COMMENTARY: Vanhanen needlessly blames Finnish households

Industry, not households, account for high per-capita energy consumption

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By Heikki Arola
     
      Prime Minister Matti Vanhanen (Centre) has sharply criticised Finns for their excessive use of electricity and energy. In an interview with Helsingin Sanomat he urged Finns to turn their sights from the price of energy to the amount that is consumed.
      The Prime Minister's comments were rejected from nearly all directions, and with good reason. The basic starting points are based on either inaccurate information, or some murky political designs.
      Vanhanen has studied international statistics and noticed that Finland consumes much energy per capita. Last year each Finn statistically consumed twice as much energy as the average French person.
      This does not mean that Finnish households would use particularly much electricity, because the figure also includes the consumption of industry and other businesses, and the total consumption is divided by the number of residents.
     
The real energy glutton in Finland is heavy industry - especially the forest industry. In recent years it has not managed to raise its efficiency in the use of energy very much, but on the other hand, the forest industry produces byproducts in its processes, which it uses to produce electricity itself.
      One of these is black lye, which is a good raw material, because it is renewable. Without this forest industry by-product, Finland would not rise very high in the EU statistics on renewable energy.
      Nevertheless, the international information is lacking, in that direct comparisons cannot be found for the consumption of electricity and other energy by households. Nevertheless, there is no reason to assume that a Finn would consume much more energy than others on the average.
      Lifestyles in the industrialised countries are so similar that it is safe to assume that consumption is fairly similar all around. While Finland uses more for heating, in warmer countries air conditioning takes much energy.
      In Finland it is customary nowadays to criticise the preponderance of electric and oil heating in small houses. One should keep in mind that while they became common in the 1960s and 1970s, they were subsidised with the help of tax breaks and discounts.
     
These new types of heating helped the country industrialise, as the use of firewood, which is very labour intensive, was reduced. The labour issue could prove to be an impediment to going back to wood heating.
      In cities heating emissions are reduced by the co-generation of electricity and district heat, which is economically feasible only in cold countries.
     
And what about the price paid by households for electricity? Is it cheap in Finland?
      According to EU figures, it is at the cheaper end, but the only reason that the cost is so low is that the state taxes electricity consumption at a low level. The price that energy utilities get for electricity does not significantly differ from the EU average.
      Taxation accounts for 24 per cent of household electricity bills in Finland, which is near the EU average. In Sweden the figure is 37 per cent and in Denmark it is 55 per cent.
      Taxation of electricity consumption by industry has been virtually abolished. The proportion of taxation in the electric bill is four per cent.
      In assessing price levels, production costs of electricity need to be examined. They vary considerably from one country to another.
     
In Finland, Sweden, and Norway, the production of electricity is cheap, because there are many old hydroelectric and nuclear power plants here. In Germany, the production of electricity is expensive, because it is generated in fairly new coal-fired plants, as well as in wind and solar power facilities.
      The figures show that profits earned by electricity production companies are at a completely different level here than in Germany, where they are also criticised as high.
     
Helsingin Sanomat / First published in print 11.10.2007


Previously in HS International Edition:
  Vanhanen: Climate more important than cheap electricity (8.10.2007)

HEIKKI AROLA / Helsingin Sanomat
heikki.arola@hs.fi