Finland sets the stage for offshore wind investment with new tendering and tax rules

A new Act on Offshore Wind Power in the Exclusive Economic Zone entered into force in the beginning of this year. Most prominently, the Act introduced a new tendering system for granting the right to use the offshore wind power areas in the exclusive economic zone of Finland (EEZ). We have discussed the Act in more detail in our previous article.

While the Act established the framework, it left the commercial details and selection criteria to be specified in a governmental Decree. The Ministry of Economic Affairs and Employment has sent out this draft Decree for comments on 23 June 2025.

Aside the tendering process in the EEZ, a taxation reform for offshore wind projects is underway. The Ministry of Finance has launched a public consultation on proposed legislative changes that would extend income and property taxation to offshore wind power operations in the EEZ. At the same time, property taxation for offshore wind power is expected to be lowered significantly.

Clarifications to the selection criteria for developers in the EEZ

Under the draft Decree, the tendering process consists of a single round, and each participant may submit only one bid. To ensure that only capable and experienced developers participate, the model sets strict eligibility criteria:

Financially, participants must either have a balance sheet total of at least 600 million euros with a minimum equity ratio of 15% or manage assets worth at least 1 billion euros.

In terms of experience, participants must have project management experience of at least 100 MW of aggregate WTG capacity in both wind power project development and construction. The experience can consist of one or several projects provided that no more than eight years have passed after obtaining such experience.

The participant in the tender may be an entity, enterprise or a consortium. In the case of consortia, the thresholds are assessed collectively. However, when calculating the balance sheet total, each member included in the calculations must meet the equity ratio criterion. Companies may also rely on the resources of other entities to meet these requirements, as provided in public procurement legislation.

To guarantee commitment and progress, participants must provide financial guarantees. A participation guarantee of 1 million euros is required upfront from all participants. The winner must issue a progression guarantee which must be accumulated annually, starting at 1 million euros. The guarantee grows progressively, reaching 3 million euros in the third year, and continuing in 5 million euros increments thereafter.

The evaluation of bids will be based equally on price and quality, with each component contributing half of the total score. The price component is determined by the annual exploitation fee offered by the bidder, measured in euros per megawatt per year. These fees will be indexed to the cost-of-living index. The exploitation fee becomes payable for each turbine once it has been connected to the grid or consumption point.

The quality component assesses the developer’s experience, the environmental impact of the project, and its flexibility within the electricity system. Developers can earn points for previous experience in both onshore and offshore wind projects, including development, construction, and operation. Additional points are awarded for environmental measures, such as using renewable energy in project-related transport and implementing radar-based bird monitoring systems. Projects that include energy storage or significant electricity consumption at the grid connection point, or that can participate in frequency regulation markets, are also rewarded for their flexibility.

In the event of a tie in total points, the quality score will primarily serve as the deciding factor.

By combining rigorous standards with a transparent and competitive process, the government aims to attract serious investors and developers capable of delivering high-quality, environmentally responsible offshore wind projects. The first tendering process is expected to begin in January 2026.

Confirming taxation in the EEZ and lower property tax for offshore wind

Aside the tendering process, the taxation reform is one of the measures to create a clear framework for offshore wind and attract investments. The proposal is part of the government’s broader effort to align the taxation of offshore wind with that of onshore and territorial waters-based projects.

The proposed legislation renders income generated from activities in the EEZ subject to Finnish income tax, as outlined in the Income Tax Act. The effect remains likely limited in practise since majority of the developers are anticipated to be subsidiaries established in Finland which are generally liable for tax in Finland.

More importantly, the reform would bring buildings and structures located in the EEZ, such as offshore wind turbines, subject to property tax under the Property Tax Act. This would mark the first time that property taxation is applied to infrastructure in the EEZ. The goal is to harmonize the tax treatment of offshore wind farms with that of onshore wind projects, while also easing the tax burden on offshore developments to reflect their higher construction costs.

To achieve this, the taxable value of offshore wind turbines would be set at 35% of their construction costs, a significant reduction from the 75% valuation currently applied to wind power under the Valuation Act. This taxable value would be applied to wind power located both in the EEZ and on territorial waters.

The exact property tax rates are generally determined by municipalities. In the EEZ, which is neither a municipal nor state area, the property tax rate for offshore wind installations would be calculated using a weighted average of municipal tax rates. The average would be based on the most recently confirmed rates and the taxable values of properties within each municipality. As in the existing system, a specific rate would apply to wind turbines and a general rate to other installations.

If approved, the new tax rules would come into force at the beginning of 2026 and be implemented in phases. By clarifying the tax framework and reducing the financial burden on offshore wind developers, the government hopes to attract more investment in offshore wind and accelerate Finland’s transition to a low-carbon energy system.