Insights

28/05/2014

Reserve your spot, now

A recent amendment to the feed-in tariff act (1396/2010) means you can reserve your spot in the feed-in tariff system today – even if your project is not yet ready for final approval.

On 30 April 2014, the Finnish parliament approved the government’s proposal on amending the feed-in tariff act (1396/2010).

The amendment makes it possible to get a binding reservation from the Finnish Energy Authority to the effect that the electric capacity of wind power plants under development have a place reserved within the overall feed-in tariff quota of 2,500 MW already before the final approval application to the feed-in tariff system.

The quota is the aggregate limit for electric capacity of wind power plants that will be accepted into the feed-in tariff system. The decision is binding for a period of two years, and the final application for approval to the feed-in tariff system must be filed within this time period.

The requirements are that the wind power developer has received building permits for the wind turbines and entered into a binding grid connection agreement with a grid operator for connecting the wind turbines to the grid.

Moreover, if the connection agreement is not directly made with Fingrid Oyj, a confirmation from Fingrid Oyj must be obtained that the electricity produced by the wind turbines may be fed to the main grid.

The reservation system took effect starting on 30 June 2014. 

Time priority to change

According to the Feed-in Tariff Act, the basic rule regarding priority of acceptance to the Feed-in Tariff Act is time priority, meaning that the electricity producer who has first submitted its approval application to the feed-in tariff system receives priority over any subsequent applicants.

When the wind power developer is ready to submit the final approval application, there is a risk that the overall feed-in tariff quota of 2,500 MW has already been reached.

In the future, the order of priority is changed to the effect that the Energy Authority must take into account also projects that have reserved a spot in the feed-in tariff system. The order of priority in respect of reservations to the feed-in tariff system is also based on date and time for submitting the reservation application.

Reservation even if final details are unknown

In the reservation application, information must be submitted regarding the electricity producer, the wind turbine type, the nominal power output of the wind turbine type, the investment time table as well as other information that may have an affect on the decision. Further requirements may be given by Finnish government decree.

However, the Energy Authority has confirmed that a decision on, for example, wind-turbine type, does not necessarily have to be final at the time when the reservation application is filed. Wind power producers have an obligation to inform the Energy Authority if the capacity of the wind power plants is reduced after the reservation decision has been granted, so that Energy Authority can free capacity to the feed-in tariff system to others.

However, the reservation decision is not binding to the extent the capacity of the wind power plants is increased afterwards.

Reservation decision process

The Energy Authority grants the reservation if all necessary information has been submitted and there is no obstacle for granting the decision pursuant to the Feed-in Tariff Act; for example, there is still capacity left in the feed-in tariff system and that the wind power plant fulfils all other requirements for being accepted to the feed-in tariff system.

On the other hand, the Energy Authority must deny the reservation application if there is significant insecurities due to the large amount of wind turbines, other reason for doubt that the wind power producer does not fulfil the requirements for being accepted to the feed-in tariff system, or if there is doubt that the wind power producer will make the final approval application in the future.

The Energy Authority must also deny the reservation application to the extent the total capacity of approved wind power projects and reserved capacity to the feed-in tariff system is exceeded.

The reservation decision is in force for two years from the date the decision received legal force. However, the decision will not be valid for longer than until 20 June 2020, meaning that if the reservation decision gained legal force less than two years before such date, the reservation decision is regardless in force only until 20 June 2020.

Transfer of the reservation decision

The reservation decision may be transferred to another wind power producer upon written application to the Energy Authority, in case the ownership of the wind power plant is transferred. However, the reservation may not be transferred from one wind power plant to another.

Cancellation of the reservation decision

The Energy Authority may cancel the reservation decision if false or erroneous information has been submitted to the Energy Authority that would have had an impact on the decision or if a wind power producer neglects to notify the Energy Authority about reduction of the nominal power output of the wind turbines.