Finland was a bright spot for wind investment in Europe in 2022 and it is poised to accelerate in offshore wind with 6GW of tenders in 2023 and 2024.
“Nobody in their right mind would come to Helsinki in November. Except you, you badass. Welcome.”
It is with these words that visitors to the airport in Finnish capital city Helsinki were greeted by a poster that went viral in 2016. This made a virtue of the tough conditions in Finland in winter: dark, wet and with temperatures that linger around freezing.
However, in the onshore wind sector, investors are finding Finland increasingly welcoming. The Nordic nation was one of Europe’s bright spots for onshore wind in 2022, as developers completed the same amount of capacity in the country as either Germany or Sweden (2.4GW); and Finland accounted for 13% of total wind installations in Europe last year, according to WindEurope. That is a Finnish record and three times higher than the 671MW of onshore wind completed in the country in 2021.
That 2.4GW looks all the more impressive when you consider Finland does not have a huge wind market: the country had 5.7GW of installed wind farms at the end of last year, which is split between 5.6GW on land and 71MW at sea. Its success is due to windy conditions, the user of power purchase agreements, and political support.
The country is not predicted to keep growing at 2.4GW annually. WindEurope predicts an average of 956MW will be added each year between 2023 and 2027. Even so, Finland is performing well amid sluggish growth elsewhere in Europe, and is poised to unlock the potential of utility-scale offshore wind in its waters.
Changes in the political landscape can derail renewables, but that isn’t likely to be the case here.
Pro-renewables leader Sanna Marin and her Social Democratic Party narrowly lost the country’s election last week, and she has been replaced as prime minister by Petteri Orpo of the National Coalition Party. He is now in negotiations to form a ruling coalition but, so far, energy policy has not featured heavily in the discussions.
This gives us confidence that the goal Finland set in late 2022, that at least 51% of the country’s final energy consumption should come from renewables by 2030, is set to be retained. The country has also been aiming to achieve net-zero emissions by 2035. The NCP’s manifesto commits to ongoing support for wind, solar and nuclear.
State land administrator Metsähallitus also last week published plans to accelerate growth in Finland’s fledgling offshore wind sector. The organisation is planning to hold tenders for five sites with the potential for up to 6GW of offshore wind capacity by the end of 2024.
We have seen plenty of activity in recent months. In December, Vattenfall won the right to develop the 1.3GW Korsnäs offshore wind farm in the country’s first utility-scale offshore wind tender; in January, developers Eolus and Simply Blue started environmental assessments for their 3.5GW pair of projects Tuulia and Wellamo; and OX2 is working up plans for the 1.4GW Tyrsky project in the Gulf of Bothnia. This shows that investor interest is strong.
This will pick up later this year as a result of the Metsähallitus plan.
Metsähallitus has said it will hold tenders for two projects this September and October; two more tenders in 2024; and is poised to make a decision on when to hold a tender for a fifth project soon. The five areas covered in this 6GW tender drive are Siikajoki, Hailuoto, and Pyhäjoki and Raahe (areas 1, 2 and 3, see below), Närpiö (area 6) and Kristiinankaupunki (area 7). These five sites have all been identified as suitable for offshore wind, and have received consent from the Finnish Defence Forces.
These tenders will further establish Finland as an offshore wind market that utilities and developers cannot afford to ignore, and we would expect major interest in each of these tenders. In addition, Metsähallitus has identified two offshore wind areas (areas 4 and 5) off the west coast, but said that further site surveys are needed before it can make final decisions on how to develop them.
This will help to establish wind as a bigger part of the Finnish energy mix, although its onshore growth in 2022 provided a significant growth.
Last year, 14% of electricity consumed in the Nordic country came from wind farm, which elevated Finland into the top ten countries in Europe by the percentage of wind in their energy mix. The figure is 16% across the European Union and 17% if you include the UK. The Finnish Wind Energy Association has also said that Finland is poised to double that percentage to 28% by 2028.
Investors in Finland are not worry-free. The FWEA said companies are concerned about how fast they can secure permits, which is a common refrain for developers but nevertheless crucial. The fact Finland joined NATO on 4th April may also stoke tensions with neighbouring Russia, but the proportion of renewables in the Finnish energy mix should ensure the energy security of the Nordic nation.
But based on its performance in 2022 and the upcoming 6GW of offshore tenders, the country is doing a lot right for investors, however badass they might be.
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