Sector Outline Finland: Onshore Wind

Finland’s journey in onshore wind energy has been a remarkable success story. In under a decade, wind power has transitioned from a niche technology to the most cost-competitive form of power generation and key driver in the country’s green transition.

While construction activity has slowed down compared to record years 2022 and 2023 – driven by higher capital expenditure and lower electricity prices – the sector still holds substantial growth potential. The development pipeline remains strong, and activity is expected to pick up as offtake is catching up with production. Electricity demand is expected to increase significantly, driven primarily by large-scale data centre investments and emerging Power-to-X projects such as green hydrogen and e-fuels.

The Finnish transmission system operator (TSO) Fingrid estimates that by 2030 the installed wind capacity onshore and offshore will be 16 GW. While the west coast and Lapland remain hotspots, there is a growing trend of moving inland, including the eastern part of the country where significant efforts are being made to coordinate wind farm development with national defence needs.

Project sizes vary considerably from a few turbine projects to large wind farms in the hundreds of MW range. Individual turbines are comparatively big with the average capacity being more than 6 MW for operational projects, and 8 – 10 MW for projects under development.

One business model commonly used by utilities is the so-called “Mankala”-model, where electricity is supplied at cost price to the owners of the project company. Outside of these arrangements, revenues are typically secured by long-term power purchase agreements (PPA) with corporate and industrial offtakers or utilities. The ramp-up in clean hydrogen and Power-to-X projects, as well as data centres, are expected to create a whole new offtaker market over the coming years.

The rapid expansion of variable energy production has brought new dynamics to the market. Phenomena such as cannibalisation and negative pricing have become more common in recent years, reflecting the evolving nature of supply and demand. Electricity prices tend to be lowest during times of high wind generation, which has required adjustments for projects with baseload PPAs - previously a standard in the Nordics. While Finland’s grid remains generally stable, the first instances of local curtailment highlight the importance of proactive planning and flexibility as the system adapts to growth.

As business cases adapt to new market realities, developers are increasingly optimising their portfolio by combining diverse assets and revenue streams. The trend is towards hybrid projects that combine wind power with PV, energy storage and/or hydrogen production. Efforts to address the mismatch of production and pricing on both system and project levels have created fertile ground for co-located and standalone battery energy storage systems (BESS). Moving forward, wind and green hydrogen are expected to grow in tandem, creating a mutually reinforcing cycle that accelerates expansion across both sectors.