Next offshore projects
We will bring two new offshore wind power projects to the market both this year and next year. We have identified seven potential sites that are in the marine area plan and provincial plans or in the draft stages of provincial plans.
The will of municipalities plays a significant role in the selection of areas, as municipalities are responsible for zoning in public water areas. The selection of the first items to be brought to the market is also influenced by e.g. preliminary information on the buildability of the base, the transmission capacity of the main grid and the needs of the industry.
We will take the selected areas for approval by the Government, after which we will start the commercial bidding process, where we will look for a responsible implementer for the projects. The competition will last approximately one year.
State area, municipal real estate tax
The construction and operation of an offshore wind farm have a considerable positive impact on the regional economy and business activities. In addition to procurements during the investment’s development and construction, the effects also include real estate taxes, as municipalities in Finland are allowed to tax real estate located in their areas.
Property tax received by the municipality depends on the construction costs of the turbines and the property tax level determined by the municipality. The annual real estate tax income brought by one offshore wind turbine can amount to 70,000 euros. Thus, the annual real estate tax income for the municipality of a large offshore wind farm can be several million euros.
Increased economic activity also creates other regional cash flows, both during construction and after production starts. Employment opportunities include planning, related construction of the wind farm infrastructure, transportation, wind turbine installation work, and accommodation and catering services.
Metsähallitus operates in public water areas
Areas within Finland’s territorial waters are called public water areas. Outside the territorial waters is the exclusive economic zone of Finland, which is regulated on different principles. In addition to the sea areas, public water areas include the open stretches of some of the larger inland lakes.
The public water areas, including the lake and sea bottoms, are the property of the Finnish state, except for the water areas owned by the Åland region. The state owned sea areas within Finnish territorial waters are controlled by Metsähallitus. Metsähallitus also carries out the duties of the property owner.
Offshore wind farms on both sides of the territorial water line
Businesses building offshore wind farms have become more interested in the areas within the exclusive economic zone, despite them being located further away from the coast resulting in increased electricity transmission distances compared to wind farms located within the territorial waters.
The exclusive economic zone of Finland is an international sea area whose borders are determined by agreements between Finland and other countries (Sweden, Estonia, and Russia). In addition to the territorial waters, Finland has jurisdiction over the exclusive economic zone as well as exclusive rights to its natural resources. Finnish law is applied also to the protection of the marine environment in the exclusive economic zone.
The Act on the Exclusive Economic Zone of Finland is applied to the operations within the zone. The economic exploitation of the zone is possible with the consent of the Finnish Government. The permit process for economic activities was not originally (in 2005 when agreements on the exclusive economic zones were first made) established with offshore wind power projects in mind, and the legislation should be further developed in this regard. For example, the current legislation does not provide solutions for situations where several operators compete for the same sea area.
The Government has granted some research permits in the exclusive economic zone for offshore wind power projects.
Other states also enjoy rights over the exclusive economic zone
Other states have the right to navigate and fly over Finland’s exclusive economic zone. They also have the right to lay offshore cables and pipelines. In addition, they can use the zone’s sea areas in ways authorised under international law and compatible with the provisions of the United Nations Convention on the Law of the Sea.
Metsähallitus’ mandate does not cover the exclusive economic zone of Finland. However, we do assist the Ministry of Economic Affairs and Employment as needed, for instance, in mapping areas within the exclusive economic zone suitable for wind power.