Some energy loss occurs in electricity transmission. Grid losses mainly consist of the loss of heat from power lines and, in certain weather conditions, so-called corona power losses on the conductor surface.
The volume of grid losses equals 1.2–1.4 TWh per year, which accounts for approximately 1.5 per cent of Finland’s electricity consumption. The dissipation power varies between 80 MW and 350 MW depending on the grid’s transmission situation, electricity consumption and the volume of corona power losses.
Fingrid’s annual loss power costs are estimated at EUR 50 million depending on the market price of electricity.
Fingrid hedges against loss power price risks well ahead of time. Purchases are fully hedged in advance on the financial markets. Hedging is based on the predicted volume of loss power.
Price and area price hedging
Price hedging is begun three to four years before the delivery year. Hedging is implemented by purchasing agreed products so that the purchase for the delivery year is fully hedged by the end of September of the year preceding the delivery year. During the delivery year, hedging is adjusted based on forecasts. Price hedging is carried out based on the system price.
Area price hedging is begun 2.5 years prior to the delivery year at the earliest and hedging should be begun two years before the delivery year. Hedging is implemented so that the purchase for the delivery year is fully hedged by the end of September of the year preceding the delivery year. No changes are made to the area price hedging after the end of the September preceding the delivery year, except in exceptional situations.
The implementation of price hedging and area price hedging has been assigned to an external portfolio manager subject to public bidding. Fingrid does not carry out hedging directly on the stock exchange or with market parties. The portfolio manager carries out hedging according to the instructions provided by Fingrid in advance. Fingrid does not take a stand, at any point, on the details of how the hedging is carried out.