As the need for wind energy increases, so does a regional imbalance in its distribution.
Regional leaders are calling for a new wind energy tax revenue offset system due to a stark disparity between western and eastern Finland in terms of wind energy distribution, with most wind turbines being concentrated in the western areas.
The main reason for this is a matter of defense policy, as wind turbines can interfere with regional surveillance and radar operations.
Any project to build new wind turbines over 50 meters high or near a strategic area must be submitted to the General Staff of the Armed Forces, which has the right to block such a project. Between 2011 and 2021, around 15% of projects were banned by the Defense Forces, according to its own figures.
Most wind farms are located around the Gulf of Bothnia on the west coast of Finland. More are on the way, as Finland’s climate change expert group said in a report that Nordic countries have set a goal of increasing their wind power capacity fivefold by 2050.
While this development is warmly welcomed by western regions, eastern regions say they are not reaping the benefits of this “wind boom”.
“The territorial control of the Defense Forces was a very important reason for [our lack of wind power]and we understand these reasons”, Markus Hirvonen of the North Karelia Regional Council, a region along the Russian border that has no wind turbines.
Prime Minister’s Government Sanna Marin (SDP) sought to identify ways around these national defense issues in order to evenly distribute wind power across the country.
Eastern regions want wind power compensation
According to a report by the Association of Finnish Local and Regional Authorities, municipalities received €17 million in property taxes from wind farms last year. That number is expected to rise to at least 19 million this year.
The Finnish Wind Energy Association estimates that this figure could reach 30 million euros in the next few years.
Eastern Finland would also like to see some of this money, which is why regional councils are calling for a new compensation system to bolster municipal tax revenue for those without access to wind power.
“A municipal compensation model should be part of the next government program and implemented with extensive production by ministries,” Hirvonen told Yle.
He further pointed out that the eastern regions are happy to control the eastern border – because the defense of the whole of Finland requires it.
“But the basic principle of the rule of law is that the disadvantages it causes, such as the loss of wind energy, must be compensated,” he said.
Under Hirvonen’s model, wind energy revenues would be paid into the state treasury and then distributed among Finnish regions, especially those in the border region.
“If even a small part of the revenue were distributed to border regions, the system would be fair,” Hirvonen explained.
Other regional leaders share Hirvonen’s view on a fairer distribution of funds.
“If wind energy construction is restricted or completely banned in any part of Finland, renewable energy and other funding measures should be directed in particular to those areas,” said Jaakko Mikkola of the Kymenlaakso regional council.
The West is not in favor of compensation
The eastern regions’ call for fair compensation is not a popular position in other regions.
“If we want to promote wind power, the compensation proposal is not effective,” said Pauli Harju of the Oulu Region Council.
With 349 wind turbines, Northern Ostrobothnia – in the west – has Finland’s largest share of power generation devices and accounts for more than a third of the country’s turbines.
According to Harju, the best solution would be to divide Finland into price zones based on the market price of electricity, a model similar to that which has been implemented in Sweden and Norway.
“It would impact the price of electricity and create competitiveness in those areas, much more effectively than with any offset model,” Harju explained.
Other regions in Finland’s “belt of the winds” express sympathy for the eastern regions, but are not in favor of compensation.
“In Lapland, this would mean a virtual halt to wind power projects,” said Mika Riipiof the Lapland Regional Council.
Riipi argued that wind power always has negative consequences, such as loss of landscape value and noise pollution.
With these drawbacks, Riipi argued that it is only fair that areas with wind turbines reap the benefits.
“Full tax revenue for municipalities facing the downside of wind power,” Riipi said.