Wind Power: More Clean Electricity under Market Terms Agreements
Finland is increasing the amount of electricity it produces through wind power in the near future. The goal is to increase the production of wind power to at least nine terawatt hours by 2025. Reaching this goal requires investments that are now being made not just with the support of state aid, but also under market terms and, for example through corporate power purchase agreements.
This year, Finland made an even stronger commitment to renewable energy production when Parliament approved a new subsidy system. The system is based on a competitive tender process, which will also be open to wind power producers at the end of the year. Wind power is affordable, which means that it has great deal of potential. Given these circumstances, we expect that the tender process will also lead to an increase in wind power production.
Investments are now also increasingly being made under market terms. This is due to technological development, the increase in the annual output of power plants and an increase in the market price of electricity.
Corporate power purchase agreements (PPAs) have gotten a toehold in the Finnish renewable energy market. In a PPA, the electricity purchaser and producer agree in advance on the price at which the purchaser will buy the future output of a particular wind power plant. This allows the purchaser to support the production of renewable energy and meet the sustainability goals it has set for its own business. The wind power producer for its part gets certainty that the investment will be profitable without subsidies for the duration of the agreement and that it can safely make the decision to finance and build the wind farm.
Renewable energy also offers opportunities for traditional industry and wind power developers to collaborate. If it becomes easier for investors and developers to find one another, public subsidies may no longer be needed at all. We are following the development of the renewable energy market with interest and are proud to be involved in bringing innovative solutions into Finland.