Offshore wind project development

Finland has no "one-stop-shop" permitting for wind farms. Rather, several permits and statements are needed from various state and municipal authorities, and coordination is limited. The permitting process typically takes from five to seven years.

Wind energy development, however, enjoys the procedural privileges and supportive measures for renewable energy plants. This includes time-limits for construction and operation permitting and a recent legislative amendment to temporarily grant procedural priority to green transition projects in authorities and administrative courts.

In addition, targeted measures are being considered for improving market conditions for offshore projects in particular. This includes changes to real estate taxation. Currently, the tax basis for both onshore and offshore wind farms are linked to the construction and turbine procurement costs, resulting in a significantly higher tax burden for offshore farms. Another pressure point is the clarification and streamlining of permitting procedures.

The details of land procurement and permitting depend on whether the project is located within Finland's territorial waters or in the exclusive economic zone:

Finnish territorial waters

The state-owned sea areas closer to the coast are administered and leased out by the state-owned company Metsähallitus. As an example, Metsähallitus leased additional part of territorial waters for the Tahkoluoto wind farm expansion in January 2023. In the future, offshore sites will be allocated to developers via an auction model. Prior to initiating the auctions, Metsähallitus will pre-screen and identify the suitable areas and procure approval from the Government. So far, Metsähallitus has identified seven potential areas. A use right agreement will be granted to a winning developer in the auction after which the developer can proceed to permitting of the project. Ultimately, the developer can construct and operate the project.

The first auction of two offshore sites is expected to begin in 2023 and the next auction with two more sites in 2024. The first auction concerns project Ebba, located in Pyhäjoki and Raahe and project Edith in Närpiö. Both projects consist of 80-100 WTGs with total capacities 1,400 MW for Ebba and 1,600 MW for Edith. In the project areas, the water dept mainly varied between 15 and 40 meters and wind conditions are great. The projects are in land use planning stage and estimated to be in operation by 2035. In addition to third-party projects, Metsähallitus is also developing the first large-scale offshore wind farm with a capacity of at least 1,300 MW near Korsnäs. Metsähallitus has selected Vattenfall as a co-developer in December 2022. The environmental impact assessment has been completed and zoning is currently in progress.

The permitting process includes land use planning with the local municipality, environmental impact assessment with the competent ELY centre and statements and permits from several authorities. The main permits include a permit for seabed survey and mapping, a statement from the Defence Forces, a water permit, building permits and flight obstacle permits. Securing a grid connection is also subject to environmental impact assessment and permitting.

Exclusive economic zone

The Finnish exclusive economic zone (EEZ) covers areas outside territorial waters, for which Finland nevertheless has exclusive rights to conduct commercial activities. In the EEZ, offshore wind farms operate under government-granted construction permits, preceded by research permits for conducting the necessary studies. The permit processes are separate, and a developer holding a research permit does not have priority with regard to the construction permit. No construction permits are in place yet, but research permits for a dozen offshore projects have been granted in 2022-2023.

Projects in the EEZ are not subject to a land use planning process and do not require a municipal building permit nor separate agreements on land use rights. Environmental impact assessments are typically conducted for projects in the EEZ. The projects also require various other permits, such as a water permit, statements from the Defence Forces regarding a permit for seabed investigations and impact on territorial surveillance, and permit for high voltage line construction. Even if the wind farm site itself is located in the EEZ, the cabling and other infrastructure are partly located in territorial waters. Therefore, similar procedures as in territorial areas apply.

As a part of the new government programme, national legislation for offshore wind in the EEZ will be clarified. The purpose is to develop applicable legal framework, permit processes as well as compensation and tax structures. The legislative project of the Ministry of Economic Affairs and Employment of Finland is scheduled to be published in the autumn of 2023 and the legislative proposal for decision-making in late 2024.