Finnish Act on Offshore Wind Power in the Exclusive Economic Zone Enters into Force – First Tenders Could Be Organised at the End of 2025

The Act on Offshore Wind Power in the Exclusive Economic Zone (EEZ) has been approved by the President of the Republic of Finland and will enter into force on 1 January 2025. According to the Government, the Act aims to promote offshore wind power in the EEZ and is part of the Government Programme's objective to clarify the rules for offshore wind power.

Under the new Act, the Government will select suitable areas for offshore wind power and oversee competitive tendering for these areas. The Government expects this approach to better coordinate maritime activities, taking into account environmental factors and other marine uses like transport and fishing.

The tendering process consists of three stages: the Government selects the areas, the Energy Authority organizes the competitive tendering, and the winner is granted the exclusive right to apply for an exploitation permit. However, obtaining an exploitation permit does not ensure project implementation, as additional permits, such as a water permit, are required. Amendments during the parliamentary process allow the second-best bidder to apply for a permit if the winner does not. Additionally, the restriction that prevented a bidder from winning multiple tenders simultaneously has been removed.

The next steps involve implementing the Act, with preparations for selecting offshore wind power areas underway. This includes environmental impact assessments and cooperation with a coordination group. The first areas for tendering are expected to be decided by autumn 2025. Additionally, a government decree detailing the criteria for selecting tender winners is being prepared, with stakeholder events planned to discuss environmental and other factors. Once the Government finalizes the areas, the Energy Authority will organize competitive tendering. This is anticipated to take place at the end of 2025, at the earliest.

Given that earlier this December, the Danish offshore wind tender failed to attract any bids, in part due to an inflexible action process and possibly due to failures to adapt to economic challenges related to offshore wind, and in the UK, where a previous auction also did not attract any bids, the price ceiling was raised to 73 pounds per MWh, resulting in a reasonably successful auction process. It is hoped that the Government decree, once issued, will reflect the economic and other challenges facing offshore wind in the EEZ.

Read more in our previous Legal Alert and in the press releases from the UK Government and the Danish Energy Agency.

If you have any questions about this Legal Alert, please feel free to contact the undersigned or your regular Borenius contact.