Government proposal for an act on offshore wind power in the exclusive economic zone submitted to Parliament

The new regulation would mean a shift from operator-driven to state-led selection of areas for offshore wind power projects, as is the case with Finnish territorial waters. In future, the offshore wind power areas in the exclusive economic zone (the EEZ) selected for competitive tendering would be decided by a government decision. Project developers for offshore wind power areas in the EEZ would be selected through a competitive tendering process organised by the Finnish Energy Authority, while for territorial waters the competitive tendering process would be organised by Metsähallitus, a Finnish state-owned agency for the management of land and water areas. The winner of the competitive tendering process organised by the Finnish Energy Authority would have the exclusive right to apply for an exploitation permit for the tendered area.

We discussed the proposed act for offshore wind power in the EEZ in our blog earlier this year when the draft government proposal was sent out for comments. The basic principles of the tendering model have remained the same in the government proposal as in the circulated draft proposal. Below is a summary of the changes that were made based on the feedback received during the circulation, along with the timetable for selecting offshore wind power areas in the EEZ and the first competitive tendering process.

Changes were made to government proposal based on feedback

Some of the comments have been incorporated into the government proposal. The comments will further be taken into consideration when preparing the government decree on the details specifying the competitive tendering process and when defining the areas that will be subject to the tender.

For example, the minimum requirement of three bidders has been waived, i.e. the tendering of a wind power area can be carried out even if only one bidder participates in the competitive tendering process. The winning bidder could apply for an exploitation permit for a smaller area than the area put out to tender, but otherwise the area put out to tender could no longer be changed or extended by means of an exploitation permit. However, the exploitation permit could allow survey works to be carried out outside the offshore wind power area, for example if required for marine nature surveys.

According to the government proposal, it would also be sufficient for project developers to lodge a single participation guarantee for all the competitive tendering projects in which the project developer is participating at the same time. The time limit for lodging a promotion guarantee has been extended to three months. The amount of the promotion guarantee and participation guarantee as well as the participation fee would be specified in a government decree. The amount of the exploitation fee would be the amount of the exploitation fee offered in the winning tender.

The decision of the Energy Authority on the winning tenderer would be appealed to the Market Court after a procedure for requesting an administrative review. The Market Court is considered to have strong expertise in tendering matters. Upon application, the Government could grant a conditional exploitation permit even if the decision on the outcome of the competitive tendering is not final. However, the permit cannot be granted if an appeal has been lodged against the decision and no decision has been taken on the appeal.

The government decree to be prepared at a later stage will lay down not only the amounts of the guarantees and fees, but also, among other things, the qualitative criteria for the competitive tendering process. The Ministry of Economic Affairs and Employment states that the feedback can be considered when selecting areas for offshore wind power tenders. This feedback suggests focusing on the possibilities of connecting the project to the grid, the studies already conducted by project developers on the suitability of different areas for offshore wind power, and the wind production profiles.

The government proposal also contains sections that have not been amended despite the comments. For example, the new act and the competitive tendering process for offshore wind power areas would not apply to grid connection lines. The permitting of the routing of connection lines, hydrogen pipelines and electricity grid connections would take place in the EEZ in accordance with the Act on the Exclusive Economic Zone of Finland (1058/2004) and on the territory of the Finnish state on the basis of other applicable legislation.

Next steps

The government proposal will next move on to Parliament, which can make amendments to the proposal. The Ministry of Economic Affairs and Employment has also provided preliminary estimates of the timetable for preparing competitive tendering for offshore wind power areas in the EEZ. However, these estimates are only indicative.

According to the Ministry of Economic Affairs and Employment, the details of the tendering process for offshore wind power areas in the EEZ will be outlined in a government decree, with preparation starting in autumn 2024. The regulation is to be sent out for comments in early summer 2025.

The preparation for selecting the offshore wind power areas is also scheduled to begin this autumn. This will enable the Strategic Environmental Assessment of authority plans and programmes to begin in early 2025. According to current estimates, the Government will select the areas in October–November 2025.

In May, the Ministry of Economic Affairs and Employment estimated that the first competitive tendering process would be launched in December 2025. The decision on the winner of the tender would be taken in June 2026, and the project developer would have to apply for an exploitation permit no later than four months after the decision on the outcome of the competitive tendering process has become final. However, the timetables estimated in May have already been stretched slightly, so it is possible that the timetable for competitive tendering will extend a little further. Once the exploitation permit is issued, the project developer would have the right to exploit wind energy in the EEZ and to carry out research for exploitation, which would allow, among other things, the launch of an environmental impact assessment procedure and the permitting of the project.