The Finnish wind energy sector
Finland is a leader in supporting the energy transition and renewable energy. The objective is to become carbon neutral by 2035 and to create the first welfare society in the world to entirely renounce fossil fuels. Finland has ideal circumstances for achieving this goal thanks to its innovative and dynamic business environment, cutting-edge technology, and outstanding know-how.
The success story of the wind energy sector is an impressive example. Even though Finnish commercial wind power is only a decade old, it has already surpassed all other forms of electricity generating in terms of cost-effectiveness. Despite the rapid development in recent years, there is still a huge growth potential both onshore and offshore.
The majority of developments are onshore. During 2022, 2,430 MW of new capacity was installed, bringing the total installed capacity up to approximately 5.6 GW.
The west coast of Finland and Lapland are perceived as ideal locations for wind power production. These are also the regions with the highest number of wind energy projects under planning and construction. The future trend is that the project development is expanding also to other areas.
Project size and capacity have increased considerably within recent years. Wind farms with a capacity of 50 MW or more make up roughly 40 percent of all operational projects commissioned in 2019-2022. Out of the projects that came online in 2022, more than a quarter have a capacity of 100 MW or more. The average size of installed turbines in 2022 is around 5.4 MW, and sizes upwards of 6 MW are quite standard for projects under development.
The favourable market conditions have attracted a significant number of foreign developers and investors. International players own approximately half of the capacity currently installed.
Finland's ambitious climate goals together with the geopolitical incentive for energy self-sufficiency are causing wind energy to gain momentum also offshore. Finland’s Climate and Energy Strategy greatly relies on offshore wind to enable the electrification and decarbonisation of industry and transport.
On a strategic level, several potential areas for development have been identified in the Maritime Spatial Plan 2030, which was approved in 2020. Especially the Gulf of Bothnia is seen as having good prerequisites for large-scale offshore wind power construction.
An increasing number of actors are setting their sights on the vast potential of the Finnish territorial sea and the exclusive economic zone. The Finnish project pipeline covers approximately 10,000 MW and 1,000 WTGs worth of offshore wind power.
The state-owned sea areas are administered and leased out by the state-owned company Metsähallitus. In July 2022, the government granted permission to lease state-owned water resources for the Tahkoluoto offshore wind farm expansion, which will significantly enlarge the only existing operational windfarm with sub-sea foundations (from currently 10 to 43 turbines). In addition, Metsähallitus is developing the first large-scale offshore wind farm with a capacity of at least 1,300 MW near Korsnäs. Additional offshore sites will be allocated to developers via an auction model, with the first auctions expected in 2023 and 2024.
Further out in the exclusive economic zone, wind farms operate under government-granted construction permits, preceded by exploration permits for conducting the necessary studies. No construction permits are in place yet, but 2022 witnessed the granting of the first exploration permits for three offshore projects. Additional projects are already being planned, and a procedural reform aimed to improve the regulatory environment and investment certainty is under way.