The electricity system is expanding and becoming more challenging to manage – Fingrid to raise grid service fees at the start of the year
25 September 2024 - 3:00PM
UK Regulatory
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. +358
30 395 5118
Jukka Metsälä, CFO, Fingrid Oyj, tel. +358 40 563 3756
The emails are in the format firstname.lastname@fingrid.fi
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