity during 2013
will be 120130 MW.
At the end of 2012, the total capacity was 288 MW and 162 wind turbines were operating in
Finland. The average wind turbine size installed in 2012 was 2.8 MW, and for the total installed
capacity the average is 1.8 MW.
Currently, almost 1 percent of the Finnish electricity demands are met by electricity generated from
wind energy. In 2013, 50 new wind turbines with a capacity of 162 megawatts (MW) were installed
and connected to the electricity grid in Finland bringing the total installed capacity to 448 MW.
During 2014, the installation of at least 80 turbines with a capacity of 190 MW is expected.
The Finish government plans to achieve a 7% target for wind energy production in 2020. In order to
achieve a 7% target of wind energy production in 2020, the Finish government is aiming to generate
and increase the use of wind power with a target of 6TWh by 2020. This would require the
construction of around 700 new wind turbines and a capacity of 2500MW. The following graph is
the forecasted results of total wind power capacity to be installed from 2014-2020.


10


Status of bio fuels consumption and demand
Global economic development and the growth in demand for petroleum play a part in shaping
biofuel demand. Demand for biofuel has grown steadily in recent years as a result of rising bio-
mandated content levels and growing demand for fossil diesel. There were 21 million tons of
biodiesel demands in 2012. In order to meet up with the target set by Finish government in 2020,
wood-based biomass underpins over 75% of the nation's planned activities.
Biofuels comprise up to 40 percent of transport:
The largest emission reductions can be achieved in the transport sector by using second-generation
biofuels that can be used in existing vehicle fleet. The share of biofuels in road transport would
increase to as high as 40% in 2030. Cost will rapidly decrease if the emission goal is below 36% in
sectors outside EU ETS. This would require expensive investments to be made in Finland to reduce
emissions.
The use of greenhouse gases can only be reduced by a small amount, mainly through decreased use
of fertilizers. The sustainability criteria of biofuels still include many uncertainty factors that may
have a significant effect on the Finland's economy. The amount of subsidies for biofuels production
will increase to around EUR 1,500 million cumulatively for the years 2020-2030.
Generally, the impact on the economy package appears to remain moderate with regard to the
national economy. If the goals set for Finland can be achieved primarily through the increased use of
biofuels. The calculations are based on the biofuels used being produced from domestic wood based
raw materials. The assumption was that bio-refineries would increase Finland's refinery capacity,
which would open up possibilities for an increase in the export of refined petroleum products

Demand for renewable fuels is growing rapidly, and by 2020 the global market for biodiesel is
projected to be about 35 million t/a. Demand for renewable fuels is spurred by mandated usage
levels and new legislation under development in the field worldwide. The rapid growth of the corn-
based ethanol industry shows the potential for biofuels. However for biofuels to make a substantial
contribution to the domestic liquid fuel supply, the industry must expand beyond corn-based
ethanol.
The Finnish forestry industry has a great deal of experience in raw wood exportation. During the 15-
year period between, 1990 and 2004 annual raw wood consumption in the forestry industry
increased from 51.2 million to 74.9 million cubic meters. In the same period, the volume of foreign
rose from an annual level of 6.0 million cubic meters to 17.4 million cubic's meters. In 2004, the
proportion of imported raw wood provides 80% of the total raw wood import.


Table 1: imported biomass flows in
2004[4]
CN code volume price (/t)
round wood - 12,015,768 45.2
Chips 44012100 1458672 53.4
sawdust of wod 44013010 39146 17.3
wood waste and
scrap 44013090 146226 21.9
fuel wood 44011000 110463 17.6
tall oil 38030010 57690 192.9
Peat 27030000 46660 28.7
ethanol 22070000 23355 529.2

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Table 2: exported biomass flows in
2004[4]
CN code volume price (/t)
round wood - 474578 81.9
Chips 44012100 111258 58.8
sawdust of wod 44013010 515 227.3
wood waste and
scrap 44013090 164261 89.9
fuel wood 44011000 4083 108.9
tall oil 38030010 120544 238.4
Peat 27030000 116348 88
ethanol 22070000 0 0

The largest biofuel exportation flow in Finland consists of wood pellet. The production of wood
pellet at an industrialized level started in Finland in 1998, and the production volume has increased
rapidly. The pellet production in 2004 was estimated to be 225000 tons. In the early years Finnish
pellet production was totally founded on exportation. In recent years, the domestic consumption of
pellets has increased.
The action plan does not state a clear opinion for the introduction of biofuels as traffic fuel. A
preliminary target of 3.1 petajoule(PJ) in 2010 for biofuels consumption in traffic is presented. The
European Union directive has set a target of 5.75% usage in traffic by the end of 2010. In Finland,
the target of directive would mean approximately a 10.5 PJ growth of biofuels usage in the traffic
sector from the zero level in 2004.
The Finland national energy and climate energy is being revised and the renewed strategy will be
introduced in autumn 2005. The new energy strategy is expected to take a stand on biofuel use in
traffic.
The Government employs energy taxation, tax relief, and production subsidies for electricity and
forest chips, investment subsidies and funding of research and developments projects as financial
measure to implement the energy policy.
The domestic production volume of biomass fuels is an important element that will affect the trade
balance of biomass fuels. In the following, the estimated, the estimated production potentials of
forest industry by-products and forest chips are summarized.
In 2010 the total supply of forestry industry by-products for energy use was estimated to be 101PJ,
when the amount in 2002 was 97 PJ. The theoretical potential includes sawdust, bark and industrial
chips but exclude pulp chips. A part of the sawdust and industrial chips is used as raw material for
pulp, particleboard and pellet production. The theoretical supply potential of forest chips was
evaluated at 184PJ and the techno-economical potential at 86PJ in 2010. The largest share of techno
economical potential came from logging residues, 40PJ, whereas the share of the stumps was 22 PJ
and a small diameter energy wood 25PJ.
The domestic production potential of wood fuels is in theory sufficient to meet the usage targets.
However, in practice the geographical location of the forest chip resources compared to the usage
locations limit the possibilities to increase the usage. There are also exist competition between raw
materials and energy use of forestry industry by-product, especially for sawdust.



12


Table 3: realized energy use in 2004 and the
government

target for 2005 and 2010 by type of renewable energy
source, PJ
source of energy/year 2004 2005 2010
traditional firewood 44 50 54
forest chips 19 22 38
black liquor 158 143 154
solid processing residue 81 80 84
wood-based total 302 295 330
hydro power 53 49 52
other renewables 11 15 30
renewables total 366 359 412



































13

Future prospects of renewable fuel energy production

Future prospects of wind energy production:

Finland has good conditions for wind power production. The majority of wind farms have been built
along the coast, but there are also good wind conditions inland, where wind farms are currently
under construction and being planned.

Finland aims to increase the share of its renewable energy from 33% in 2014 to 38% of gross energy
consumption target in 2020. Finland sets its goal to achieve the production of 6.0 TWh during 2020.
It is estimated that Finland would then be able to cover about 7% of the 2020 electricity demand
with wind power. Though the realization of wind farms in Finland is challenging, there is strong
political support and public acceptance which aid industrial development. Additionally, the wind
resource regime is favorable as it is almost constantly windy in Finland, especially near the coast.
Wind energy potential is located mostly at coastal areas. There is a huge technical potential offshore,
with ample shallow sites available. The deployment of wind energy has been relatively slow but
setting the target to 6.0 TWh/year for 2020. A market based feed-in tariff system which was
introduced in 2011 has led to the rush for best sites. The feed-in tariff guarantees wind farm
operators 105.30 euros per megawatt-hour until 2015. After that, the compensation will be reduced
to 83.50 euros per megawatt-hour. The higher feed-in tariff rate, available until 2015, creates
incentives to quickly energize and connect projects to the grid. Once connected, the feed-in tariff is
applicable for a period of twelve years.
At the end of 2013, a total of 211 turbines were installed producing 771GWh or 1.0% of gross
demand in Finland. This achievement brings Finland one step closer to achieving its goals in 2020.
Furthermore, Finland aspires to reduce its greenhouse gas emission by 80% by 2050. In order to do
so, Finland has to gather their technology experts to improve the production of electricity through
renewable energy sources.
The goal seems to be a hard one for Finland. Despite of the difficulties faced it is within Finlands
reach. But as long as all sectors that produce or consume energy cooperate reduction of carbon
dioxide will not be a problem.
Wind power industries can assist this matter by increasing the amount of wind turbines so that more
electricity can be generated and increase the efficiency of converting the kinetic energy harvest from
wind energy into electricity.
Finland plans to further extend the building of wind farms out into the sea. At 2014, offshore
turbines are built 10 20km from land, it is expected that 10 years from now, wind turbines will be
14

able to be build 80km away from the sea, whereby more stable wind resources can be harvest in
order to increase the output of electricity through wind turbines.
Future prospect of biofuels energy development
Fossil fuels like coal and oil has played a main part in humanity's recent history, providing a vast
energy source which has fuelled much of industrialization and society's development. These fuels
are still the primary sources of energy for the world's developed nations, and yet demand for oil
production is at an all-time high. Many experts and agencies in Finland have predicted that the rate
of world oil has already peaked and it will only decrease from now onwards as fewer and fewer oil
will be produced.
Current microbial biofuels is incredibly varied, and can both utilize and produce a wide variety of
useful molecules. In the future, scientific advance will only make these systems easier to work with,
because many microbial systems are well characterized and easy to manipulate genetically.
Currently, there is no biofuel option available which solves all of the economic and environmental
issues associated with fossil fuels, but the potential for both fine-tuning biofuel-producing
microbes, and genetically modifying species to be able to efficiently make use of otherwise useless
materials, makes microbial biofuels an important target for research.
In the national legislation on biofuel distribution requirements (1 January 2011) Finland has pushed
her target up to 20 percent. This is considered viable since Finland is able to increase her domestic
biofuels production with new technologies so to benefit from the so called double credit mechanism
provided by the Directive. The double credit biofuels will be manufactured from raw-materials such
as waste, residue materials, non-food cellulosic plant materials and lignocelluloses.

The Renewable Energy Directive is complemented by the Fuel Quality Directive (FQD), the goal of
which is to cut the carbon intensity of fuels by 10% by 2020, 6% being the binding obligation and 4
percent coming from voluntary measures. The obligatory part of the reduction is achieved by
increasing the proportion of biological components in fuels.
While Finland has numerous independent sawmilling companies, the big papermakers also have
their own highly automated sawmill units. Nothing is wasted in the overall process: high-quality
logs are sawn into timber, and the waste is used to make pulp or chipboard. Another important field
of production is plywood manufacture, mainly using birch. In addition, Finland has a wide range of
companies serving the forest industry in sectors such as forest machinery manufacture and the
provision of consultancy services (e.g. the global consulting firm Jaakko Pyry).
The increased use of second-generation biofuels in road transport would provide Finland with the
most cost-effective way of achieving the greenhouse gas emissions goals. When aiming at an
increase in biofuels use in Finland, both domestic and world market biofuels productions are
available.
In the near future years, the ethanol for blending with petrol will be imported to the EU primarily
from non-EU regions, mostly from Brazil. Biofuels may be counted in the biofuels obligations only
if they meet the EU biofuel sustainability criteria and the greenhouse gas emission reduction targets.

Micro-algae cultivation for biofuels:
We examine the aspects of micro-algae production that will eventually determine the future
economic viability and environmental sustainability.
There are some factors why Finland does not prefer algae-based fuel but more keen to wood-based
fuel. First of all, Algae cultivation requires the addition of nutrients primarily nitrogen, phosphorus
and potassium. Beside, Algae cultivation requires a source of carbon dioxide. Assuming algae have
15

a carbon mass fraction of 50% it follows that producing 1 kg dry algal biomass requires at least
1.83 kg CO
2
. It will release large amount of carbon dioxide which will definitely affect the
environment. The majority of the fossil fuel inputs to algae cultivation come from electricity
consumption during cultivation, and, where included, from natural gas used to dry the algae. Algae
are temperature sensitive and maintaining high productivity (particularly in PBRs) may require
temperature control. Both heating and cooling demand could increase fossil fuel use.











































16

Challenges of renewable fuel energy development
Challenges of wind energy development:
Wind projects located in areas with low temperatures and high chances of ice and snow would not
seem to be the ideal choice. Northern and Southern of Finland is covered in snow and has relatively
harsh weather conditions.
To build a wind project in Northern and Southern Finland is expensive to construct and maintain.
The sites of wind farms will be hard to be access which will result in higher risk to employees.
Special equipment will be required for wind turbines in cold regions as small amounts of ice may
significantly disrupt the collection of wind energy. Large accumulations of ice will lead to the stop
of anemometers and wind vanes in the wind turbine. Mast of the wind turbine requires to be very
slender, however in icy conditions, there is a tendency for large amounts of ice to form on the mast
which will greatly reduce the efficiency of collecting wind energy. The International Energy Agency
(IEA) wind special task force on cold climate projects recommends lattice towers for mounting
measuring instruments to reduce the formation of ice but this will greatly increase the cost. If the
cups of an anemometer gain even a small amount of ice, wind speeds can be underestimated by
about 30%.
Ongoing maintenance of cold-climate wind projects is vital. Up until now, relatively little
maintenance has been undertaken on blades, but as the sector matures, significant problems with
blades are being discovered. Flying ice particles has relatively similar properties to the sand which
will cause the edge and the trailing edge to have high levels of corrosion.
Once the blade cracks, water has high tendency to enter the gaps and freezes in it. A covered with
5mm of ice can reduce the power curve by as much as 80%, this will lead to the decrease of
efficiency of wind turbines which will result in high loss of money.
Another problem faced by the development of wind farms in Finland is the area needed to build it.
Majority of the farms are built on mainland but due to the sound pollution produced by the wind
turbines, people are starting to have objections in building wind farms on land. Building new wind
farms at offshores requires a lot of money. The construction costs for the floating foundations are
still so large so that the technique is not yet profitable in most cases.
The main problem faced by wind projects are costing. If this problem can be overcome, wind
projects will be able to flourish in greater lengths.

Challenges of biofuels development
In the past few years the changing world situation has generated intensive discussion about bio-
fuels, much of it promising a source of environment-friendly energy that would also be a boon to the
world's farmer. At the same time sceptics argue that bio-fuel production will threaten food supplies
for the poor and cannot bring any benefits to the environment. Thus, bio-fuels energy technology
need further advancement, investment and policy facilitating agricultural innovation and properly
considered the trade.
In order to minimise bio-fuels production competitive with food production, one of the suggestion is
the algae production that it could use marginal land. Solar radiation is one of the most important
factors influencing algal growth and to achieve high levels of production throughout the year. Thus,
it is more suitable for algae farm located on warm countries where its insolation rate is not less than
3000h yr-1. In other word, less warm countries such as Finland is not suit for this alternative
method.
The International Agency projected that biofuels would be competitive with petroleum at petroleum
prices of between US$60 and US$100 a barrel. The competitiveness of biofuels, however, depends
heavily on the relative prices of oil and of agricultural feedstock for biofuels. When the demand of
for biofuels increases agricultural price, the competitiveness of biofuels will start to decline, and
recent price for cereals in 2006 may signal such a trend.
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Biofuels include fuel sources that have been used for millennia, like fuel wood and charcoal, as well
as newer sources like ethanol, biodiesel, and biogas. These new sources depend on natural
vegetation, crops grown specifically for energy, or agricultural or other forms of waste and residues.
Processing makes this biofuels cleaner and more efficient than traditional forms of biofuels, and if
they are produced in a way that reduces net carbon emissions, they could contribute to mitigating
global climate change.
Regarding non GHG environmental impacts, research suggests that production of biofuel
feedstocks, particularly food crops like corn and soy, could increase water pollution from nutrients,
pesticides, and sediment. Increases in irrigation and ethanol refining could deplete aquifers. Air
quality could also decline in some regions if the impact of biofuels on tailpipe emissions plus the
additional emissions generated at bio-refineries increases net conventional air pollution.
Ethanol and biodiesel are two popular types of bio-fuels nowadays. Ethanol is used to mix with
petrol in varied ratios, including E5 (petrol containing five percent of ethanol), E10 (10 percent),
E85 (85 percent) and E100 (100 percent).
ethanol produced from grain can reduce 40 percent of greenhouse gas emissions compared to that
produced from petrol and up to 100 percent compared to that from cellulose and sugar cane;
biodiesel can reduce 70 percent compared to diesel oil. The contents of other exhaust fumes such as
CO, NO
x
, SO
x
and hydrocarbons all significantly decrease when using biofuel.
Almost the entire national territory of Finland is located between 60 and 70 degrees northern
latitude, and a quarter of its surface area lies north of the Arctic Circle (Fig. 1). The mean annual
temperature in Southern Finland is 4 to 5C, in Lapland 2 to +3C. In January, the mean annual
temperature in the northern two thirds of the country is 10 and 15C, in southern Finland it is 5
to 10C. Even in southern Finland, 30% of the annual precipitation stems from snow, which
remains on the ground for about four months. Under the cold climate remarkable amounts of energy
is needed for heating buildings. In the winter season, there is a very limited amount of full daylight,
necessitating electric lighting until late morning and as of early afternoon. The growth season of
agricultural wood is four months long only, thus, it will minimise the production rate of biofuels.

Finland government has set a target that 10% of traffic fuels should consist of biofuel by 2020 -
means Finland will get more production plants running as quickly as possible.



















18

How does renewable energy source benefit Finland
How does a wind energy source benefit Finland
Impacts on Economy
In year 2009, the cost of wind power production without subsidiaries ranges from 60 to 80 euro
dollars per megawatt hour. However, the average spot price of electricity by global suppliers for the
European region would only be 57 euros dollars per megawatt hour. To encourage the advancement
of wind power industries, government would have to allocate funding to compete with commercial
industries in supplying electricity.
While the implementation costs of wind energy requires subsidies to compete, wind power industry
has brought about positive economic impacts particularly within two areas, the economic turnover
of Finland and its employment rate. To date, an economic turnover of 0.8 billion euro dollars per
year has been generated. However, with the advancement of current technologies being expanded,
the technology industry expects an increase of the economic turnover to 3 billion euro dollars per
year in year 2020. Consequently, the global market shares were estimated to increase, giving an
economic turnover of 12 to 14 billion euro dollars per year.
Currently, there are more than 20 companies involved in the wind power industry which is supports
more than 3,000 employees. The expected growth in employment could increase up to 14,000 to
36,000 people in year 2020.
That being said, the projected turnover could be the key to overcome the underlying relations of the
deficit in funding towards research and development for wind power industry.
Reduction of Carbon Dioxide Emission
According to an article by CleanTechnica, carbon dioxide emissions are reduced by wind farms in
the overall electrical grid of 1:1 basis. While the use of fossil fuels, nuclear and other commercial
forms of energy produces an average of 800g of CO
2
per kilowatt hour, virtually no CO
2
is produced
through the use of wind energy.
From an article provided by CleanTechnia, many people have thinks that the concrete required for
the base of constructing a wind turbine emits so much of CO
2
that wind turbines will never be able
to pay back the carbon tech.
A full lifecycle cost analysis of carbon to cradle-to-grave report from CleanTechinca shows that,
the concrete used to build wind farms obeys ISO standards, whereby regardless of its mega size, the
ISO standard will be followed. From the report, it is stated that the amount of concrete used in wind
turbine bases is equivalent to the amount of concrete used to build 6 detached home for foundations.
Modern wind turbines are typically in the 2-3 MW range, with much larger ones offshore and larger
ones often considered for most wind farms. Assuming 2.5 MW average for a modern wind turbine,
this would require about 400 wind turbines to enable a Gigawatt of generation capacity, resulting in
about 2,400 homes equivalent, not 30,000 homes worth, as some have asserted. If you scaled up for
apartments, townhomes and bungalows, you might get to 6,000 homes, but nowhere near 30,000.
So not only do wind turbines not use unusual amounts of concrete, it is included in the apples-to-
apples comparisons that show that with the concrete bases, wind energy is still enormously better
than fossil fuel generation alternatives.
Statistics Finland has provided us statics of carbon dioxide emission for Finland from 1990 up to
2012.
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From the graph above, we are able to see a major decrease of emission of carbon dioxide since
2010. This is because in 2011, a feed-in-tariff was implemented for renewable energy whereby
subsidies will be provided to those who are using renewable energy sources. With the support and
offer from the government, the people of Finland supported the use of renewable energy sources
which greatly decreases the usage of non-renewable fossil fuels. This results in the great decrease of
carbon dioxide emission.
From the report, it was seen that the largest drop of emission of carbon dioxide falls upon the energy
sector, where the decrease of carbon dioxide from the energy section was up to 5.5 million tonnes
which is equivalent to 10% reduction of carbon dioxide emission per year.

How does biofuel energy source benefits Finland
Impact on Finland's economy:
Recent studies have shown that the local economic impacts of corn-based ethanol facilities are
small. This is because the corn they utilise would otherwise be sold to other markets, so the impact
on corn price is modest. Finland are particularly well placed to capture the economic impact of an
emerging biofuels industry for the reason of its "biomass belt" states as plants will undoubtedly be
located near the feedstock sources. The potential economic development contributions of an
emerging biofuels industry are particularly significant because many of the areas where such an
industry could concentrate on the not-distant-past faced adverse economic and demographic trends.
An emerging biofuels industry could offer new jobs that would help to support rural communities in
Finland and farm households and provide the kind of economic stimulus many agriculturally
dependent area have been seeking. Furthermore, the sheer scope of the potential development in
Finland, with capital cost of $34billion and annual regional operational expenditures of over
$10billion suggest that a biofuels industry could change the economic and demographic makeup of
Finland.
Policy makers in Finland have examined the benefits of supplementing a bio fuels subsidy with a
carbon tax. While the carbon tax revenue can be used in part to finance the subsidy, the negative
effects of a carbon tax on food prices and social welfare could also be exacerbated in the presence of
other policies to support biofuels. Additionally, by promoting more biofuel production, the carbon
tax could increase distortionary expenditures by the government on the subsidy.
By developing a framework that assumes that the consumers derive utility from leisure, miles, and
food, and disutility from GHG emissions and miles related externalities such as: congestion,
accidents and air pollution. Miles are produced from fuel which consists of gasoline and biofuel.
Land use as input is limited to the production of biofuels and food while all produced goods use
labour as an input. The government will obtains revenue by taxing labour, emissions and miles. The
policy experiment considered is a revenue neutral increase in the carbon tax rate, with revenues
from the carbon tax used to reduce the labour tax rate.
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We also consider a scenario with a fixed biofuel subsidy and analyze its implications for the optimal
carbon tax and labour tax. In addition, we also examine the effect of a marginal increase in the
subsidy rate, holding revenue fixed but allowing the labour tax to vary. We develop a numerical
general equilibrium model to determine the magnitude of second best optimal carbon tax, as well as
the market and welfare impacts of the carbon tax and biofuel subsidy.
Implementation of biofuels economic polices is complex due to diversity of interests and concerns.
Finland utilizing approaches to economy policy design with the common goals o supporting biofuels
development and economic growth, protecting the environment, and increasing energy security.
Biofuels Impact on carbon dioxide percentage reduction:
As many environment agencies are concern on the potential environmental and social implications,
its continued growth of biofuels must be recognised. For example, reduced greenhouse gas
emissions are among the explicit goals of some policy measures to support biofuels production.
Until recently, many Scientist assumed that the replacement of fossil fuels with bio-fuels would
have positive and significant climate-change effects by generating lower levels of the greenhouse-
gases that contribute to global warming. Bioenergy crops can offset greenhouse-gases emissions by
directly removing carbon dioxide from the air as they grow and storing it in crop biomass and soil.
In addition to biofuels, many of these crops generate co-products such as protein for animal feed,
thus saving energy that would have been used to make feed by others mean.
Some of the side-effects of agricultural biofuels production such as unintended negative impacts on
land, water and biodiversity are of particular concern with respect to biofuels. The extents of such
impacts depend on how biofuels feedstock are produced and processed, the scale of production and,
how they influence land-usage. Scientific studies have revealed that different biofuels vary widely
in their greenhouse gas balance when compared to petrol. Depending much on the ways used to
produce the feedstock and process the fuel, some crops can even generate more greenhouse gases
than do fossil fuels. For example, nitrous oxide is a greenhouse gas which its global warming
potential is 300 times greater than carbon dioxide which is released from nitrogen
fertilisers. Furthermore, at other stage of the production of biofuels, greenhouse gases will release
when producing the fertilisers, pesticides and fuel used in farming, during chemical processing,
transport and distribution.




















21

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