The greatest investment potential in the green transition is in wind power
According to the project review by the Finnish Wind Power Association (FWPA), Finland has plans for over 130,000 megawatts of wind power. In terms of investment potential, this amount translates to over 200 billion euros in investments. A significant number of these investments are already under construction, with more than three billion euros worth of wind power expected to be completed in Finland during 2024 – 2025. The share of wind power in industrial fixed investments has, in recent years, reached over 25 percent at its peak.
The progression of the energy transition requires a large amount of clean electricity production, with wind power currently being one of Finland’s most significant investment targets. The project list maintained by FWPA currently includes about 90 billion euros worth of planned onshore wind power projects and the potential for offshore wind power investments exceeds 170 billion euros. Although not all projects under development will materialize, the sheer number of planned projects highlights the exceptional investment potential of wind power compared to other sectors.
“Finland’s competitiveness in attracting green transition investments is based on affordable wind electricity and a strong portfolio of wind power projects. These signal to industries planning investments that we have clean, affordable, new electricity production available. At present, wind power is the industry attracting the most investment euros to Finland – with projects currently under construction bringing in over three billion euros in investments by the end of 2025,” says Anni Mikkonen, CEO of the Finnish Wind Power Association.
According to Statistics Finland, the share of wind power in industrial fixed investments has averaged 15 percent over the last five years (2019 – 2023), peaking in 2022 when over a quarter of industrial fixed investments came from wind power.
Boost for green transition investments
The Confederation of Finnish Industries (EK) states that while general willingness to invest is currently declining, the green transition creates opportunities. “High-interest rates, inflation, economic weakness, and increased general uncertainty are currently reducing willingness to invest across the board. However, looking beyond the current economic situation, Finland faces unprecedented investment opportunities in industrial investments based on emission-free electricity within this decade. Finland’s competitive advantage in emission-free electricity leads to electrically powered industrial investments. It is now especially important to strengthen Finland’s competitiveness as an investment environment for the green transition, to ensure that as many of the pending investments as possible can be realized in Finland,” comments Jouko Kangasniemi, an economist at EK.
Wind power is being built in Finland on market terms. Of the 7 gigawatts (GW) of wind power capacity built in Finland to date, over 70 percent has been constructed without state financial support. “Europe is currently experiencing intense competition for green transition investments. As a small economy, Finland cannot attract investments by promising financial support. In addition to affordable market-based new electricity production, it is essential to streamline planning and licensing processes and ensure tax solutions that can improve the profitability of projects. Aligning the property taxation of offshore wind power with onshore wind taxation would be an easily implementable measure to encourage investments forward. At the same time, we create tax conditions that could also generate more tax revenue,” summarizes Mikkonen.