New act creates a clear framework for offshore wind projects in Finland's exclusive economic zone

The exploitation of areas in Finland's Exclusive Economic Zone (EEZ) is attracting widespread interest from both domestic and foreign offshore wind operators. The profitability of offshore wind energy construction in Finland is expected to increase as offshore wind technology develops. The development of electricity market prices will also have an impact on the profitability of projects.

Several research permits for offshore wind projects in the EEZ have already been granted by the Finnish Government, but none exclusive right. The projects are at various stages of development, however there are no offshore wind farms in the EEZ yet. The new act aims to improve investment certainty for projects and to clarify the process leading to the granting of exclusive right.

The Act on Offshore Wind Power in the EEZ (the “Offshore Wind Power Act”) entered into force at the beginning of year 2025. The law was truly needed as there were no clear rules for the siting of offshore wind power outside territorial waters, i.e. in exclusive economic zones. Finland's EEZ is an international maritime area, to which the Finnish state has the right for economic exploitation.

Among other things, the Offshore Wind Power Act sets out the framework for the procedure for tendering of the offshore wind power areas in the EEZ in the future. One of the objectives of the act was to harmonise the regulation of offshore wind projects in Finnish territorial waters and in the EEZ. The territorial waters closer to the coast are part of the Finnish State's territory. The Finnish state enterprise Metsähallitus is responsible for managing these public waters and allocates offshore wind areas to project operators according to its own tendering model.

The process starts with the Finnish Government selecting areas suitable for offshore wind power use from the EEZ and deciding to put them out to tender. The Finnish Energy Authority will organise the tendering procedure. In addition to the price offered (the exploitation fee), the selection of the winning bidder is based on qualitative factors, such as the bidder's financial status (turnover, credit rating), experience, skills and other capacity to promote the project (experience in the wind energy sector), the environmental impact of the project as well as safety.

With the new act, offshore wind project developers can no longer apply to the Government for consent for the utilization and construction in the EEZ under the Economic Zone Act. The only way to obtain rights is to participate in a tender organised by the Finnish Energy Authority.

The winner of the tender will have the exclusive right to apply to the Government for an exploitation permit for the area put out to tender. The exploitation permit grants for a limited period of time the exclusive right to conduct exploration in the area, to utilize it for an offshore wind project and enables the application for any other permits required for the project

The exploitation permit is granted to the winner of the tender if the requirements set out in the act are met. At the permit granting stage, information on the number, intended locations, or size of the turbines and other buildings is not yet required. The purpose is that the operator will examine the construction possibilities, including through seabed surveys, and then apply for the necessary permits for the construction.

Participation in the process also involves certain fees and securities (participation security and incentive security), which ensure, among other things, the participant's commitment to the project. In addition, the holder of an exploitation permit is obliged to pay the Finnish Energy Authority an exploitation fee for the right to exploit wind energy in the exclusive economic zone.

It is also worth noting that an exploitation permit is transferable if the requirements set out in the act are met. It is also possible to amend or revoke the permit.

Interestingly, only some of the decisions made under the act are subject to appeal. The decisions of the Finnish Energy Authority on the outcome of the tender procedure, the decision to release the participation security, the decision to exclude from the tender procedure and the decision to release the incentive security are subject to an administrative review. A judicial review may be requested from the Market Court on the decision on the request for an administrative review concerning the outcome of the tendering process or exclusion from the tendering process. These appeals are dealt with by the Market Court as a matter of urgency.

Selection of a site or an exploitation permit does not yet guarantee that the entire area is buildable from an environmental perspective. Offshore wind projects in the EEZ require other permits in addition to the exploitation permit, the most important of which is the water permit under the Water Act. An environmental impact assessment (EIA) must also be prepared in accordance with the Act on the Environmental Impact Assessment Procedure. Power lines from offshore wind farms to the mainland in the EEZ require consent under the Exclusive Economic Zone act. In territorial waters, placing the lines requires at least a water permit, a project permit for constructing a high-voltage line under the Electricity Market Act, and a permit for seabed exploration and surveying under the Territorial Surveillance Act. Additionally, the power line is subject to an Environmental Impact Assessment (EIA). Depending on the project, other permits may also be required. Since there is no planning system in the EEZ, only maritime spatial planning applies under the Land Use Act.

The selection of areas and the preparation of the selection criteria will take place during the year 2025. The first competitive tendering is expected to commence by the end of 2025.