The main grid’s transmission lines are mostly located in privately owned forests, and Fingrid expropriates the right to use this land.
Compensation is determined by the land’s market value, as calculated by the National Land Survey of Finland on the basis of tree stand sales and the value of the growing timber.
“Although ‘market value’ is a new term in Finland’s expropriation legislation, in practice it means the same as the previously used term ‘fair value’. It’s therefore just a case of updating a 1970s term,” says Mauri Asmundela, Director of Expropriation and Valuation at the National Land Survey of Finland.
The 25 per cent increase was introduced to ensure that landowners won’t lose out.
The amendment will also grant landowners an additional 25 per cent compensation on top of the market value.
“Determining property values is always a little imprecise, so the 25 per cent increase was introduced to ensure that landowners won’t lose out,” says Senior Ministerial Adviser Jari Salila from the Ministry of Justice.
Legistlative amendment arises from discontent
The Ministry of Justice spent ten years preparing legislative amendments to the compensation criteria for expropriation.
“Landowners had been unhappy with the compensation for expropriation. The compensation paid for land expropriated for transmission lines was also considered inadequate,” says Salila.
Growing investments in the energy sector, and especially the construction of transmission lines from wind farms to the main grid, put the government under greater pressure to make changes.
“As a large number of landowners are affected by expropriation, it created the political will to improve their position, that is, to increase the compensation payable in these situations,” says Asmundela.
The previous government proposed a 15 per cent increase in compensation for expropriation, but the bill did not make it to Parliament.
“Based on the information available during the preparatory stage, a 25 per cent increase was deemed sufficient to address any inaccuracies in market value assessments,” says Salila.
The value of land is always assessed on a case-by-case basis.
It has been publicly suggested that compensation for transmission line expropriation should be based on the wind farm’s ground rent. On the basis of court rulings on compensation, Asmundela does not see any justification for such a systematic increase in the market value.
“The fact that some power generating facilities have higher rent levels than the yield from a forest does not mean that all Finnish woodland is worth the same. The value of land is always assessed on a case-by-case basis,” says Asmundela.
Fingrid pays what the law dictates
Fingrid has a neutral opinion of the legislative amendment, even though it will have to pay 25 per cent higher compensation in the future.
“The transmission system operator has a public function to ensure the security and functionality of Finland’s electricity system. Fingrid believes that it is up to society to determine the level of compensation. Increased compensation will definitely streamline transmission line projects,” says Mikko Kuoppala, Senior Expert at Fingrid.
Fingrid puts out a competitive tender for any timber that needs to be removed for a transmission line project.
“Our aim is to make a separate agreement with forest owners for the sale of their growing timber, and the forest owners will then receive a competitive price for the timber on the basis of that agreement. Fingrid has already been paying a 25 per cent higher purchase price for timber since early summer,” says Kuoppala.
Other matters involving expropriation will remain unchanged at Fingrid: The National Land Survey of Finland will continue to provide compensation calculations and, whenever possible, will also obtain the landowners’ bank account numbers for making payments. Fingrid adds the statutory interest rate of six per cent to the calculations.
By signing this agreement, landowners agree to the installation of the transmission line on their property.
As an additional ‘carrot’, Fingrid offers landowners a preliminary expropriation agreement that pays a special compensation rate of ten per cent.
“By signing this agreement, landowners agree to the installation of the transmission line on their property, and most landowners do,” says Kuoppala.
Greater freedom of contract
As a result of the amendment, the expropriation committee will no longer examine the reasonableness of agreements between landowners and expropriators.
The amendment therefore places more responsibility on the contractual parties to understand what they are agreeing to.
“The expropriation committee used to ensure that landowners did not make bad deals for themselves, but these deals are no longer examined separately. So landowners can inadvertently do themselves a disservice,” says Asmundela.
However, he adds that with Fingrid as the other party, landowners can be confident that the expropriation agreement will be fair, as they are dealing with a professional operator.
“It’s unlikely that an expropriator will be seeking to act unfairly on purpose, but these are complex matters and not every party will be sufficiently familiar with all the ins and outs of expropriation,” says Asmundela.
The legislative amendment entered into force on 1 August 2025, and will impact all expropriations that are already being processed by the National Land Survey of Finland. Around 800 cases will be reviewed and have their market values increased by 25 per cent.
