Flexibility policy · Finland and Sweden

Same hardware, different tax

Two neighbouring district-heating systems with comparable infrastructure and comparable access to cheap surplus wind. One moved electric boilers into its lower electricity-tax band in July 2022. The other did not. The capital exists on both sides, so what separates them is the price floor rather than the fleet.

The floor · electricity tax on district-heat boilers

0 10 20 30 40 euros per MWh of electricity consumed Sweden, today €39 43.9 öre/kWh Finland, before Jul 2022 €22.50 Finland, since Jul 2022 €0.63 Sweden, industry proposal €0.54 0.6 öre/kWh €10.3 effective floor once the heating-season transmission fee is added

The fleet · and whether it runs

0 0.5 1 1.5 2 gigawatts of installed electric-boiler capacity Finland runs ~2 GW 2,580 GWh delivered in 2025, about 8% of district heat Sweden idle ~1.24 GW largely unused; a further 1.23 GW of heat pumps sits alongside it

Why this identifies the effect

Sweden's 1.24 GW is not a counterfactual, it is idle hardware. Because the capital is already built on both sides, the usual objection that Finland's result reflects investment appetite or capital cost rather than tax does not apply. What differs is the marginal cost of running the boilers for one more hour.

The floor is tax plus tariff

Cutting the tax does not take the floor to zero. Finland's remaining charge is the heating-season transmission fee of about €9.7/MWh, so the effective floor is near €10.3 rather than €0.63. That is still low enough to beat fuel-fired heat across far more hours than before, which is the point: the gain on the loop is set by tax and tariff together.

Sweden's own proposal

Energiföretagen has asked for a temporary cut to 0.6 öre/kWh, which is Finland's rate to within a rounding error, and estimates it would release about 1.6 GW of existing flexibility into hours of low or negative prices. A parliamentary question on the reduction is live, so this is pending policy rather than a thought experiment.

Read with care

The Finnish capacity figure is cumulative to 2025 while the output is the 2025 flow, so dividing them understates the running fleet's load factor. The claim that Sweden's boilers run below a 5% load factor comes from Ilkka Hannula rather than from Energiföretagen, which describes the fleet as barely used without publishing a utilisation figure. Currency conversions from öre are approximate.

Finnish output, capacity and tax rates: Finnish Energy district heating statistics and The impact of electric boilers to the Finnish energy system; tax instrument via COM(2022)219. Swedish capacity, tax rate and the 1.6 GW estimate: Energiföretagen and Energi.se; pending measure at Sveriges riksdag. Series framing and the Swedish load-factor figure from Ilkka Hannula.