# Unit price of energy in residential heating in Finland

## Question

What is the current and future price of energy used for household heating in Finland?

## Rationale

Statistics Finland energy price statistics[1]:

• Average annual consumer price of energy in residential heating, c/KWh. Calculated based on the Statistics Finland data. Prices include value added tax.
 Year Light oil Pellet Wood chip Electricity District heat 2000 4.51 0.94 6.34 3.84 2001 4.01 1.00 6.45 4.08 2002 3.77 1.11 6.79 4.24 2003 3.98 1.21 7.67 4.39 2004 4.41 1.19 7.73 4.45 2005 6.07 1.29 7.62 4.66 2006 6.33 1.41 8.12 4.96 2007 6.53 1.57 8.47 5.17 2008 8.30 4.70 1.73 9.64 5.54 2009 5.96 5.11 2.17 10.25 6.21 2010 7.75 5.22 2.24 10.82 6.29 2011 10.56 5.29 2.29 12.72

Notes:

• Annual averages have been calculated from the monthly observations in the Statistics Finland database. The number of monthly observations differ for different energy sources and years.
• Electricity: price is for a consumer type "detached house, direct electric heating, 18 000 kWh/a (whereof 8 000 kWh by night), 3 x 25 A ". Price includes the distribution of electricity.
• District heat: price is for a consumer type "detached house". Price represents the overall price, including the energy charge, basic charge and other possible charges.
• Value added tax is before 1.7.2010 22% and after 1.7.2010 23%.

More detailed statistics from Statistics Finland:

District heating

• Price of district heating by type of consumer1), €/MWh
 Date Type of Consumer Detached house Semidetached house Apartment building, small Apartment building Apartment building, large 1.1.1996 35.37 32.31 31.89 30.80 28.19 1.7.1996 35.55 32.71 31.96 31.13 28.49 1.1.1997 36.41 33.62 32.88 31.99 29.42 1.7.1997 36.55 33.82 32.83 32.09 29.60 1.1.1998 37.30 34.63 33.62 32.71 30.22 1.7.1998 37.35 34.38 33.50 33.07 30.17 1.1.1999 37.83 34.81 34.21 32.91 30.59 1.7.1999 37.94 34.95 34.34 32.98 30.53 1.1.2000 38.18 35.55 35.08 33.76 30.95 1.7.2000 38.62 36.35 35.89 34.55 31.55 1.1.2001 40.42 38.60 38.08 36.77 33.49 1.7.2001 41.17 39.39 38.35 37.24 34.09 1.1.2002 42.11 40.09 39.30 37.73 34.66 1.7.2002 42.60 40.54 39.63 38.11 35.20 1.1.2003 43.75 40.94 40.11 38.64 35.33 1.7.2003 43.97 41.05 40.20 38.62 35.52 1.1.2004 44.68 41.27 40.49 38.22 35.59 1.7.2004 44.50 41.93 41.03 38.85 36.25 1.1.2005 46.59 43.11 42.29 40.34 37.99 1.7.2005 46.67 43.40 42.66 40.68 38.18 1.1.2006 49.33 46.35 45.52 43.11 40.51 1.7.2006 49.93 47.42 46.49 44.20 41.56 1.1.2007 51.59 48.08 47.43 45.11 42.49 1.7.2007 51.92 48.95 47.71 45.44 42.76 1.1.2008 54.89 52.02 50.68 48.40 45.51 1.7.2008 55.92 53.45 52.01 49.85 47.22 1.1.2009 61.91 58.96 57.87 55.76 53.22 1.7.2009 69.25 63.45 62.68 60.77 58.47 1.1.2010 71.62 65.72 64.96 62.87 60.28

1) The above price data represents overall prices, including the various charges collected ('energy' charge, 'basic' charge, value added tax 22% etc.). The prices are averages for each type of consumer, weighted by the number of consumers served by the plants members of the Association of Finnish Energy Industries / District Heating.

• Type of consumer. Source: Finnish Energy Industries
 Type of consumer Building volume, m3 Energy consumption, MWh/a Detached house 500 20 Semidetached house 2 000 100 Apartment building, small 5 000 225 Apartment building 10 000 450 Apartment building, big 25 000 1 125

Electricity

• Price of electricity by type of consumer1), c/kWh. Prices include electrical energy, the distribution of electricity, and taxes.
 Date Household without electric heating Household with electric Heating Apartment building Detached House Farm Direct electric heating Partly accumulating electric heating 1.4.1999 9.67 8.59 8.09 6.49 5.57 1.7.1999 9.57 8.58 8.04 6.44 5.52 1.9.1999 9.52 8.53 7.99 6.42 5.50 1.11.1999 9.50 8.51 7.97 6.41 5.48 1.1.2000 9.47 8.48 7.93 6.37 5.47 1.4.2000 9.45 8.46 7.90 6.35 5.45 1.7.2000 9.44 8.44 7.83 6.33 5.44 1.9.2000 9.44 8.41 7.79 6.31 5.43 1.11.2000 9.47 8.41 7.79 6.30 5.41 1.1.2001 9.48 8.42 7.78 6.30 5.42 1.4.2001 9.50 8.43 7.77 6.31 5.43 1.7.2001 9.77 8.64 7.97 6.44 5.57 1.9.2001 9.92 8.75 8.10 6.58 5.73 1.11.2001 10.04 8.84 8.18 6.66 5.81 1.1.2002 10.11 8.90 8.25 6.75 5.92 1.4.2002 10.14 8.92 8.26 6.77 5.94 1.7.2002 10.18 8.94 8.29 6.78 5.96 1.9.2002 10.34 9.05 8.38 6.80 5.98 1.11.2002 10.39 9.08 8.41 6.82 6.01 1.1.2003 10.77 9.38 8.65 7.08 6.25 1.4.2003 11.60 9.98 9.23 7.75 6.89 1.7.2003 11.63 9.96 9.28 7.79 6.94 1.9.2003 11.66 9.99 9.30 7.80 6.95 1.11.2003 11.71 10.05 9.36 7.83 6.98 1.1.2004 11.77 10.10 9.43 7.88 7.05 1.4.2004 11.60 9.90 9.28 7.73 6.94 1.7.2004 11.56 9.85 9.25 7.69 6.90 1.9.2004 11.56 9.85 9.24 7.68 6.90 1.11.2004 11.54 9.82 9.22 7.65 6.87 1.1.2005 11.52 9.81 9.22 7.66 6.89 1.4.2005 11.37 9.69 9.12 7.57 6.84 1.7.2005 11.28 9.63 9.08 7.52 6.80 1.9.2005 11.44 9.74 9.18 7.66 6.94 1.11.2005 11.57 9.83 9.26 7.74 7.01 1.1.2006 11.76 9.97 9.40 7.90 7.18 1.4.2006 11.79 10.01 9.44 7.97 7.24 1.7.2006 12.00 10.17 9.59 8.13 7.41 1.9.2006 12.25 10.42 9.82 8.31 7.55 1.11.2006 12.31 10.47 9.88 8.36 7.59 1.1.2007 12.53 10.69 10.10 8.56 7.78 1.4.2007 12.45 10.59 9.99 8.47 7.72 1.7.2007 12.35 10.51 9.92 8.38 7.64 1.9.2007 12.40 10.57 9.98 8.45 7.71 1.11.2007 12.56 10.72 10.11 8.49 7.75 1.1.2008 13.16 11.29 10.64 9.10 8.35 1.4.2008 13.30 11.56 10.94 9.41 8.68 1.7.2008 13.67 11.78 11.15 9.58 8.86 1.9.2008 13.96 12.05 11.41 9.91 9.19 1.11.2008 14.21 12.29 11.64 10.15 9.45 1.1.2009 14.61 12.45 11.77 10.25 9.52 1.4.2009 14.91 12.51 11.82 10.30 9.56 1.7.2009 15.04 12.59 11.91 10.25 9.49 1.9.2009 14.86 12.43 11.74 10.12 9.36 1.11.2009 14.65 12.60 11.92 10.33 9.60

1) The prices are tax-inclusive averages weighted by the sales volumes of liable electricity retailers. On 1 January 1997, taxes on the energy sources of electricity generation were abandoned, while taxes and a precautionary stock fee on electricity consumption were taken into use.

Types of consumer (Source: Energy Market Authority (Electricity Market Authority)):

• Apartment building flat, consumption 2 000 kWh/a, fuse 1 x 25 A
• Detached house, no electric (primary) heating, 5 000 kWh/a, 3 x 25 A
• Agriculture 10 000 kWh/a, 3 x 35 A
• Detached house, direct electric heating, 18 000 kWh/a (whereof 8 000 kWh by night), 3 x 25 A
• Detached house, partly accumulating electric heating, 20 000 kWh/a (whereof 14 400 kWh by night), 3 x 25 A

Domestic fuels

• Consumer prices of hard coal, natural gas and domestic fuels in heat Production. Value added tax not included.
 Hard coal1) Natural gas2) Milled peat3) Sod peat3) Fuel chips4) Forest chips5) Wood pellet6) Month On the Coast Quarter Delivered At Production Site Delivered Delivered Delivered Consumer price (incl. VAT) Index €/t €/MWh €/1000 m3 (0° C) €/MWh €/MWh €/MWh €/MWh €/MWh €/MWh c/kWh 2005=100 9/1999 70.66 9.97 118.57 11.85 Q3/1999 8.98 6.92 8.96 7.57 12/1999 73.05 10.30 124.29 12.44 Q4/1999 8.93 6.98 9.05 7.74 3/2000 73.66 10.39 128.50 12.85 Q1/2000 8.88 7.07 9.12 7.74 6/2000 76.33 10.77 127.82 12.78 Q2/2000 8.87 6.97 9.08 7.74 9/2000 79.18 11.17 133.04 13.31 Q3/2000 8.93 6.99 9.18 7.74 12/2000 84.31 11.89 163.82 16.38 Q4/2000 9.01 7.09 9.28 7.74 3/2001 83.08 11.72 163.98 16.39 Q1/2001 9.13 7.16 9.44 8.07 6/2001 91.72 12.94 158.10 15.82 Q2/2001 9.21 7.27 9.54 8.20 9/2001 88.27 12.45 158.26 15.82 Q3/2001 9.21 7.27 8.97 8.13 12/2001 87.61 12.36 156.75 15.68 Q4/2001 9.16 7.44 9.32 8.40 3/2002 89.01 12.55 149.79 14.98 Q1/2002 9.17 7.52 9.41 9.00 6/2002 81.98 11.56 151.85 15.19 Q2/2002 9.19 7.52 9.46 9.08 9/2002 78.78 11.11 154.66 15.47 Q3/2002 9.05 7.57 9.11 9.01 12/2002 79.91 11.27 156.74 15.67 Q4/2002 9.17 7.62 9.57 9.37 3/2003 81.42 11.48 162.54 16.25 Q1/2003 9.28 7.73 9.73 9.85 6/2003 78.13 11.02 160.84 16.08 Q2/2003 9.27 7.73 9.75 9.95 9/2003 81.37 11.48 157.64 15.76 Q3/2003 9.49 8.03 10.08 10.12 12/2003 82.04 11.57 156.44 15.64 Q4/2003 9.35 8.01 9.97 9.82 3/2004 84.88 11.97 151.64 15.16 Q1/2004 9.37 8.04 10.05 9.73 6/2004 94.93 13.39 152.84 15.28 Q2/2004 9.37 8.05 10.00 9.63 9/2004 95.98 13.54 158.04 15.80 Q3/2004 9.65 8.50 10.63 9.63 12/2004 94.98 13.40 160.84 16.08 Q4/2004 9.70 8.60 10.93 10.19 3/2005 97.72 13.78 162.24 16.22 Q1/2005 9.78 8.69 11.24 10.64 6/2005 94.33 13.30 169.64 16.96 Q2/2005 9.81 8.68 11.23 10.62 9/2005 94.63 13.35 181.64 18.16 Q3/2005 8.15 7.05 9.57 10.56 12/2005 95.77 13.51 194.14 19.41 Q4/2005 8.05 7.22 10.21 10.51 3/2006 95.25 13.43 226.94 22.69 Q1/2006 8.13 7.36 10.59 11.41 6/2006 93.65 13.21 227.84 22.78 Q2/2006 8.13 7.48 10.95 11.50 9/2006 98.80 13.94 226.94 22.69 Q3/2006 8.24 7.49 10.96 11.53 12/2006 101.34 14.29 228.84 22.88 Q4/2006 8.13 7.46 10.85 11.82 3/2007 97.92 13.81 216.54 21.65 Q1/2007 8.26 7.79 11.54 12.22 12.66 6/2007 96.81 13.65 218.54 21.85 Q2/2007 8.30 7.82 11.61 12.32 12.81 9/2007 98.90 13.95 226.44 22.64 Q3/2007 8.53 7.92 11.71 12.43 12.79 12/2007 109.76 15.48 243.04 24.30 Q4/2007 8.52 7.95 11.76 .. 13.21 3/2008 128.52 18.13 264.80 26.48 Q1/2008 8.47 8.72 12.58 .. 13.41 6/2008 139.48 19.67 284.40 28.44 Q2/2008 8.47 8.72 12.58 .. 13.94 9/2008 152.95 21.57 318.40 31.84 Q3/2008 10.92 8.72 13.30 .. 14.05 12/2008 163.64 23.11 319.60 31.96 Q4/2008 10.94 .. 13.34 .. 15.16 4.81 151.6 3/2009 126.21 17.83 281.50 28.15 Q1/2009 11.08 .. 13.02 .. 16.78 4.89 154.1 6/2009 110.96 15.67 253.60 25.36 Q2/2009 10.80 .. 14.52 .. 17.53 5.25 166.0 9/2009 106.10 14.99 267.10 26.71 Q3/2009 10.16 .. 13.11 18.73 5,20 ** 164,5 ** 12/2009 103.63 14.64 280.40 28.04 Q4/2009 10.16 .. 13.11 17.96 5.32 168.5

1) Hard coal: the price is based on the average import price (customs tariff CN 2701 12 90) plus taxes and charges as well as handling and transportation costs. Price on the coast: unloaded on wharf at customer's own harbour. Thermal value: 7,08 MWh/t.

2) Natural gas: until 12/2000, average contract price. Since 3/2001, type of consumer T8, see table 7. The prices include an excise tax and a precautionary stock fee.Thermal value: 10,0 MWh/1000 m3.

3) Peat: The prices are averages weighted by the deliveries of certain member companies of the Confederation of Peat Industries and, therefore, vary according to consumer dependingon the transportation distance and/or contract terms. The price of delivered peat includes a transportation distance of 100 km for milled peat and 50 km for sod peat. Until the second quarter of 2005 the prices include an excise tax, which applies to plants with an annual minimum peat consumption of 25 GWh. Thermal values: milled peat 0,9 MWh/m3, sod peat 1,4 MWh/m3.The price of delivered sod peat in the second quarter of 2008 is an estimate as there was not a sufficient number of deliveries.

4) Fuel chips: Sample includes both forest residue chips and industrial wood residue chips. Delivered, transportation distance not specified. The prices are not valid for the whole country.

5) Forest Chips: Enquiry definitions: Delivered, transportation distance 50 kilometres. Crushed stumps not included.Chipped/crushed product, sold on real markets (shipments within a corporate group not included). Nevertheless, includes small amounts of crushed stumps and unchipped shipments.

6) Wood pellet for households, I-class, 6-8 mm, batch size 5 tons.

Source:Foreign Trade Statistics, Gasum Oy, Association of Finnish Peat Industries, Statistics Finland/ Environment and Energy

Liquid fuels

• Consumer prices of liquid fuels. Includes value added tax.1)
 Month Motor gasoline Diesel fuel Light fuel oil Heavy fuel oil c/l c/l c/l €/MWh c/kg €/MWh 3/1998 95.0 65.9 26.9 27.0 18.0 15.8 6/1998 95.2 63.1 25.2 25.3 18.0 15.8 9/1998 94.9 62.9 25.9 26.0 18.1 15.8 12/1998 86.8 62.9 22.9 23.0 16.8 14.8 3/1999 92.2 63.1 25.9 26.0 17.7 15.5 6/1999 99.6 65.3 26.6 26.7 20.2 17.7 9/1999 104.9 70.8 32.1 32.3 24.8 21.7 12/1999 108.3 78.9 35.8 36.0 25.8 22.5 3/2000 114.0 83.1 38.7 38.9 30.4 26.6 6/2000 123.6 82.7 39.4 39.5 31.2 27.2 9/2000 117.4 91.7 54.2 54.4 34.3 30.1 12/2000 104.9 89.8 47.3 47.5 32.6 28.6 3/2001 111.2 82.2 40.4 40.6 27.9 24.4 6/2001 117.6 82.4 44.1 44.3 28.5 24.9 9/2001 112.5 82.4 42.9 43.1 28.6 25.1 12/2001 98.4 77.7 32.3 32.4 24.9 21.8 3/2002 103.3 77.9 37.3 37.5 27.3 23.9 6/2002 107.4 77.3 34.8 34.9 27.8 24.3 9/2002 111.2 79.6 39.2 39.4 30.8 27.0 12/2002 103.6 79.2 38.8 39.0 29.1 25.5 3/2003 114.0 95.0 49.1 49.3 33.1 29.0 6/2003 110.4 75.5 36.1 36.3 27.4 24.0 9/2003 109.2 78.0 36.1 36.3 28.6 25.0 12/2003 103.8 77.6 37.0 37.2 26.6 23.3 3/2004 110.6 79.9 39.5 39.4 27.1 23.7 6/2004 113.6 79.8 42.7 42.6 29.9 26.2 9/2004 116.5 88.0 48.3 48.2 29.3 25.7 12/2004 111.2 91.1 44.9 44.8 28.0 24.5 3/2005 112.7 93.4 54.3 54.2 33.7 29.6 6/2005 120.6 97.0 60.7 60.6 38.3 33.6 9/2005 135.1 104.4 66.0 65.8 45.5 39.8 12/2005 123.0 100.9 60.7 60.6 43.4 38.0 3/2006 124.4 101.8 63.7 63.6 45.4 39.8 6/2006 133.3 103.1 67.8 67.6 44.2 38.7 9/2006 126.3 101.6 62.3 62.2 40.5 35.5 12/2006 121.4 100.1 58.3 58.2 37.6 33.0 3/2007 126.4 98.8 58.1 58.0 38.1 33.3 6/2007 135.4 99.6 62.5 62.4 43.7 38.2 9/2007 131.4 101.7 67.1 66.9 45.4 39.8 12/2007 132.5 113.1 72.2 72.0 53.1 46.5 3/2008 141.9 125.7 84.4 84.2 53.9 47.2 6/2008 157.4 143.9 102.5 102.3 65.2 57.2 9/2008 149.9 133.1 88.7 88.5 61.8 54.1 12/2008 114.4 101.1 55.1 55.0 37.4 32.8 3/2009 119.6 93.1 52.2 52.1 36.1 31.7 6/2009 137.4 101.5 62.9 62.8 48.4 42.4 9/2009 131.9 99.8 61.3 61.2 50.3 44.1 12/2009 132.2 102.8 63.0 62.9 51.5 45.1

1) Motor gasoline, diesel oil and light fuel oil: weighted average of the prices on the 15th of the month in six localities (Helsinki, Mikkeli, Oulu, Rovaniemi, Seinäjoki and Turku).Heavy fuel oil: national monthly average. Source: Finnish Oil and Gas Federation

Pesola et al. 2011[2]

• Development of the consumer price of electricity and district heat in Finland in two opposite energy production scenarios (€/MWh). Both scenarios result in a substantial decrease in greenhouse gas emission, but the reductions are achieved through different measures. Prices represent total energy cost to consumers and include taxes. Figures have been estimated from a graph.
 €/MWh 2010 2020 2030 2040 2050 Electricity Energy scenario 1 100 122 138 145 175 Energy scenario 2 100 125 160 160 165 District heat Energy scenario 1 50 93 128 155 195 Energy scenario 2 50 73 90 100 105

Notes:

• The impact of energy scenarios on energy price is based on estimated development of energy production costs. Production costs are affected by the required energy infrastructure investments in the two scenarios as well as the assumed future increase in the costs of fuels and carbon emission permits.
• Assumptions in energy scenario 1:
• Emission reductions are achieved via increased use of renewable energy sources and improved energy efficiency.
• Energy efficiency of buildings improves rapidly. In average, the whole building stock is of low energy level by 2050.
• The importance of district heating decreases and is replaced by different types of heat pumps.
• Total electricity demand decreases by 15% between 2010 and 2050.
• The share of renewable energy sources in electricity and district heat production increases rapidly, and is 100% by 2050.
• In scenario 1, carbon emissions from energy production are reduced from approx. 235 kgCO2/MWh in 2010 to 55 kgCO2/MWh in 2030 and 0 kgCO2/MWh in 2050.
• Assumptions in energy scenario 2:
• Energy emission reduction are achieved through greenhouse gas emission neutral energy sources.
• Energy efficiency of buildings increases slowly.
• Distict heat remains an important source of heat in housing.
• Total electricity demand increases by 75% between 2010 and 2050.
• The share of renewable energy sources in electricity and district heat production increases slowly. From 30% to 40% between 2010-2050 in electricity production and 25% to 40% in district heat production.
• In scenario 1, carbon emissions from energy production are reduced from approx. 235 kgCO2/MWh in 2010 to 145 kgCO2/MWh in 2030 and 50 kgCO2/MWh in 2050.

DECC 2011[3]

• Fossil fuel price scenarios from 2011 to 2030 developed to be used within the DECC (Department of Energy & Climate Change) and across Whitehall in the analysis and appraisal of energy related policies in UK. All prices are expressed in real 2011 prices.
 2010 2011 2015 2020 2025 2030 Oil (\$/bbl 2011 real) Low 82 110 101.5 91.7 83 75 Central 82 110 113.9 119.1 124.4 130 High 82 110 120.6 135.2 151.6 170 Gas (p/therm 2011 real) Low 44 63 33 36 41 45 Central 44 63 81 70 70 70 High 44 63 85 95 100 100 Coal (\$/tonne 2011 real) Low 93 130 106 80 80 80 Central 93 130 121 110 110 110 High 93 130 146 152 155 155