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Getting the Deal Through: Electricity Regulations, Finland 

January, 2015 - Katri Joenpolvi, Ville Hailikari and Mikko Pirttilä

Policy & Law: What is the government policy and legislative framework for the electricity sector? Securing energy supply, competitive energy prices and meeting the European Union’s common energy and climate goals are core elements of policy in the Finnish electricity sector. Finland’s policy in the electricity sector has focused on gradual liberalisation of the market, increasing the efficiency of operations and to integrate Finland’s electricity market into the Nordic and wider European markets. Security of supply and competitive electricity prices have traditionally been viewed as important goals. Finland aims to reach self-sufficiency in electricity production in the 2020s, when the new nuclear power plant units under construction are planned to start operating.


Finland’s Nordic climate, geographically isolated location, comparatively high consumption of electricity and the goal of promoting renewable energy have all played important roles in the electricity sector. Legislation relating to the electricity sector is included mainly in the new Electricity Market Act (588/2013, EMA) and the Decrees and Orders in force issued based on it and the previous Act. The EMA, which entered into force on 1 September 2013, repealed the old Electricity Market Act and implemented EU’s third Energy Package, most importantly Directive 2009/72/EC concerning common rules for the internal market in electricity. In addition, the new EMA contained numerous national amendments especially relating to distribution network operations.


Other important national statutes in the electricity sector are the Electricity and Natural Gas Market Supervision Act (590/2013), the Act on the Promotion of Electricity from Renewable Sources (1396/2010) and the Competition Act (948/2011), among others. As Finland is a European Union member state, EU legislation such as REMIT (Regulation on wholesale energy market integrity and transparency, EU Regulation No. 1227/2011) is directly applicable.


2 Organisation of the market: What is the organisational structure for the generation, transmission, distribution and sale of power?


The main sources of electricity are nuclear power (amounting to approximately 27 per cent of electricity generated in total in 2013), hydropower (15 per cent) and biofuels (nearly 13 per cent). Electricity is also generated using coal, natural gas, waste fuels, peat and wind power. Over 60 per cent is generated using carbon-free energy sources. Electricity consumption in 2013 amounted to 83.9TWh, while the total amount of electricity generation was 68.2TWh, meaning that approximately 19 per cent of the electricity consumed was imported. A major part of the wholesale trade in electricity takes place in the Nord Pool Spot power exchange, whose Elspot (day-ahead) and Elbas (intraday) markets set the market price for electricity in the Nordic countries. In addition, electricity is traded on the over-the-counter market and directly between buyers and sellers. 

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