In Finland, the transition from fossil to renewable energy sources is well under way; however, recent declines in electricity prices have slowed the pace of new investments in renewable energy production. In 2025, 96% of Finland’s electricity production was covered by fossil-free electricity – ie, nuclear, wind, hydro and solar power – with renewable energy sources accounting for 57% of electricity production. For district heating, which is the most common heating source in Finland, 77% was produced by biofuels as well as waste heat and electric boilers in 2025.

Pursuant to its current National Energy and Climate Strategy, Finland aims to increase the share of renewable energy to more than 50% of end consumption by 2030. At the end of 2025, renewable energy sources accounted for approximately 44% of end consumption.

The most important types of renewable energy sources in Finland are bioenergy, wind power, hydropower and geothermal power. A significant share of bioenergy is derived from forest industry off-flows, side streams and other wood-based fuels.

In 2025, the production of wind power increased by 9% and kept its status as the second largest source of electricity in Finland, surpassed only by nuclear power. Solar power also plays an increasingly important role in the Finnish energy mix; the record-breaking year 2025 in solar power construction saw the doubling of the nationwide industrial-scale solar power capacity.

For several years, Finland saw significant numbers of investments, into wind power in particular. New investments have, however, been scarce during the past couple of years. The most significant investment decision in the past year was that of renewable energy company OX2, which in December 2025 announced that it had made an investment decision for three onshore wind farms in Finland whose aggregate capacity totals 277 MW.

In addition to investments into onshore wind power production, the number of industrial-scale solar power plants increased significantly in the past year, resulting in a total capacity of 478 MW in June 2026.

Apart from announcements concerning new investments into renewable energy production, in December 2025, a long-time actor in Finnish renewable energy development, ABO Energy, sold its entire wind power development portfolio to one of the Finnish leading energy companies, Fortum. The portfolio consisted of 29 projects representing an aggregate capacity of 4.4 GW.

Another significant recent development was the completion in early 2026 of Finland’s largest onshore wind power project, namely project Lestijärvi. The project was developed by OX2, and encompassed 69 wind turbines with an aggregate capacity of 455.4 MW. The wind farm is owned by a consortium of largely municipally owned energy companies in Finland, Kymppivoima, Oulun Energia and Kuopion Energia.

Owing to a decrease in electricity prices on the market, long-term power purchase agreements (PPAs) are becoming increasingly important in order to achieve investment decisions for electricity generation facilities. Combined with the EU requirements for renewable fuels of non-biological origin (such as so-called green hydrogen), and the growing number of large-scale data centre development projects in Finland, the demand for PPAs has also increased. Another effect of the electricity price trend has been an increased interest among electricity producers in participation in the reserve markets maintained by the Finnish transmission system operator Fingrid Plc, thereby securing a diversification of income streams for electricity producers.

The main national laws governing the energy markets in Finland are:

• the Electricity Market Act (588/2013);
• the Natural Gas Market Act (587/2017);
• the Electrical Safety Act (1135/2016); and
• the Act on Guarantees of Origin for Energy (1050/2021).

In addition, the Finnish energy market is largely governed by applicable EU legislation. The Act on Guarantees of Origin for Energy applies to renewable energy sources; however, there is no general separate legal framework for renewable energy in Finland.

Generally speaking, the Finnish planning, permitting and environmental legislation scheme applies to renewable energy projects as such. The main pieces of legislation are:

• the Land Use Act (132/1999);
• the Building Act (751/2023);
• the Environmental Protection Act (527/2014);
• the Water Act (587/2011); and
• the Environmental Impact Assessment Act (252/2017).

The permitting legislation framework does, however, include a number of separate provisions for certain renewable energy projects, which aim to expedite and streamline the permitting proceedings for these renewable energy projects. In addition, the Act on the Permitting Procedures for Renewable Energy Plants and Certain Other Administrative Procedures (1145/2020) sets out certain procedural requirements for the permitting of renewable energy projects specifically, including maximum permit-handling times (see also 2.3 Regulated Activities). The requirements set out in this Act were recently amended and their scope enlarged. The amendments came into force on 1 January 2026.

The Electricity Market Act (588/2013) has recently undergone a partial reform with the purpose of diversifying the contractual structures under which multiple renewable energy projects and hybrid projects can be connected to the electricity grid. In addition, Finnish building legislation has been reformed as of January 2025, including a fast-track for permitting certain renewable energy projects (such as green hydrogen projects) but excluding wind and solar power generation.

Lastly, as of 1 January 2026, the Finnish regional permitting and supervisory authorities for environmental permits was combined into one authority. Simultaneously, certain environmental permit proceedings were combined with the aim of achieving a one-stop-shop principle for environmental permitting.

The Finnish government is also preparing a number of other legislative changes that directly affect the development of renewable energy projects. Such updates include:

• introducing a new solar power land use planning instrument, much like the wind power general plan applicable for wind power projects;
• extending the Finnish State’s taxation right to the exclusive economic zone (EEZ), meaning that offshore wind projects in the EEZ would, in the future, be liable to pay property tax and income tax as well (to date, the EEZ has been excluded from the Finnish taxation regime);
• lowering the property tax rate for offshore wind;
• introducing wind power-specific regulation concerning the demolition of wind turbine generators; and
• introducing a new hydrogen market act in order to take into account the hydrogen economy and applicable EU gas regulation.

The Finnish Energy Authority and the Finnish Competition and Consumer Authority are the two main authorities for monitoring and supervising compliance with applicable legislation by actors in the energy markets. Further, the Finnish Radiation and Nuclear Safety Authority supervises operators in the nuclear energy sector.

The main national regulator of the wholesale energy market in Finland is the Energy Authority. The competence of the Energy Authority includes monitoring compliance with the REMIT Regulation. According to the REMIT Regulation, a penalty must be imposed for breaches of the prohibition of market manipulation. In Finland, the Energy Authority can impose an administrative penalty fee for market manipulation, the amount of which is determined case by case based on an overall assessment carried out by the authority.

Further, the Energy Authority oversees the protection of consumers with respect to the energy sector by monitoring compliance with relevant laws and regulations. The Consumer Ombudsman co-operates with the Energy Authority to ensure lawful marketing practices and pricing.

In addition, the responsibilities of the Energy Authority include (for example):

• monitoring the pricing of network operators over four-year periods, including calculating and monitoring each network operator’s reasonable rate of return;
• maintaining a comparison tool for comparing electricity sales conditions between suppliers;
• handling registrations, permits and control related to emissions trading, as well as approving emissions trading verifiers; and
• managing the feed-in tariff scheme, and organising auctions for renewable energy subsidies and infrastructure projects.

All electricity market participants must also adhere to the Consumer Protection Act and the Competition Act (948/2011). The Finnish Competition and Consumer Authority and the Consumer Ombudsman acting under the Competition and Consumer Authority supervise market participants’ adherence to the aforesaid legislation.

The Finnish Competition and Consumer Authority also has the authority to investigate and intervene in non-compliance with the Competition Act, such as unlawful anti-competitive behaviour and cartels. The Competition and Consumer Authority is entitled to conduct investigations in a business operator’s facilities (so-called “dawn raids”). Market actors, as well as individuals, are obligated to provide relevant information to the authority. The primary sanction for unlawful anti-competitive behaviour is a penalty fee imposed by the Competition and Consumer Authority. The amount cannot be more than 10% of the relevant entity’s global turnover but shall be determined on a case-by-case basis, taking into account the nature, extent, reprehensibility and duration of the breach.

Overall, renewable energy is not separately handled in Finnish legislation, but is governed by the same legal framework as other energy forms and construction activities (see also 2.1 Governing Law and Upcoming Changes and 2.2 Regulating Authorities).

Planning and Construction

The principal law governing all construction activities in Finland, including construction of generation facilities, is the Building Act (751/2023). In contrast, land use planning and zoning are regulated under the Land Use Act (132/1999). In general, all construction in Finland should primarily be based on and constructed in accordance with a valid land use plan approved by the local municipality. However, the Building Act includes a specific type of permit called a siting permit for clean transition projects, which replaces the need for a zoning process for the project types falling under the scope of this separate siting permit, thereby expediting the planning phase.

The siting permit for clean transition projects applies to (inter alia) renewable energy production – however, excluding wind and solar power – as well as the production of hydrogen from other than fossil fuels. Wind power projects fall under the scope of a wind power-specific land use planning instrument, and the government also intends to introduce a similar instrument for solar power projects (see also 2.1 Governing Law and Upcoming Changes).

In addition to the land use and building legislation, legislation concerning the need for environmental impact assessments (the Environmental Impact Assessment Act (252/2017)), environmental permits (the Environmental Protection Act (527/2014)) and water permits (the Water Act (587/2011)), as well as other environmental legislation (such as the Nature Conservation Act (9/2023)), may also become applicable when constructing a renewable energy project.

Several procedural legislation initiatives have been adopted in order to expedite the permitting of certain projects subject to environmental permits. For example, the environmental and water permits for certain projects, and their appeal processes, shall temporarily – until 2030 (permits) and 2032 (appeals) – be handled with priority in the relevant permitting and appeal authorities. This procedural priority applies to (for example) renewable energy production facilities, hydrogen production facilities (excluding hydrogen derived from fossil fuels), and projects that fulfil certain do-no-significant-harm requirements.

In addition, a separate Act on the Permitting Procedures for Renewable Energy Plants and Certain Other Administrative Procedures (1145/2020) sets out procedural deadlines for certain environmental-related permits if required for renewable energy projects. The deadlines apply to new industrial-scale facilities producing renewable energy and currently vary between one to three years depending on the project size.

Ownership and Operation

The principal laws governing the system of ownership of utilities and energy systems in Finland are the Electricity Market Act (588/2013) and the Natural Gas Market Act (587/2017). The operation of generation facilities is governed by the Electricity Market Act (588/2013), the Natural Gas Market Act (587/2017) and the Nuclear Energy Act (990/1987). In addition, applicable environmental legislation must also be adhered to when operating generation facilities.

On a general level, the Electricity Market Act and the Natural Gas Market Act regulate the construction of grid networks, market structures, unbundling requirements, and the supply and sale of electricity or natural gas. The requirements apply to all types of electricity and natural gas and are not specific to renewable energy. With respect to the regulation applicable to the supply of energy, please see 5. Trade and Supply.

The energy industry in Finland consists of a combination of state-owned companies and privately owned companies. There are no explicit restrictions regarding the sale of power industry assets or businesses in Finland. However, see also 2.5 Market Access and Foreign Investment. In addition, transactions that meet the turnover thresholds set out in the Competition Act (948/2011) require the approval of the Finnish Competition and Consumer Authority.

With respect to operations subject to authority permits, the relevant permits would need to be transferred to the assignee in connection with the sale of a power industry asset. However, in general, transfers of permits to actors continuing the operations of the initial permit-holder only require notifying the relevant authority of the transfer.

A few legislative restrictions on foreign investments in critical entities or real property apply in Finland, all with the main purpose of securing national defence interests.

Screening of Foreign Corporate Acquisitions

The Finnish Ministry of Economic Affairs and Employment monitors foreign investments in Finnish entities pursuant to the Act on the Screening of Foreign Corporate Acquisitions (172/2012). The purpose of the Act is to allow the Ministry to limit the influence of foreigners and foreign entities in certain Finnish companies if important national interests are involved. Companies subject to screening pursuant to the Act include companies active in the defence industry and companies providing critical services or products to Finnish authorities. Advance confirmation must be sought from the Ministry of Economic Affairs and Employment for foreign acquisitions of companies subject to the legislation. The term “foreigners and foreign entities” refers to persons or entities residing outside the EU or the European Free Trade Association (EFTA).

Restrictions on Real Estate Transfers

Two pieces of Finnish legislation restrict the acquisition of real property by foreign persons or entities, as set out below. It is worth noting, however, that these acts apply only to direct real property acquisitions, and do not, therefore, affect indirect ownership changes in (for example) entities holding rights to or owning real property in Finland.

The Finnish State’s right of pre-emption

According to the Act on the State’s Right of Pre-emption in Certain Areas (469/2019), the Finnish State has a right of pre-emption in a real property transaction if the acquisition concerns a real property that is needed to ensure national defence, border control or border security, or in order to be able to control and safeguard territorial integrity. The State’s right of pre-emption provides the State with the right to redeem the property sold (including any movable property included in the target of the transaction) at the same price and the same terms as the original acquisition. The Act does not apply in the territory of the province of Åland. The decision on the exercise of the right of pre-emption is made by the Ministry of Finance.

Special permission

The Act on Transfers of Real Estate Requiring Special Permission (470/2019) requires that buyers from outside the EU and the European Economic Area (EEA) need to obtain permission for acquiring real property in Finland. The permission is sought from and granted by the Ministry of Defence. Permission for the acquisition of a real property unit may be granted if the transfer is not deemed to complicate the organisation of national defence, the surveillance and safeguarding of territorial integrity, or the assurance of border control, border security or the maintenance of emergency stocks of critical supplies.

The most significant sources of renewable electricity production in Finland are wind power, hydropower and wood-based biofuels, with solar power increasing rapidly as well. In particular, the amount of electricity produced by wind power has steadily increased since 2010 and is expected to continue to increase over the coming years as projects under construction are connected to the grid, and projects under development reach investment decision maturity. In 2025, wind power was the second largest source of electricity production in Finland.

The Finnish electricity-generation market includes several companies specialised in renewable energy production, such as wind and solar power.

Finnish renewable electricity-generation facilities are largely owned by privately or municipally owned actors. The largest wind power producers include municipally owned companies Suomen Hyötytuuli and Helen, and a consortium of Kymppivoima, Oulun Energia and Kuopion Energia, as well as privately owned companies Ilmatar Energy, Neoen, Taaleri Energia, Exilion Tuuli and EPV Tuulivoima. The majority of the wind turbines installed in Finland have been supplied by Vestas (51% of the installed capacity by June 2026), with Nordex Acciona being the second largest with 29% of the installed capacity.

The only operational green hydrogen facility in Finland is owned by the privately owned P2X Solutions.

The production and supply of electricity in Finland is largely governed by the Electricity Market Act (588/2013).

In 2024, approximately 933 GWh of biogas and biomethane was produced in Finland. The most important production plant types include on-farm agricultural waste facilities, biowaste and sludge co-processing plants, and landfill collection sites. Finland aims to increase its renewable gases (biogas, biomethane and synthetic methane) to production of around 4 TWh by 2030.

The majority of biogas is produced from biowaste and sewage sludge. The majority of biomethane is produced in co-processing plants for biowaste and sludge. Small amounts of heat and electricity are produced as side products of biogas production, with no significant market impact. Only a few biogas plants in Finland have a grid connection, which allows direct injection into the gas grid. Biomethane is often used as fuel in the transport segment or for replacing natural gas in various industries. Biogas is produced and sold either in liquefied or gaseous form. The importation of biogas guarantees of origin – particularly from Denmark – has been on the rise. Guarantees of origin are used to replace natural gas volumes in the Finnish market.

Reflecting this growth trajectory, multiple new biogas and biomethane production projects are currently under construction or in planning across Finland. A notable example is Copenhagen Infrastructure Partners’ final investment decision in September 2025 to build what is expected to be Finland’s largest biogas plant, in Nivala, once operational.

Gasum Oy is one of the largest industrial biogas producers, with multiple plants in Finland and the Nordic countries. Gasgrid Finland Oy, as the gas transmission system operator (TSO), administrates the biogas guarantee of origin registry and the injection and use of biogas within the transmission system.

The supply of gas – both natural gas and gas derived from renewable sources – is governed by the Natural Gas Market Act.

A distinctive characteristic of Finnish homes is that they do not rely largely on gas heating, but rather mainly on district heating or electrical heating. District heating is largely dependent on renewable energy, and renewable energy and waste heat accounted for more than 75% of the heat production in Finland in 2025.

District heating is usually produced in production plants either together with electricity or as heat alone. The same district heating network has several production plants to ensure that heat can be produced according to seasonal demand. Reserve capacity ensures heat production even during maintenance and disruptions. The fuels used by the reserve capacity facilities vary depending on the location and production plant, and include wood or other biomass, coal, natural gas, peat, waste or oil.

Various types of heat pumps and hybrid solutions – in which at least part of the district heating is produced using solutions other than combustion – are becoming more common methods of district heating production. Surplus heat from industry as well as (for example) data centres and waste water can be utilised as district heating with the help of heat pumps.

Finnish heat-generation facilities are owned largely by municipally owned local energy companies. However, the Finnish State holds a significant stake (approximately 51%) in the energy company Fortum, operating electricity production plants as well as district heating facilities and combined heat and power (CHP) plants. Other major Finnish heat-generation actors include Helen (fully owned by the City of Helsinki), focusing on electricity and district heating production.

Heat production is subject to limited specific regulation. However, the Act on Guarantees of Origin for Energy (1050/2021) provides for guarantees of origin for, inter alia, heat and cooling produced from renewable energy sources, as well as from waste heat and cold (see also 5.5 Renewable Energy Certificates and (Corporate) Power Purchase Agreements). In addition, district heating operators must comply with the Energy Efficiency Act (1429/2014), which sets out obligations for suppliers regarding, inter alia, measurement of heat consumption and invoicing, as well as, since 1 January 2026, mandatory minimum contractual requirements (see further below).

While not legally binding, the contract terms recommended by Energiateollisuus ry (Finnish Energy) are widely adopted by the district heat retailers. Until 1 January 2026, district heating and cooling retail agreements in Finland were governed only by non-binding industry-standard terms and conditions, with no dedicated statutory regime for contract content. A new Chapter 3a of the Energy Efficiency Act (1429/2014), inserted by amending Act 1382/2025 and in force from 1 January 2026, now introduces mandatory minimum requirements for district heating and cooling retail agreements, from which the retailer may not deviate to the end customer’s detriment in the end-use agreement.

In addition to the energy market-specific regulation, suppliers must also adhere to consumer legislation, mainly the Consumer Protection Act (38/1978), which sets out requirements for reasonable agreement terms and reasonable pricing.

In past years, uncertainties have surrounded the profitability of green hydrogen projects due to the undeveloped market in Finland. The implementation of hydrogen production has been hindered by uncertain demand and a lack of infrastructure, such as a hydrogen transmission grid.

Furthermore, several hydrogen projects are under way in Finland’s industry-heavy sectors. One recent highlight was a decision by the European Commission in May 2026 to grant EUR224 million in investment aid from the EU Innovation Fund to a hydrogen refinery project in northern Finland. The project is developed by Vetyalfa, a Finnish privately owned company. The same project has also received EUR150 million investment support from Business Finland (a public organisation acting under the Ministry of Economic Affairs and Employment of Finland).

Finland aims to become the European leader in the hydrogen economy across the entire value chain. By 2030, Finland aims to produce at least 10% of the EU’s hydrogen. The Hydrogen Cluster, a coalition of companies in the hydrogen economy, has published a strategy to accelerate the hydrogen economy in Finland. The Finnish government has tasked the national gas transmission system operator, Gasgrid Finland Oy, with promoting the development of hydrogen infrastructure, international infrastructure co-operation and the hydrogen market in the Baltic Sea region. A hydrogen transmission network is currently being planned by Gasgrid Finland Oy, which aims to have an extensive hydrogen infrastructure in place by the 2030s. The Finnish government is currently preparing a new hydrogen market act to follow in the footsteps of the Natural Gas Market Act (587/2017).

The Act on the Safety of Handling Dangerous Chemicals and Explosives (390/2005) forms the legislative basis for hydrogen production. Licensing obligations and supervisory authorities are determined according to the scope of activities, as further established in a decree based on the aforementioned Act.

Biofuels are liquid or gaseous fuels used in transport. Examples of biofuels include bioethanol and biodiesel. In 2025, biofuels accounted for 16% of road transport energy consumption in Finland. Bioliquids are liquid fuels produced for purposes other than transport (eg, heating), such as pyrolysis oil. Both biofuels and bioliquids are produced from biomass.

Biofuels and bioliquids must meet EU sustainability criteria. The Finnish Act on Biofuels and Bioliquids (393/2013) sets out the EU sustainability criteria and the procedures to be followed to demonstrate compliance with them. In Finland, the Energy Authority is responsible for the official tasks under said Act.

Generally, no permitting or administrative processes apply to solar energy production facilities when the energy is produced for domestic use (ie, less than 10 kW), mainly for consumption in detached houses, summer cottages or other small buildings. As such, compliance with municipal building regulations is generally sufficient.

However, the installation of solar panels or collectors requires a permit from the municipal building control authority if it has a significant impact on the townscape or the environment, or if the building/area is protected or is of cultural or historical significance. Building regulations vary from municipality to municipality, and different municipalities may have different requirements for permit procedures. Solar panels may be exempt from permits, but in such case a notification must be submitted to the building control authority.

The Finnish electricity grid consists of the nationwide transmission grid, which is operated by the national electricity transmission system operator (TSO) Fingrid Oyj, and regional distribution networks, which are operated by distribution system operators (DSOs).

Transmission

The Finnish national electricity TSO is Fingrid Oyj, whose main owner is the Finnish State (holding approximately 59% of the shares and approximately 81% of the voting rights).

The national transmission grid is fully owned and operated by the TSO. Pursuant to the Electricity Market Act (588/2013), the TSO is obligated to develop the transmission grid and to provide safe, reliable and efficient electricity transmission.

Finland applies the ownership unbundling model for the electricity TSO, and the TSO is regulated in the Electricity Market Act. The Finnish Energy Authority supervises compliance with the aforementioned legislation.

Distribution

Finnish electricity DSOs are in general either municipality-owned or privately owned entities. Electricity distribution in Finland is carried out by 77 holders of a permit for operating an electricity network, and nine holders of a permit for operating a high-voltage electricity network. Major electricity DSOs include privately owned Caruna Oy and Elenia Network Plc, as well as municipally owned Helen Electricity Network Ltd.

Pursuant to the Electricity Market Act, an entity operating on the electricity market must, in general, legally unbundle its electricity network operations (either transmission or distribution networks) from other electricity business operations, and its electricity business operations from its other business operations. The unbundling requirements do not apply to actors with only minor operations.

The Finnish Energy Authority supervises compliance with the aforementioned legislation.

Storage

Finland has seen a rapid increase in battery energy storage system (BESS) development and construction in the last couple of years. BESS projects are often constructed as standalone assets, participating in the reserve markets (see also 4.2 Intermittency, Grid Congestion and Flexibility) and trading electricity on the electricity markets. Following a recent change in the Finnish Electricity Market Act (588/2013), hybrid solutions with BESS assets operating together with electricity production units behind the same connection point are also possible, and are being developed and constructed.

According to information gathered by the TSO Fingrid, the total capacity of BESS projects connected to the Finnish electricity grid was estimated to be 1,050 MW, out of which BESS projects with a capacity exceeding 1 MW represented 980 MW.

Parties operating in the Finnish electricity market are responsible for planning and balancing their production and consumption in advance. However, the Finnish TSO Fingrid Oyj is responsible for maintaining a balance between consumption and production each hour. This is achieved by activating regulating bids from the balancing power markets that it manages and by activating reserve capacity.

Fingrid resolves short-term congestions (or bottlenecks) in the main grid commercially through counter-trades, while long-term congestions are resolved either through price areas or by grid reinforcement. Counter-trading is used to adjust the regional distribution of power plant production based on market conditions.

Finland is part of the Nordic wholesale electricity market, which includes the Nordic (excluding Iceland) and the Baltic countries. Thus, if transmission capacity is insufficient – for example, if the transmission capacity between Finland and Sweden is lower than the transmission demand – the electricity exchange divides prices into price areas.

As part of the electricity market, Fingrid maintains a reserve market from which it acquires the necessary balancing reserves on a market basis. Fingrid has a bilateral standard agreement in place with its contractual partners (ie, electricity market operators), which sets out the terms for flexibility of electricity production or consumption in order to manage transmission in the main grid when necessary.

Fingrid is also predicated on its standard connection agreement terms, and is entitled to enforce curtailment orders for electricity production and consumption facilities if necessary to ensure stability of the transmission grid. Local DSOs have incorporated the same terms into their agreements.

During past years, Fingrid has also been seen requiring that project owners ensure capabilities to handle grid stability risks, as well as denying new projects access to the grid in certain areas while grid reinforcement projects are being completed.

In recent years, renewable energy operators have expressed interest in various Power-to-X solutions that would enable electricity produced from renewable energy sources to be used directly to produce energy (eg, green hydrogen) for end users without needing to transmit the electricity through the transmission or distribution grids. However, augmenting these solutions to an industrial scale still requires further technological development.

In order for biogas to be fed into the gas network, it must be upgraded to biomethane by increasing its methane content. To establish a biogas feed-in point in the Finnish gas system, a connection agreement must be made with the network operator to which the biogas feed-in point will be connected.

The Finnish gas grid consists of a high-pressure transmission grid and low-pressure distribution grids.

Transmission

The Finnish national gas TSO is Gasgrid Finland Oy, fully owned by the Finnish State.

Finland applies the ownership unbundling model for the gas TSO, and the TSO is regulated in the Natural Gas Market Act (587/2017). The unbundling of Gasgrid Finland Oy from the state-owned Gasum Oy occurred on 1 January 2020, in connection with the opening of the Finnish natural gas markets for competition.

The national gas transmission grid is fully owned and operated by the TSO, and pursuant to the Natural Gas Market Act the TSO is obligated to develop the transmission grid and to provide safe, reliable and efficient gas transmission services.

Distribution

Finnish gas DSOs are, in general, either municipality-owned or privately owned entities.

The distribution network operations of the gas network in Finland are currently not subject to legal or operative unbundling requirements due to the distribution system operators’ number of customers falling below 100,000. However, gas distribution system operators need to comply with accounting unbundling requirements set out in the Natural Gas Market Act (587/2017).

The Finnish Energy Authority supervises compliance with the aforementioned legislation.

The length of the district heating network in Finland is approximately 16,000 kilometres. In district heating networks, the thermal energy produced at production plants is transferred to customers in the form of hot water through a closed two-pipe (supply and return pipe) district heating network. The district heating water circulating in the supply pipe entering the building transfers heat to customers via heat exchangers, and returns to the production plant in the return pipe to be reheated.

No unbundling requirements apply to heat production and transmission activities. Typically, the district heating grids are owned and operated by municipally owned companies that also produce heat. However, in recent years, heat producers have been increasingly looking to diversify their heat production with the aim of increasing the share of renewable energy sources in heat production. One company active in searching for solutions to decarbonise the heating sector is Vantaan Energia Oy, jointly owned by two of the largest cities in Finland, Vantaa and Helsinki.

Currently, Finland lacks a national hydrogen transmission grid. However, Gasgrid Finland Oy, the Finnish gas grid TSO, is developing a hydrogen transmission network. The Finnish government is currently preparing a Hydrogen Market Act that would regulate the transmission and distribution of hydrogen in Finland. Gasgrid Finland Oy’s goal is to have an extensive hydrogen infrastructure in place in Finland by the 2030s. Gasgrid Finland Oy’s target is to build a network that would connect wind and solar power production areas to industrial areas where potential hydrogen or hydrogen derivative end users are or would be located. The first phase is to pilot hydrogen transmission between the municipalities of Joutseno and Imatra.

Around the Gulf of Bothnia, Gasgrid and Sweden’s Nordion Energy are planning the Nordic Hydrogen Route to serve the steel industries in northern Finland and northern Sweden. The Nordic-Baltic Hydrogen Corridor would connect Finland and the Baltic countries to the Central European hydrogen network. The Baltic Sea Hydrogen Collector will connect Finland, Sweden and Germany via a hydrogen pipeline under the Baltic Sea.

In addition to pipelines, hydrogen can be transported with the use of terminals, in liquefied form or converted into methane, ammonia or methanol. Although no hydrogen terminal projects have been announced yet, pure liquefied methane (bio-LNG or e-LNG) can be transported via existing liquefied natural gas (LNG) terminals.

A construction permit from the Finnish Safety and Chemicals Agency (Tukes) is required for the construction of hydrogen transfer piping – ie, piping located outside the production facility. A building permit is subject to compliance with the safety requirements of the Chemical Safety Act (390/2005). Operators are responsible for pipes within production facilities, which are subject to the Pressure Equipment Directive (PED). If the plant produces gas for injection into the natural gas network, an agreement with the network operator is required in accordance with the Natural Gas Market Act (587/2017) to connect the plant to the natural gas network.

Electricity supply has traditionally been handled by electricity producers. However, Finland has seen a trend of energy companies divesting their electricity supply business to entities that do not have their own power generation. Power supply companies are generally either municipality-owned or privately owned companies. Large players include Fortum Corporation, Helen Ltd and Väre Oy.

Electricity supply is subject to only limited regulation. The Electricity Market Act (588/2013) sets out regulations for, inter alia, informing the Energy Authority of applied pricing terms. Further, the supplier with the largest market share in a specific area is subject to a legal obligation to supply electricity to end users in that respective area. In other respects, an electricity supplier may freely choose its customers. Freedom of contract applies to electricity supply agreements. In addition to energy market-specific regulation, suppliers must also adhere to consumer legislation – mainly the Consumer Protection Act (38/1978), which sets out requirements for reasonable agreement terms and reasonable pricing.

The leading wholesale electricity marketplace in Finland is the one maintained by Nordpool AS, providing both day-ahead and intra-day electricity trading. However, alternative marketplaces are also available.

Actors operating in the wholesale electricity market must also ensure the balancing of the electricity system by either appointing or acting as a balance responsible party. The ultimate responsibility for the balancing of the system lies with the TSO Fingrid Oyj. Finland constitutes one price and balancing area.

Imports and exports of electricity to and from other jurisdictions are permitted in Finland. Imports and exports of electricity between Finland and its neighbouring countries are generally market-driven.

The gas supply market consists of state-owned and privately owned companies, of which state-owned Gasum Oy and privately owned Auris Energy Oy are two of the leading players, with a number of emerging suppliers having entered into the Finnish market (including Baltic energy companies).

Gas is typically supplied in the wholesale market via bilateral trades, in the retail market on the basis of standard contractual terms, and it is also possible to trade gas on a gas exchange common to Finland and the Baltic region. Gas supply is subject to limited regulation. The Natural Gas Market Act (587/2017) sets out regulations for, inter alia, informing the Energy Authority of applied pricing terms. Further, the supplier with the largest market share in a specific area is subject to a legal obligation to supply gas to end users in that respective area. In other respects, a gas supplier may freely choose its customers. In addition to energy market-specific regulation, suppliers must also adhere to consumer legislation, mainly the Consumer Protection Act (38/1978), which sets out requirements for reasonable agreement terms and reasonable pricing.

District heating systems in Finland are closed, and pricing is based on prices set by the district heating utility. See also 4.4 Heat.

To date, the market for trade and supply of hydrogen is quite undeveloped in Finland, with the first hydrogen production plant having commenced commercial operations in 2025. Please also see 3.4 Hydrogen and Other Biofuels and Renewables and 4.5 Hydrogen and Other Biofuels and Renewables.

The EU’s objective is for 29% of energy consumed in transportation to come from renewable sources by 2030. In Finland, this goal is achieved through an annual obligation imposed on transport fuel distributors to supply a minimum amount of sustainable renewable fuels for consumption. This obligation is called the distribution obligation. This obligation applies to distributors of road transport fuel who supply at least one million litres of gasoline, diesel, natural gas, biofuels, biogas or renewable fuels of non-biological origin for consumption during a calendar year. For gaseous fuels, the distribution obligation is limited to 9 GWh. The distribution obligation promotes the use of renewable fuels and renewable transport electricity in road transport instead of fossil fuels. The obligation to distribute biofuels is 19.5% in 2026 and will steadily rise to 34% by 2030.

The distribution obligation and the use of renewable energy are regulated by the Act on the Promotion of the Use of Biofuels in Transport (446/2007). Biofuels and bioliquids must meet the EU sustainability criteria set out in the EU Renewable Energy Directive (RED II). The Finnish Act on Biofuels and Bioliquids (393/2013) sets out the EU sustainability criteria and the procedures to be followed to demonstrate compliance with them. In Finland, the Energy Authority is responsible for the official tasks under said Act.

The Finnish market for guarantees of origin (GOs) is regulated by the Act on Guarantees of Origin for Energy (1050/2021), which implements the RED II Directive, and the Government Decree on Guarantees of Origin for Energy (1081/2021). In Finland, GOs are issued for:

• electricity produced from renewable energy sources, nuclear power and efficient co-production;
• renewable gas and hydrogen produced from renewable energy sources; and
• heat and cooling produced from renewable energy sources, as well as from waste heat and cold.

The Finnish Energy Authority is registrar of the registry of GOs for heating and cooling. The registrar of the registry of GOs for electricity is the electricity transmission system operator Fingrid Oyj. Fingrid Oyj has delegated this task to its fully owned subsidiary, Finextra Oy. The registrar of the registry of GOs for gas and hydrogen is the gas transmission system operator, Gasgrid Finland.

A long-term electricity purchase agreement, or power purchase agreement (PPA), enables energy investments by guaranteeing a stable income for the electricity supplier. The number of PPAs for renewable energy in the Nordic countries has grown rapidly since 2010, and the first wind power PPA was announced in Finland in 2018. Now, PPAs for wind power projects have become a common way of selling electricity to large electricity consumers and reaching investment decisions. PPAs can be either physical PPAs, where the renewable energy producer and the electricity purchaser are physically connected to the same electricity grid, or virtual PPAs (VPPAs), which enable environmental benefits to be achieved without the electricity purchaser being physically connected to the same grid as the renewable energy producer.

A unique feature of the Finnish energy sector, the so-called “Mankala” model, is in its own way a type of PPA structure: the owners of a Mankala company have access to the electricity produced by the production facilities they jointly own at cost price, in proportion to their ownership.

Finland’s onshore renewable energy market – especially wind – has rapidly matured. As of June 2026, over 9,500 MW of wind capacity had been installed. The onshore development pipeline is also significant, with 142 turbines under construction, 574 already permitted and 5,299 in the permitting phase as of January 2026. The largest single onshore wind project under development has a capacity of 1,200 MW, while the smallest single project is 4 MW. The average capacity of an onshore wind power project under development is 143 MW.

Also, solar power and battery energy storage facilities have been developed at scale during past years. As of August 2025, the total capacity of solar power projects under development (including projects in the construction phase) in Finland reached 26,000 MW, while battery energy storage projects being developed in connection with a wind or solar power project represented 8,500 MW. A significant number of projects under development are being developed as hybrid projects, combining two or more production technologies.

Other renewable energy projects under development in Finland include several bioenergy, biogas and hydrogen projects.

In January 2026, the wind power developers with the largest development portfolio of onshore wind power projects were OX2, Fortum, Ilmatar Energy and Tuulialfa.

Significant solar power developers include Forus, Ilmatar Energy, Neoen Renewables, OX2 and SAJM Holding. The most advanced hydrogen project developments have been carried out by, inter alia, P2X Solutions and Ren-Gas.

Permits and Authority Proceedings

The construction of renewable energy facilities typically requires a valid land use plan. Land use plans and the planning process are governed by the Land Use Act (132/1999). Most commonly, generation facilities require a master plan, or a detailed zoning plan depending on the project type and the area and impacts of the project. Certain projects are also eligible for a specific siting permit (see 2.3 Regulated Activities). The zoning process for land use plans includes several stages:

• a participation and assessment scheme, which includes the preliminary objectives of the plan, the need for studies, the scope of the impact assessment and the organisation of public participation;
• a draft plan;
• a plan proposal; and
• an approval of the plan by the municipal council.

The commencement of the land use planning process and the participation and assessment scheme must be published. A public hearing must be held concerning the draft plan. The plan proposal shall be made available to the public and opinions from the necessary authorities and stakeholders shall be requested.

In addition, the construction and operation of a renewable energy project may typically require one or several of the following permits:

• a building permit;
• an environmental permit;
• a water permit;
• an aviation permit;
• a permit for processing and storing dangerous chemicals; and
• a statement from the defence forces.

In addition, certain projects may require an environmental impact assessment (EIA), as well as other specific permits or decisions. Please also see 2.3 Regulated Activities.

Obtaining a Location

Obtaining a location for an onshore energy project generally happens through one or several long-term land lease agreements. Land acquisition is, however, not unheard of – especially with respect to projects that require a limited amount of space. Both land leases and acquisitions are made based on bilateral agreements that can be freely negotiated between the relevant parties.

Construction and Operation

Finnish law does not contain specific provisions for construction or work contracts. Instead, the industry relies on standardised contractual terms developed by stakeholders. One of the most used frameworks is the YSE 1998 General Conditions for Building Contracts, which are widely adopted in construction agreements. Although these terms are not legally binding unless explicitly included in a contract, they reflect the common expectations and practices of Finnish parties and are often treated as a de facto standard in the industry.

It is typical for the balance of plants of energy projects to be implemented by construction contracts based on the YSE 1998 General Conditions for Building Contracts, while main components are often contracted separately from the supplier(s). Supply agreements for main components often originate from an international industry standard, such as FIDIC.

In Finland, the most active sector in offshore energy development is the offshore wind power sector. Other forms of offshore renewable energy are being investigated, but with very limited public information.

Currently, Finland has one offshore wind power project in operation in Tahkoluoto, owned by the municipally owned Mankala company Suomen Hyötytuuli. The Tahkoluoto offshore wind farm was taken into use in two phases, in 2010 and 2017. Since then, no new offshore wind power projects have been constructed.

However, several offshore wind power projects are currently under development, although the market is still developing as a whole. The total capacity of the projects in different stages of planning is several thousand megawatts. However, the Finnish State has introduced auction systems for obtaining rights to offshore wind farm areas, thereby limiting the pace of simultaneous development of several areas by players themselves.

Actors developing offshore wind power in Finland include Tahkoluoto Offshore, Skyborn Renewables and Vattenfall. Also, the state-owned enterprise Metsähallitus carries out its own offshore wind development actions in Finnish territorial waters.

An offshore wind power project may be located in territorial waters or in Finland’s exclusive economic zone (EEZ). In the territorial waters, licensing follows more or less the same format as for an onshore wind power project. Please also see 6.1 Onshore Project Development.

In terms of territorial waters, an agreement on the use of the water areas must be drawn up with Metsähallitus. A zoning plan is also drawn up in offshore areas, and the municipality is responsible for the planning in the same way as on land. Geotechnical surveys in sea areas need a permit from the Defence Command of the Finnish Defence Forces. The cable lines of the Finnish Defence Forces must also be taken into account in an offshore wind power project. Unlike with onshore wind power, offshore wind power always also requires a permit under the Water Act.

Despite the location of an offshore wind power project in Finnish territory, an offshore wind power project may require a procedure according to the Convention on Environmental Impact Assessment in a Transboundary Context – ie, an assessment of environmental impacts across state borders.

The Finnish state-owned enterprise Metsähallitus governs almost all areas of territorial waters. Metsähallitus carries out pre-development activities in territorial waters to determine areas suitable for offshore wind power development, and applies its own market-based auction system for granting lease rights to these areas. The first auction was completed in 2022, whereby Vattenfall was granted the right to an offshore wind power area called Korsnäs. Since late 2023, Metsähallitus advanced a second auction round concerning two offshore wind farms called Ebba and Edith. However, in September 2025 Metsähallitus announced that these auction processes had been concluded without selecting a buyer for the projects, evidently due to a failure to reach final agreements concerning either project. Metsähallitus intends to auction out these two offshore wind farms, together with three more projects during the coming years.

Operations in the EEZ are governed by the Act on the Exclusive Economic Zone of Finland (1058/2024). As of 1 January 2025, wind power development in the Finnish EEZ is governed by a separate Act on Offshore Wind Energy in the Exclusive Economic Zone (937/2024). Based on the Act, rights to offshore wind power areas in the EEZ will be granted based on an auction process, and the winner of the auction process will be granted an exploitation right to the relevant area in the EEZ. The Finnish Energy Authority has been granted the authority to arrange the auctions. A Government Decree on Offshore Wind Power in the Exclusive Economic Zone is being prepared, and will set out more detailed regulation concerning the auction process. Despite the separate Act on Offshore Wind Energy in the Exclusive Economic Zone, the placing of cables serving an offshore wind power area in the EEZ will continue to be governed by the Act on the Exclusive Economic Zone of Finland.

Aside from the process of granting exploitation rights to the EEZ, the following pieces of legislation also apply as such in the EEZ:

• the Finnish Act on Environmental Impact Assessments;
• the Environmental Protection Act;
• the Water Act;
• the Waste Act;
• the Electricity Market Act;
• the Chemical Safety Act; and
• certain provisions of the Aviation Act.

However, currently most Finnish land use planning and building legislation is not directly applicable in the EEZ; as such, offshore wind power projects in the EEZ do not need a land use plan or a building permit.

Owing to the still developing nature of the offshore wind power sector, contractual structures and standards are also not yet established.

A cornerstone with respect to project financing of renewable energy projects is to ensure that the relevant rights to land and/or water areas, permits and key project documents are confirmed and/or entered into and will survive, through mortgages and step-in rights (for example) and enforcement should the lenders take control.

The legal framework regarding offshore projects located in territorial waters was unclear until the partial reform of the Finnish Code of Real Estate in late 2024. Among other amendments, said reform improved the status and financing possibilities of the offshore projects and confirmed the mortgageablity of offshore project areas in territorial waters, thereby confirming that lease rights in these areas can be used as security.

The framework for project financing in the EEZ remains partially unclear, as the legislation is still developing.

Subsidies

Finland has a number of subsidies and incentives from various sources that have been, and continue to be, used to encourage the production of electricity from renewable energy sources.

Since 2011, the main support programme for renewable energy has been the production subsidy system, also known as the feed-in tariff system, which is administered by the Finnish Energy Authority. This system was closed to new wind power plants in 2017, to biogas and wood-fired power plants in 2019, and to forest chip power plants in 2021. Additionally, seven wind farms were approved in 2019 on the basis of a tender procedure for a premium system, which is also administered by the Energy Authority. Projects approved under both the feed-in tariff and premium systems will receive support for a maximum of 12 years from the date on which the right to support begins. This means that support programmes are still in use but are coming to an end within the next few years. Finland has no plans for new production support schemes for renewable energy or new rounds of tenders under the premium system.

Business Finland (a public organisation acting under the Ministry of Economic Affairs and Employment of Finland) and the Ministry of Economic Affairs and Employment grant energy aid aimed at promoting investment and study projects related to renewable energy and energy efficiency that support Finland’s carbon neutrality goals. In addition to national aid, renewable energy companies operating in Finland can apply for various EU-based aid schemes.

Tax Incentives

Business Finland also grants tax credits for investments in energy production from renewable sources and energy storage projects that meet the eligibility criteria. The investment credit is 20% of the eligible costs. The maximum investment credit per company is EUR150 million (calculated on a group basis).

Demolition Permit

The decommissioning of a generation facility requires a demolition permit under the Building Act (751/2023) if the facility is located in an area of a detailed zoning plan or if a demolition permit is required by the master plan. However, a demolition permit is not needed if the building permit for the facility requires the demolition of the facility.

Demolition permits set out case-specific requirements by the building inspection authority concerning the demolition works, such as practical arrangements on the site and handling of demolition waste. In addition, demolition permits typically set out requirements for appointment of persons responsible for the works towards the authorities, as well as authority notification and inspection obligations.

Where a demolition permit is not required, the demolition of the facility requires a notice of demolition to the building supervision authority. The Building Act further requires that a building be demolished once it has been permanently taken out of use.

Other Decommissioning Obligations

If the facility owner holds the land area necessary for the facility based on a land lease agreement, the Land Lease Act (258/1966) sets out certain requirements for the land lease holder to restore the leased land at the expiry of the lease term. Also, land lease agreements may include more specific conditions for the demolition of a facility.

If the generation facility is subject to an environmental permit or an obligation to register the facility pursuant to the Environmental Protection Act (527/2014), the project owner is liable for investigating the impacts of its operations and for monitoring them after the decommissioning of a facility. Typically, environmental permits require the facility owner to prepare and follow a decommissioning plan, including monitoring measures.

Decommissioning Bonds

Building permits may include obligations to set a decommission security for the decommissioning of the facility. It is also becoming increasingly common for the property owner and the project owner to bilaterally agree on various decommissioning security arrangements.

According to the Finnish national energy and climate strategy, the current government of Prime Minister Petteri Orpo intends to make Finland one of the forerunners in clean energy and strengthen the investment climate. The government is committed to the applicable EU targets and to working towards a decrease in the nation’s climate footprint. In particular, the government has brought forward Finland’s possibilities for developing a significant hydrogen economy and advancing the storage and utilisation of carbon dioxide.

Currently, there are several legislative processes for new policies regarding renewable energy. For example, the Finnish government is preparing new legislation concerning a decommissioning obligation and decommissioning bond for wind power projects, bringing a number of new obligations for the decommissioning of wind turbines on a legislative level. In addition, the Finnish government is currently preparing a new hydrogen market act to follow in the footsteps of the Natural Gas Market Act (587/2017).

Judging by the contents and nature of legislative proposals put forward by the current government, the level of ambition appears to be lower than that of previous governments. Further, with the exception of potential grants for large demonstration projects, no state subsidies are expected to be introduced for the renewable energy sector in the near future, although the political intention is to enable and advance the transition towards increasing amounts of renewable energy.