Electricity market

The transformation of the power system calls for major changes in the current structures of the electricity markets. The inflexibility and increasing unpredictability of production must in the future be balanced by more extensive demand-side management and expanding electricity markets. In terms of demand-side management, Finland is a forerunner in Europe. Fingrid is currently carrying out several projects to increase the flexibility of the electricity markets and to enable the participation of consumers and the producers of intermittently available renewables. One example of this is the transition to a 15-minute imbalance settlement period.

The wholesale prices of electricity were clearly on a higher level in 2018 compared with previous years in Nordic countries. The annual average price was at its highest level since 2011 for both the Nordic system price and the Finnish area price. The drivers behind the higher prices include, above all, the increased prices of emission rights and fuels, as well as the lower than normal precipitation affecting hydropower production in the Nordic production areas.

Electricity market

2018

2017

2016

Day-ahead system price €/MWh

43.99

29.41

26.91

Area price Finland, average €/MWh

46.8

33.19

32.45

Congestion income in Nordic countries, €M

281.98

265.8

276.8

Congestion income between Finland and Sweden, €M

56.47

50.98

74.98

Congestion hours between Finland and Sweden %

20.6

24.0

32.7

Congestion income between Finland and Estonia, million €M

2.79

0.52

4.4

Congestion hours between Finland and Estonia %

5.4

1.4

9.7

Net electricity imports to Finland diminished slightly from the previous year, yet remained at a high level. More than a fifth of the electricity consumed in Finland was imported. Imports from Sweden shrunk, while imports from Russia grew.

Nordic balance settlement project

In March, the TSOs signed a co-operation agreement on developing the new Nordic balancing concept. The agreement establishes a commitment between the five Nordic TSOs to follow a joint roadmap for implementing the new balancing concept and a joint balancing market.

The Nordic agreement on joint imbalance settlement will help to keep Finland closely aligned with the Nordic power market also in future.

European intraday markets

The European intraday markets started up in June 2018. They enable more extensive European electricity markets for continuous trading. The Cross-Border Intraday (XBID) project created a European intraday marketplace for continuous trading. Along with XBID comes a Shared Order Book (SOB) which makes it possible to merge bids left through various exchanges and enables more extensive intraday markets.

The introduction of intraday markets was realised through 10 local implementation projects. The joint market currently includes Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, the Netherlands, Norway, Portugal, Spain and Sweden. Regional expansion of the new marketplace will make trading possible throughout Europe.

Smart grids within consumers’ reach

The Ministry of Economic Affairs and Employment’s smart grid working group was wrapped up after two years of solid work. The working group’s task was to present concrete measures for promoting customers’ participation opportunities and for improving transmission reliability in a power system based on clean energy generation. The working group’s final report describes the possibilities of a smart power system and makes several proposals to develop the electricity market.

The working group has an ambitious schedule for the implementation of the proposals, and most of the changes are scheduled to be implemented between 2019 and 2021. Some of the working group’s suggestions rely on the completion of the centralised data exchange solution, the Datahub.

These policies are a good start towards customer-focused and real-time power markets. Finland must ambitiously invest in launching decentralised resources in the markets, also in the future.  Further development areas include new marketplaces for decentralised flexibility, promoting new energy-related technologies, and making electricity, heat and gas systems compatible. Finland is in a position to lead the way both regionally and within the EU.

Datahub

The Datahub is a centralised information exchange system for retail markets that stores data from all of Finland’s 3.5 million places of electricity consumption. Fingrid Datahub Oy selected the supplier for the Datahub system in June. The Finnish government presented a proposal to the parliament in September on amending the Finnish Electricity Market Act and certain related acts. The Datahub will go live in 2021.

The Datahub will compile data from all Finnish electricity consumers. The system will simplify, speed up and enhance the efficiency of the data exchange required by the retail electricity market. The information contained in the Datahub will be used by approximately 100 electricity suppliers and over 80 distribution network companies serving electricity consumers.

Building the system is a laborious reform for Fingrid and the whole sector. The system will boost the consumer market and bring new opportunities to the electricity market. The Datahub holds a key role in the electricity market’s shift from the current one-hour trading period to a fifteen-minute period.

The project has been carried out as a close collaborative effort between various stakeholders. The centralised information exchange model will make business processes more efficient and enable new ways of developing the exchange of information. The rules will become simpler and the quality of information will improve. In future, it will be possible to examine data and utilise it for a number of purposes.

What happens in the Datahub?

The Datahub is a system for managing data exchange in the electricity retail markets when electricity consumers change their electricity supplier or move to a new address.

The Datahub will handle the imbalance settlement and balance error correction process that is currently handled by the distribution system operator.

End customers will have the opportunity to authorise other service providers to retrieve their electricity consumption data from the Datahub, for example, in consumption monitoring services. 

The Datahub speeds up, simplifies, improves and boosts the efficiency of the operations of all parties involved.

The Datahub’s business processes help ensure that data is transmitted reliably and securely between the parties. 

This is the Datahub

Key events of 2018

Fingrid helps to build a flexibility market platform

Finland joins the 15-minute imbalance settlement period

Electricity market video simplifies complexity