Electricity market

The average market price of spot electricity on the electricity exchange (system price) was EUR 29.41 (26.91) per megawatt hour. The rise in wholesale prices of electricity that started in summer 2016 levelled out in 2017. In Finland, prices on the Finnish wholesale market were higher than they were in other Nordic countries. However, the price differences and thus the congestion income decreased from the previous year as a result of a general increase in prices. 

Fingrid accrued EUR 25.5 (37.5) million in congestion income from the cross-border power lines between Finland and Sweden. EUR 10.5 (29.9) million of this was accrued during the first half of the year and EUR 15.1 (7.6) million during the second half of the year. The difference in Finland’s and Sweden’s area prices narrowed due to a general increase in the price of electricity, which also reduced the number of congestion hours. The links between Finland and Estonia generated EUR 0.3 (2.4) million in congestion income. In accordance with the regulation on congestion income, Fingrid has used the congestion income it received in 2017 for the Hirvisuo–Pyhänselkä grid investment project, which supports the transmission of electricity from northern Sweden to southern Finland. 

Imports From Russia remained at the 2016 level. Hourly import volumes from Russia vary considerably. Russia’s capacity mechanism, in particular, has reduced electricity trade. 

The energy system and with it the power system are in the midst of a major transformation aiming for a clean power system of the future. The ultimate goal of the transformation is to mitigate and combat climate change. The clean power system of the future must be supported by strong transmission connections and revamped market rules. 

In spring 2017, Fingrid published an action plan titled “Our Shared Journey – a roadmap towards achieving a green power system”. It contains initiatives and measures and ongoing projects to develop the markets. The Ministry of Economic Affairs and Employment’s (MEAE) smart grid working group published in late 2017 an half-year report that seeks solutions to accomplish the energy shift by means of a smart power system. Fingrid has been actively involved in the working group’s activities. A smart power system will increase the capabilities to balance production and consumption and thereby enable the increasing use of clean energy. 

Fingrid is building a solution for centralised information exchange to promote the functioning of retail markets, a so-called datahub, through its subsidiary Fingrid Datahub Oy. Once accomplished, this will enable nearly real-time processes when changing suppliers and at the same time provide electricity sellers with better conditions for serving their customers. 

The European electricity market is introducing a shorter, 15-minute trade period. The relevant legislation, which came into force in December 2017, requires the introduction of a 15-minute trade period by the end of 2020, unless the roll-out is postponed by a decision by the authorities. Fingrid launched an imbalance settlement project for the 15-minute period to support the planning of the transition. 

Nordic co-operation has been overshadowed by a dispute between the transmission system operators over the development and future model of imbalance settlement. However, Nordic transmission system operators have continued negotiations to reach an understanding on the future imbalance settlement model and the related decision-making.

Electricity market Jan-Dec/17 Jan-Dec/16 July-Dec/17 July-Dec/16
Nord Pool system price, average €/MWh 29.41 26.91 29.54 29.83
Area price Finland, average €/MWh 33.19 32.45 34.44 34.55
Congestion income between Finland and Sweden, € million* 51.0 75.0 30.1 15.2
Congestion hours between Finland and Sweden %** 24.0 32.7 26.6 19.3
Congestion income between Finland and Estonia, € million* 0.5 4.7 0.2 0.2
Congestion hours between Finland and Estonia % 1.4 9.7 1.4 1.7