Finnish Metsähallitus Director General, CEO Juha S. Niemelä sees offshore wind power as the next step in Finnish energy solutions. In an interview with “Uutissuomalainen” he says that Finland will lease offshore areas for 2-4 wind farm projects on the country’s west coast.
Although so far offshore wind energy has not been commercially viable in Finland, profitability is expected to improve in the coming years, thanks in part to technological developments. Operators are therefore increasingly interested in Finnish marine areas, including those managed by Metsähallitus, the state-owned land and water management company.
Metsähallitus is currently working on the Korsnäs offshore wind farm project with a capacity of approximately 1300 MW. The first phase of the project will install 70-100 turbines with a nominal capacity of 12-20 MW. The Korsnäs project will therefore be the first large-scale offshore wind farm in Finland when it is completed around 2028. At this stage, annual energy production is estimated to be around 5,000 GWh. This will help meet the year-round electricity demand of 250,000 single-family homes. The area of the wind farm will be 220 km2. It will be located in a public marine area managed by Metsähallitus, about 15 kilometers off the coast.
Finland’s first offshore wind farm Tahkoluoto in Pori (42 MW) generates about 155 GWh of electricity per year.
Finnish news portal publisher Uutissuomalainen reports that Metsähallitus plans to include 2-4 offshore wind projects in its upcoming auction for offshore wind. They are tentatively the same size as the offshore wind farm to be built at Korsnäs.
The offshore wind power planned for domestic waters could eventually almost double the current total installed capacity of Finnish wind power, which stood at 3,257 MW at the end of 2021, reports Uutissuomalainen.
Juha S. Niemelä, in an interview with Uutissuomalainen, indicates that new offshore wind farms will be pre-qualified and included in auctions in the coming years.
Finnish government approved auction model for offshore leasing
On 8 December 2021, the government’s Ministerial Committee on Economic Policy approved a proposal for an auction model to be used to lease public waters managed by Metsähallitus to companies to develop and build offshore wind projects. The proposal aims to accelerate market-based offshore wind development.
New wind energy projects are also needed to meet Finland’s climate and energy policy goals. Finland’s goal is to become carbon neutral by 2035.
“In the coming decades, we will need much more clean electricity to meet the needs of industry and society as a whole. Therefore, it is extremely important to create a clear and predictable regulatory environment for future investments in offshore wind energy”, emphasized the Minister of Economic Affairs, Mika Lintilä.
The auction model for offshore wnd does not apply to Åland province, nor to offshore wind projects outside territorial waters in Finland’s exclusive economic zone, the release reads. The operating model of the economic zone will be determined at a later stage.
Metsähallitus will conduct a preliminary survey of the water areas and, based on this survey, will select the areas to be auctioned, taking into account the overall public interest. Prior to the start of the auction, the government or a Ministerial Committee on Economic Policy approves the areas to be leased and the terms of the auction. They may also set minimum prices for leasing these areas. The auction does not include the award of financial support to successful bidders.
The role of Metsähallitus is only to facilitate projects. The winner of the auction will be responsible for, among other things, applying for the necessary permits and, once the contracts are signed, they will be able to develop the land in a way that works for them.
These sites will be subject to a fee (lease rent) determined by auction based on the area of the site under development and construction as well as the amount of electricity produced. After the auction, the government will decide on leasing the land.
The auction winner(s) will have exclusive rights to develop the project, apply for the necessary construction permits, build offshore wind farms and generate electricity in the offshore area. Because planning and permitting for offshore wind projects can take up to 5-10 years, it reads.
The first auction is expected to take place in 2023-2024 and will include 3-4 sites suitable for offshore wind.
First permits for offshore survey investors
In January 2022, the Finnish government issued exploration permits for three offshore wind projects in Finland’s exclusive economic zone (EEZ). On January 20, 2022, Wpd Finland was granted a license for the exploration area west of Pietarsaari. OX2 Finland has obtained exploration permits for two projects in the western exploration areas of Hailuoto and Pietarsaari. The survey is scheduled to be conducted in 2022 and 2023.
The government’s decision on the final investor of the offshore wind farm in the study areas will be made at a later stage of the construction permit process, after the completion of the environmental impact assessment (EIA) procedure. These projects will also require a permit under the “Water Law” Act.
The studies required for offshore wind projects prior to construction are costly, amounting to several million euros, and the risk of operators in implementing the project is significant. In the current situation, this risk is exacerbated by the fact that the regulations allow for the granting of a research permit to several operators in the same area, without guaranteeing the operator that conducted the research priority to build the project if the area proves suitable for offshore wind and the project is economically viable, the government website reads.
The Ministry of Labor and Economy, along with other ministries, will assess the need to develop procedures and legislation for the operation of the EEZ for offshore wind energy.
Source: Uutissuomalainen/ Verkkouutiset/valtioneuvosto.fi/