Offshore wind project development
March 2023

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. 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 or outside Finland's territorial waters:

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, the Government granted permission to lease additional part of territorial waters for the Tahkoluoto wind farm expansion in July 2022. In the future, offshore sites will be allocated to developers via an auction model. The first auction of two offshore sites is expected to begin in 2023 and the next auction with two more sites in 2024. 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.

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 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. Projects in 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.

No construction permits are in place yet, but 2022 witnessed the granting of the first research permits for seven offshore projects. Additional projects are already being planned, and the relevant ministries will assess the needs for developing procedures and legislation.