The future of offshore wind power and export opportunities for Finland
The production of offshore wind power is growing globally, and investments are replacing energy production based on fossil fuels. In Europe, large-scale offshore wind power production already exists in the North Sea. New production is planned and built in the North Sea, the western parts of the Baltic Sea and further north to the Gulf of Bothnia. Roughly estimated and combined, the survey projects for offshore wind farms in Åland, Sweden and Finland have a nominal output of as much as 40 GW and the total investment plans exceed EUR 60 billion. New opportunities are developing in Europe along the coasts of the Baltic, North Sea and Atlantic. The WindEurope2024 conference at the end of March 2024 in Bilbao confirmed the strong investment in offshore wind and green transition in European countries, including strong government support in e.g. Ireland and Poland. Nevertheless, even with strong investments in growth, we are not achieving the objectives set by the EU.
Dozens of companies in Finland have woken up to the business opportunities of the growth market. From the perspective of the Finnish economy, employment and the competitiveness of companies, we need to recognize how we can turn the growing offshore wind and special vessels market and the green transition into stronger exports.
Lessons learned from Finland’s energy system to be applied to international markets
Onshore wind power has grown into a significant part of Finland’s self-sufficient energy system in Finland, and it brings positive and emission-free economic impacts to regions and residents. Technological development also opens up opportunities for Finland in terms of offshore wind power. The technological pioneering of offshore wind power in Europe, especially in the Netherlands, Belgium, Britain, Germany and Denmark, has already been a success. Denmark’s success is based precisely on the fact that they have references in building their own wind power to export markets. Such a model is also suitable for Finland.
In recent years, Finland’s energy policy has emphasized technology neutrality and market-based approaches. Thanks to a successful energy and climate policy, Finland’s electricity production is more than 95% carbon neutral. At the same time, increased domestic production has made Finland energy self-sufficient on an annual level. The change could not have come at a better time for Finland: a shared understanding of the need to move away from fossil fuels towards renewable energy sources has just been achieved globally. The importance of these developments is underlined by geopolitical tensions and security of supply.
Offshore wind is a strong part of the green transition
Every energy investment must be profitable: the sale of energy must cover the costs associated with planning, financing, construction and operation in the long term. The viewpoints of emission-free and stable energy production and security of supply speak in favour of nuclear power.
But like nuclear power, offshore wind power divides opinions. It can be perceived as too expensive or unstable an investment due to fact that without wind there is no energy. However, it is important to examine this issue critically. The attractiveness of offshore wind power is increased by, for example:
- Environmental impacts: The construction and production of offshore wind power is very strictly regulated, and the environmental impacts and risks of operations must be assessed quite comprehensively in permit applications. Offshore wind power does not involve high risks related to hazardous goods or their transport, storage or after-treatment.
- Renewable: Wind power is a renewable energy source based on a local resource, wind, and thus reduces dependence on foreign raw materials and transportation. In the open sea, wind strength is significantly higher than on the mainland, which partly compensates for the higher construction costs of an offshore wind power plant relative to onshore wind power. However, it is worth remembering that wind conditions vary greatly from region to region.
- Technology development: The development of offshore wind technology has been rapid; and its cost has fallen significantly in recent years – and continues to fall. The investments, risks, security of supply, raw material dependence, technological development and operating principles required by different energy sources must be critically examined in the light of facts and widely compared.
- Employment impact: The construction and maintenance of offshore wind power creates significant jobs both in the design and construction phases, as well as in maintenance and servicing. This can support the local economy and create sustainable employment in offshore wind farms that are built and operated nearby, for which ports play an important role, for example. Offshore wind power can increasingly develop into a Finnish form of energy production. Finland has traditionally been a strong player in the maritime industry, especially in the design and technology of icebreakers, cruise ships and special vessels. The Finnish maritime industry can offer significant technological expertise in the design, construction and maintenance of offshore wind power plants around the world. There are also opportunities for success in maritime transport and operations, steel structures, electrification, automation and electricity transmission and storage. Ports are also an interesting area – after all, many of them have already accumulated extensive experience in port operations and logistics of onshore wind power projects.
- International opportunities: Finland is located on the Baltic Sea, which gives it a good starting point to take advantage of the international opportunities of offshore wind power. The development of offshore wind power offers export opportunities for Finnish companies and strengthens Finland’s position as a forerunner in sustainable energy production. The closest export markets are in the Gulf of Bothnia in Sweden, additional opportunities in the Baltic countries and Poland, as well as elsewhere in Europe and the global offshore wind farm and special vessel markets.
Investing in more self-sufficient energy production will increase Finnish exports and create new jobs
Offshore wind energy offers an attractive alternative for promoting sustainable development at both national and international levels. Export opportunities must be seized by promoting offshore wind power investments in Finland and creating opportunities for references and new innovations for companies.
Investing in offshore wind power would increase domestic energy production and reduce the costs, risks and dependencies of energy imports. In addition, it would create jobs in design, technology development and manufacturing, construction and maintenance tasks in a remarkably diverse business field.
Port investments and transition to new markets offer new opportunities for growth companies
The biggest obstacles and slowdowns are the permit processes related to the implementation of offshore wind projects. The design, construction and maintenance of offshore wind power require significant investments and technological know-how in offshore wind farm infrastructure, such as ports and energy networks.
Energy production and the energy system must be developed as a whole, also taking into account the tax benefits of exports. Construction and production risks, security of supply and self-sufficiency in technologies and raw materials are also at stake.
By reading the study commissioned by the Finnish Wind Power Association on the regional economic impacts of offshore wind power, you will learn about offshore wind power projects and their significant employment and tax impact in Finland. On Team Renewable Arctic Finland’s website, you will also find a list of companies that have built their capabilities in the offshore wind power market and have also succeeded internationally there. The list of successful Finnish companies is listed above. list even wider.
The Finnish government and municipal decision-makers must invest in the development of offshore wind power. Strong political will and long-term planning are needed in order to create favourable conditions for the growth of offshore wind energy. This includes, inter alia, streamlining permit granting processes, creating incentives and risk-sharing instruments for investment and infrastructure, and supporting research and development to promote innovation in this area.
If you would like to hear more about the topic and get support from experienced experts in offshore wind farm projects, please contact us.
Pekka Pokela is a Director and Ex-Partner at Gaia Consulting Oy since 2010. He is also a part-time Professor of Practice at Aalto University. His broad experience in strategy and business consulting covers sectors like marine and offshore, renewable energy, construction, technology and logistics. His expertise in several corporates’ cooperation in international business development and export delegations started 2013, and has continued in the present form of Team Renewable Arctic Finland (TRAF) consisting of 26 companies from all parts pf the value chain. pekka.pokela@gaia.fi