The electricity system is expanding and becoming more challenging to manage – Fingrid to raise grid service fees at the start of the year

    The electricity system is expanding and becoming more challenging to manage – Fingrid to raise grid service fees at the start of the year

Stock exchange release 25 September 2024

The transmission system operator Fingrid will raise its fees for grid services by eight per cent from the start of 2025. The increase is necessitated by investments in the main grid and the growing costs of managing the electricity system.

The pricing of Fingrid’s services follows the cost development of its operations and the reasonable profit set by the regulatory model for the operations over time. The costs of Fingrid’s operations have increased significantly in recent years. However, the income from grid service fees has not grown in proportion with the costs as they accumulate largely from electricity consumption. We have connected close to 10,000 MW of emission-free production to the grid, which has lowered the price of electricity.

The growing costs are a result of a major investment programme to meet the main grid’s customer needs, enabling the achievement of climate targets using clean electricity. The development of the main grid has contributed to the recent advances in Finland’s electricity system, as a result of which the country had one of Europe’s lowest electricity prices last year and climate emissions from electricity production have fallen dramatically.

This development not only requires investments, but also sets even higher demands on the power system’s maintenance and the securing of the electricity supply. The geographical segregation of electricity consumption and production adds to the transmission need and transmission losses. The shift in the electricity system increases the need for power system reserves and solutions that ensure the smooth management of changes and disturbances in the grid.

In real terms, main grid tariffs have fallen. Previously, the fees were raised two per cent in 2022, while in 2019 Fingrid reduced its grid service fees by eight per cent. Fingrid has used the exceptionally large congestion income, resulting from the energy crisis, to cover the growing costs and, at the same time, has waived the fees. Fingrid’s goal is to actively use the accumulated congestion income for the benefit of its customers also in the future, investing in cross-border connections and compensating for the need to increase grid service fees. However, Fingrid does not decide on the use of the congestion income or control its accrual. By default, the tariff level must be sufficient to cover the costs of operations.

Raising the main grid tariffs has a moderate impact on the price of households’ electricity. The total price of electricity consists of three parts: the price of electrical energy, electricity transmission and taxes. The share of electrical energy of the final amount is some 40 per cent, the share of electricity transmission is some 30 per cent and taxes make up around 30 per cent. The main grid makes up approximately two to three per cent of the total price.

Further information:

Jussi Jyrinsalo, Senior Vice President, Fingrid Oyj, tel. [phone]
Jukka Metsälä, CFO, Fingrid Oyj, tel. [phone]

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