Offshore wind power a key player in achieving climate goals
Offshore wind power is playing an increasingly significant role in energy production, and the EU’s climate targets are further accelerating investments in this sector. Suomen Hyötytuuli has been systematically developing offshore wind power for more than 20 years, investing over EUR 140 million in their development work.
Last autumn, the European Commission presented an action plan for European wind power. The EU’s goal is for renewable energy sources to account for at least 42.5% of all energy by 2030, with a further aim of reaching 45%. To achieve this, a massive increase in wind power capacity is necessary. Offshore wind power is expected to significantly contribute to meeting the EU’s future climate and energy targets.
“If we want to achieve the EU’s climate goals, offshore wind power is pretty much a necessity,” says Toni Sulameri, CEO of Suomen Hyötytuuli.
“Global energy needs are expected to grow. This means that all possible avenues must be explored if we are to achieve the targets set.”
Currently, there are four offshore wind projects underway in Finnish territorial waters. One of these is the expansion of the Tahkoluoto offshore wind farm, managed by Suomen Hyötytuuli. This project will be completed within this decade, while the others are expected to be finalised in the 2030s.
Nordic countries paving the way for Europe's energy future
“The Nordic countries are already very close to achieving completely emission-free electricity production. The rest of Europe still has a long way to go,” says Sulameri.
One option would be to sell Finnish-produced wind power to Europe. However, a better option might be to use this green electricity within Finland, thereby creating opportunities for industries to invest domestically. “Substantial investments in increasing electricity demand are also a prerequisite for extensively deploying offshore wind power in Finland,” continues Sulameri.
“Moreover, there’s still significant potential for onshore wind power in Finland, so the key to establishing offshore wind power along the Finnish coast could be driven by the needs of the entire European market.”
“On the other hand, there’s still a lot of potential in Finland for onshore wind power, so the key to establishing offshore wind power on the Finnish coast could be based on the needs of the entire European market.”
Innovating for icy conditions
Suomen Hyötytuuli has solid experience in managing icy conditions. Considering the impact of frozen seas during the planning, construction, and maintenance of wind turbines is central to their expertise. By using their own foundation concept designed to reduce pressure and vibration caused by ice masses, Suomen Hyötytuuli has successfully built the world’s first offshore wind farm specifically designed for demanding ice conditions.
“There seems to be a significant demand for our expertise in the local conditions found here in the north,” adds Sulameri.
As a bank, we want to be part of our clients’ journey towards a fossil-free future. We also want to be a viable and relevant sparring partner for them.
A bank with sector expertise
“For financiers, the current challenge is to identify where investments that will increase demand should be allocated, which is essential for making profitable and reliable investments in offshore wind power,” says Jouni Järviluoma Head of Energy Coverage at SEB in Finland.
“In the long term, the demand for electricity will increase, and wind power will play a significant role. This necessitates analysing when the right time to invest is. Additionally, we must consider various options for storing electricity, such as battery solutions,” says Sulameri and Mikko Lankinen, CFO of Suomen Hyötytuuli.
Meeting new financing demands in a changing landscape
“We need more diverse sources of capital compared to before, both in terms of debt and equity. We need to take a fresh approach, considering different types of instruments, which would, in turn, lead to significantly increased investor diversity,” continues Lankinen.
“SEB is a core banking partner for Suomen Hyötytuuli with experience in financing energy projects as well as broad knowledge of the energy sector. It is crucial that our banking partners understand the industry. Offshore wind projects are generally large-scale ventures, requiring an even more effective dialogue with the bank. When that works, it facilitates the cooperation,” says Lankinen.
“As a bank, we want to be part of our clients’ journey towards a fossil-free future. We also want to be a viable and relevant sparring partner for them,” concludes Järviluoma.
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