As Finland rapidly expands its wind power capacity, a new study offers a timely rethink: where you put a wind farm matters not just for how much it generates, but how it affects prices, investors, and even the electricity grid.
Instead of clustering wind farms along the windy west coast, distributing them more evenly across the country could reduce price volatility, ease grid congestion, and actually earn investors more.
When Too Much Wind Is a Bad Thing
Finland is seeing a surge in wind energy. Installed onshore capacity jumped to 7.3 GW by mid-2024, with another 16 GW expected by 2030. Most of this growth is concentrated along the west coast, where wind conditions are strongest. But this centralisation is causing problems.
On windy days, so much electricity is generated at once that the market becomes flooded — pushing prices down, sometimes even below zero. This phenomenon, called price cannibalisation, eats into investor revenue and causes sharp swings in electricity prices for consumers. Worse still, the grid infrastructure struggles to move all that power from the coast to demand centres further inland, creating costly bottlenecks.
A Smarter Approach: Spread It Out
Using ERA5 global weather data and market data from Nord Pool, the researchers modelled the effect of building a 100 MW wind farm at 1000+ locations across Finland. The findings were striking:
- Revenue per MWh was highest in the southeast, where electricity is often more valuable due to lower existing wind generation.
- Societal benefit (in terms of electricity price reduction) was more evenly spread when new wind farms were located away from existing clusters.
- Cannibalisation losses were worst on the west coast, where new farms would most heavily overlap with existing ones.
Why It Matters for Finland — and Others
By planning future wind farms to complement, rather than compete with, existing ones, Finland can maximise both investor returns and consumer savings. The southeast in particular emerges as a win-win location: good wind conditions, less grid strain, and higher market prices.
The study’s method is also globally applicable. Any country with deregulated electricity markets and wind ambitions can use this model to better align new investments with long-term system stability.
Dispersing wind farms across a larger area isn’t just good meteorological sense — it’s a powerful economic strategy. As wind energy grows, so must our thinking about how to deploy it. Planning smarter today means a more stable, affordable and greener grid tomorrow.
And in a world where clean energy is both urgent and inevitable, insights like this help us make the transition not just faster, but fairer.
Source
Optimizing wind farm locations for revenue and reduced electricity costs in deregulated electricity markets, SSRN, 2025-04-28
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