Governance of Finnish Energy Policy-Making: From Governmental Control and Regulation to Market-Based Domination?

Project team: Ilkka Ruostetsaari (project manager, University of Tampere), Tapio Litmanen (University of Jyväskylä), Matti Kojo (University of Tampere), Miikka Salo (University of Jyväskylä)

International interest in Finnish energy policy has been very high for a number of reasons. Firstly, the electricity markets were liberalized very rapidly, among the first countries, even before the EU directive came into force. Secondly, even if construction of nuclear power plants had almost ceased abroad, in Finland the construction of a new plant was licensed by Parliament in 2002 after an intensive debate lasting almost two decades. Thirdly, as one of the first countries in the world Finland made a decision in 2001 on the final disposal of nuclear waste. Fourthly, production of renewable energy, especially wind power and bio-energy –which was frequently presented as a counter-balance to nuclear power in energy debate - has remained minor by international comparison. The research project will produce information about legitimacy and acceptability of "big energy decisions" which have been very difficult around the world.

Economic globalization has significantly affected the Finnish energy sector since the early 1990s, reducing the autonomy of domestic actors. Foreign electricity companies have been established in Finland and vice versa. The production and distribution of electricity has been characterized by centralization as well as increased cooperation and concatenation between actors. However, despite liberalization of the markets several structures (e.g. monopoly of electricity transfer, functioning of electricity exchange) still debilitate competition.

Prior to the recent situation the Finnish energy system was characterized by corporatist intermediation and dominated by energy producers, distributors and big buyers. By contrast, civil society remained weak: consumer movements or organizations for supervising the interests of households and private consumers have not materialized. Due to the dominating role of the authorities and the slight interest among the citizens in participation, the role of this mode of intervention has remained rather weak. In short: despite the deregulation and liberalization of the electricity markets, power wielding in the Finnish energy sector seems to have changed little.

The purpose of the project is to analyse the actual power structures and the role of different actors in various phases of decision making processes of Finnish energy policy. The significance of the project is that it will produce information on institutional and structural changes introduced by the political decision-makers and authorities and their actual effects on the action of actors. As we will analyse the effects or lack of effects of these institutional reforms we may depict more generally conclusions about power wielding in Finnish society.

As the above-mentioned important energy decisions mirrored the goals of business and were opposed by several civic associations and movements, the changes taking place in the field of energy policy-making since the late 1980s open a vantage point from which to analyse transformations in Finnish power structures. Since the political parties represented in Parliament were not interested in the liberalization of the electricity markets and disposal of nuclear waste, and resistance to the construction of a new nuclear power plant waned, the general objective of this research project is to analyse whether the power of business over energy policy has increased at the expense of political and administrative actors and civic society. According our approach power is a multi-layered and multi-dimensional concept with several related concepts, which call for further elaboration. However, we share the view that power has several basic features on which we will concentrate in empirical research:

1) power as a capacity of actors,
2) discursive power, and
3) structural power (e.g. networks, institutional/ political arrangements, socio-technological regimes).

Furthermore, as the nuclear power projects was widely supported by the Finnish business sector the adopted perspective may be used for the study not only of energy policy-making but also more generally of the changed influence of business in the Finnish society. In fact, the big recession in the 1990s as well as the widely adopted doctrine of neo-liberalism restructured mental patterns in Finnish society in favour of business. Public debates in many countries, for example the intense debate on nuclear power from the mid-1970s onwards, have shown that experts and researchers can reach diametrically opposing conclusions regarding research-based knowledge and its implications for public policy, which has made it difficult to gain legitimacy for expert-based central planning and reform. As decision-making on Finnish energy policy has traditionally been technocratic, it is now possible to analyse how the role of experts has changed. From a democratic point of view it is important to know whether the views of above mentioned actors, i.e. in a broad sense the elites differ from the people as far as the appropriate content of the energy policy is concerned.

The research project comprises four parts focusing on strategic governmental planning and decision-making on energy policy, decision-making on the constructing of a 5th nuclear power plant and the location of nuclear waste, the long-term struggle between the nuclear industry and local civil society and the struggle for and against utilization of renewable energy. Thus the project forms a solid entity functioning on several levels reaching from global innovations and effects (e.g. deregulation of energy policy and the Kyoto Protocol) to local residents who resist location of a nuclear power plant in their own municipalities.