The Finnish government has issued a negative decision on 16 applications for exploitation rights concerning offshore wind power in the exclusive economic zone.
Many of the areas located in the Gulf of Bothnia overlap each other, the country’s Ministry of Economic Affairs and Employment said.
The decision does not prohibit the development of offshore wind projects in the sea areas concerned, it added.
The government’s justification for refusing the applications for exploitation rights include its objective to “create a predictable, clear and fair investment environment, the consideration of the overall interests of society, and the negative consequences that granting exploitation rights would have on the guiding effects of the new act under preparation”.
The Ministry said in a statement: “The aim is that the decisions on offshore wind projects in Finland’s exclusive economic zone are based on clear rules.
“These rules will be defined in the legislative project on the exclusive economic zone currently under preparation.
“The government’s goal is that the first areas for wind power projects in the exclusive economic zone could be selected and the first tendering processes launched already at the end of next year on the basis of clear rules in accordance with the new act.”
The applicants that received a negative decision are Halla Offshore Wind Oy and Laine Offshore Wind Oy (subsidiaries of OX2 Finland Oy); Navakka Offshore Ab and Wellamo Offshore Ab (subsidiaries of Eolus Offshore Ab); Skyborn Renewables Offshore Finland Oy; Ilmatar Vågskär Ab, Ilmatar Bothnia & Bothnia West Ab and Ilmatar Offshore Ab (subsidiaries of Ilmatar Energy Oy); Suomen Hyötytuuli Oy; and Pohjan Puhuri Oy and Pohjan Viima Oy (owned by a fund managed by Copenhagen Infrastructure Partners P/S).
The companies had applied for exclusive exploitation rights to use an area for offshore wind power for 40–70 years, according to the Ministry.
The projects, for which the exclusive rights were applied, are at different stages of development, it added.
Some schemes have pending applications for a research permit that enables the applicant to begin research, while for others an environmental impact assessment is already well under way.
The Ministry added: “The applications for exploitation rights have been submitted under section 6 of the Act on the Exclusive Economic Zone of Finland.
“Based on that, only consents to explore the project area have been granted to offshore wind power projects so far.
“In addition, an offshore wind project requires a consent for the actual construction work referred to in section 7.
“The applied rights of exploitation would be between these stages and, in accordance with the application, would guarantee an exclusive right to offshore wind power use in a certain area for a fixed period.”
The current Act on the Exclusive Economic Zone does not take into account the special characteristics of offshore wind power, such as situations where several companies are interested in the same sea area.
Based on the wording of the Act, the government has considerable discretion on the exploitation rights contained in the legislation.
It does not lay down conditions under which a right of exploitation must be granted or an application should be rejected. Broad discretion enables Helsinki to consider different aspects in its decision-making.
The rules for offshore wind power will be clarified by implementing a legislative project under the leadership of the Ministry of Economic Affairs and Employment.
In accordance with the programme of Prime Minister Orpo’s government, the objective is to ambitiously promote the construction of offshore wind power in the Baltic Sea and to create a competitive advantage for Finland as regards the location of offshore wind power, the Ministry said.
The ongoing legislative project will define the legislation, permit processes, compensation and tax matters concerning waters belonging to the country’s exclusive economic zone without delay, and these rules will be coordinated with the rules for projects carried out in territorial waters and land areas, it added.
In addition, according to the Ministry, the legislative reform is essential from the perspective of legal certainty of companies with exploitation rights for wind power.
The most important issues to be solved in the legislative project are the determination of exclusive rights through competitive tendering, the necessary permits that will replace the consents under the current Act on the Exclusive Economic Zone, and the specification of the legislation applicable in the exclusive economic zone, it said.
The competitive tendering would be organised by the Energy Authority.
The government aims to send the legislative draft out for comments towards the end of May.
The Ministry of Economic Affairs and Employment will also organise an online stakeholder event on the legislative project as a Teams meeting (In Finnish) on 23 May 2024.
The Finnish Wind Association said, in order to support the development of offshore wind power in Finland, the government needs “straightforward decisions that clarify the prerequisites for investments in our country”.
It said the country’s offshore wind power has a significant clean electricity production potential and an essential role in repatriating large industrial investments, such as hydrogen projects, to Finland.
For this reason, it is now important for the Helsinki to make decisions that create an outlook for the economic zone and an investment environment that guarantees good conditions for the development of offshore wind power projects in the future, the association argued.
Director of advocacy of the Finnish Wind Association Matias Ollila said: “Project operators developing offshore wind power have used a lot of resources to develop the projects in question.
“At this point, expectations are growing high for the new economic zone offshore wind power law and the economic zone’s future tenders.
“The decision seen now practically means a slowdown in the development of projects.
“It is particularly important to take care of the conditions for the development of domestic offshore wind power.
“One way is to continue the development of the property tax model for offshore wind power, which was left unfinished during the last government term.
“At the moment, it seems that the reform of offshore wind property taxation is stalling again, now as part of the stalled progress of the overall reform of the property tax.”
According to the Finnish Wind Energy Association, in terms of clean electricity production and investments in the green transition, it would be justified and reasonable to implement the property tax solution for offshore wind power as its own legal project.
In addition, we should not wait too long for future tenders for the economic zone, because the competition in the Baltic Sea region is fierce and there are also potential offshore wind power areas elsewhere than in Finland, it added.