A recent economic impact assessment conducted by Ramboll, a global engineering, architecture, and consultancy company, and commissioned by Ilmatar, a Nordic energy company, highlights the significant regional economic benefits of offshore wind power on Åland and mainland Finland. Ramboll evaluated the direct and indirect economic effects of Ilmatar’s two planned offshore wind power parks, Stormskär and Väderskär, to be constructed in Åland’s territorial waters, using various scenarios.
– Regardless of the scenario employed, offshore wind power demonstrates substantial economic impacts. Beyond its contributions to green energy transition, offshore wind power generates jobs and economic advantages across various sectors in Finland, and enhances regional appeal, says Anna Häger, Regional Manager at Ilmatar Offshore.
The assessment considered three collaboration levels, each associated with escalating economic benefits. This evaluation of offshore wind power’s regional economic impacts at this level is unique. Ilmatar previously commissioned a similar assessment for onshore wind power, published in early 2023, which revealed significant positive economic and societal impacts at the communal, regional, and national levels in Finland.
Ilmatar’s plans to develop offshore wind power on the north side of Åland Islands include self-initiated seabed analysis to ensure the preservation of sea life biodiversity.
Employment and Tax Income in Various Project Phases
Ramboll’s assessment indicates that building offshore wind power in Åland’s territorial waters extends its regional economic impacts to mainland Finland. Given the presence of existing wind power installations in mainland Finland, numerous established actors will benefit from the products and services required for offshore wind power. Throughout its lifecycle, offshore wind power has the potential to generate a turnover of 5.6–8.8 billion euros for companies operating in mainland Finland, corresponding to a labor demand of 28,000-45,000 full-time equivalents (FTE). Tax revenues from offshore wind power could range from 1.3-1.8 billion euros. The assessment assumes an expected lifespan of 25 years for offshore wind power parks, with the possibility of repowering wind turbines, further increasing economic impacts. The assessment underscores that offshore wind power creates new economic opportunities, enhancing regional attractiveness.
Åland Islands experience the most significant economic impact from offshore wind power when wind parks are operational, with an anticipated labor demand of 4,105 – 7,209 FTE. Repowering turbines to extend their lifespan could increase labor demand by an additional 60%. Shipping, insurance, and repair and maintenance sectors in Åland would be the primary beneficiaries, potentially generating turnovers ranging from 730 million to 1.1 billion euros. Åland’s annual gross domestic product (GDP) is expected to grow by at least 1.5%.
Economic impacts are substantial already during the construction phase, with local industries potentially seeing an economic impact of 1.1 billion euros and a labor demand of 1,997- 6,739 FTE over a two to three-year period. During the development and planning phase, an estimated workforce of 347-522 FTE would be needed over seven years.
– The largest economic impacts result from direct impacts. Employment impacts, on the other hand, realize mostly through indirect impacts when many services and products are purchased from various sectors to build and operate the offshore wind farm, who then acquire more products and services from other companies. However, the impacts depend heavily on how companies operating at Åland and in mainland Finland can respond to the changing demand and to develop their operations in the right direction in a timely manner, says Samuel Rintamäki, Consultant, Ramboll Finland.
Opportunities and Challenges
The assessment highlights the vast economic opportunities created by offshore wind power for mainland Finland and Åland Islands. However, it’s essential to bear in mind that the assessment is based on the current economic landscape. As offshore wind power technologies and markets evolve, the figures provided could change, potentially leading to a decrease in labor demand. The assessment evaluated regional economic impacts that would result from the construction of Ilmatar’s Stormskär and Väderskär projects.
Simultaneously, there is a need to develop new skills and knowledge nationally and locally to meet the growing demands of the offshore wind power industry. Transparent and continuous collaboration between stakeholders involved in offshore wind power development and local authorities is critical for the projects’ success and the realization of economic impacts.
– Ilmatar is an independent power producer (IPP). We want to own our production throughout its entire lifecycle. This way, we can be locally present and create a positive impact on the surrounding society. That’s why it’s essential for us to ensure that the groundwork is done correctly and to be open about the opportunities and challenges,” says Anna Häger.
The regional economic impacts of the planned project were assessed with Ramboll’s resource flow model. This model is a regionalized input-output-based model which allows for assessing the direct and indirect impacts from production and consumption that arise across value chains as a result of multiplicative effects from the project. The modelling was conducted at current prices (2023) and at sectoral level, and the results were discounted. The results were analyzed at the regional level of Åland and spread throughout the rest of Finland in total.
The project is based on two offshore wind farms, Stormskär and Väderskär.
Area: 571 km²
Turbines: 123 units, 20 MW each
Total capacity: 2,460 MW
Infrastructure costs: close to 10 billion euros
Operational costs: 100-150 million euros/year
Production: 10 TWh/year, selling at 45-55 euros/MWh
Currently, the average lifespan of offshore turbines is 20-25 years; however, this may evolve with technological advancements. In this assessment, a lifespan of 25 years is used.
+358 40 146 7221
Communications, Marketing & ESG
+358 50 308 0879