Fingrid making preparations for connecting 2,000 MW of wind power to the Finnish grid

Fingrid's capital expenditure will total 1,600 million euros in the next 10 years. Fingrid has studied the impacts of additional wind power production on the Finnish electricity transmission grid. According to the analyses, 2,000 megawatts (MW) of geographically decentralised wind power capacity can be added to the Finnish power system. However, this will call for further capital expenditure in the grid. Fingrid is making capital investments totalling 1,600 million euros in the transmission grid and reserve power in the next 10 years. This will enable the connection of one large nuclear power unit and 2,000 MW of wind power capacity to the Finnish grid by 2020.Fingrid's President & CEO Jukka Ruusunen discussed the company's future challenges in Fingrid's Grid Day today. The Finnish transmission grid is influenced by factors such as the Finnish climate and energy strategy, new large nuclear power units, increased use of renewable energy sources, European electricity market, and expanding the market area to Western Europe, the Baltic countries and Russia.

"We are prepared for changes, and we contribute to protecting the climate by implementing an extensive capital expenditure programme of 1,600 million euros. Opening of the electricity market, ageing of the transmission grid, and increased use of nuclear power and wind power are factors that call for the reinforcement of the Finnish grid. We are prepared to connect 2,000 MW of geographically decentralised wind power to the grid by 2020," Jukka Ruusunen stated in the press conference of the Grid Day. There are plans for several wind power projects in Finland at the moment. According to Jukka Ruusunen, the wind power units can be connected to the transmission grid using basically the same logic as for other types of power plants.
"The power system must always withstand the tripping of the largest power plant from electricity production. On the other hand, wind power production increases the need for regulating power," Jukka Ruusunen said.

Fingrid has examined the impacts of increased wind power production from three points of view: from the aspects of system security, sufficiency of transmission capacity, and electricity market.

From the viewpoint of system security, wind variation within one hour causes a power change which is estimated to represent one quarter of the nominal power of wind power. Hence, 2,000 MW of wind power requires preparations for a power change of 500 MW.
"This can be managed through existing reserve capacity. Large-scale changes only take place rarely, and the change in wind power can be compared to other types of production disturbances. However, more than 2,000 MW of wind power would call for significant additional investments in reserve power and regulating power," Jukka Ruusunen stated.

A sudden and extensive stoppage of wind power production may increase the need for reserves, but Fingrid has already made decisions to raise the reserve power capacity by 100-400 MW.

However, increased wind power production will inevitably raise the need for regulating power.
"You cannot store electricity. Since electricity consumption varies constantly, regulating power is also needed. Only condensing power plants and hydropower enable adjustable electricity production. One new means could be increasingly active flexibility applied to electricity consumption during consumption peaks. Demand flexibility is currently being examined together with consumers," Jukka Ruusunen said.

From the point of view of transmission capacity, wind power production and its variation add to the need for electricity transmission in the Finnish grid and on cross-border transmission connections. This translates into a need to construct new transmission lines. In Finland, the grid in Ostrobothnia in Western Finland needs to be upgraded to the 400 kilovolt voltage level. Moreover, a third alternating current line is needed between Finland and Sweden to equalise production variations and to utilise the regulating capacity and reserve capacity within the entire market area.

From the viewpoint of the electricity market, Fingrid considers that the proper functioning of the market requires equal treatment of various forms of electricity production. Producers of wind power must pay their own connection costs and take care of the sales of their electricity and of balancing their production balance.  Moderate price increases Despite the extensive capital expenditure programme, Fingrid intends to retain its internationally competitive transmission tariffs. The capital investments will inevitably elevate the grid transmission prices of electricity somewhat. At the beginning of this year, Fingrid raised its tariffs by 4.5 per cent.

"However, Fingrid accounts for a very small portion of the consumer price of electricity, which is why the rise in the transmission prices will not be reflected very clearly in the consumer's electricity bill," Jukka Ruusunen pointed out.

In addition to the capital investments, pressures to raise the tariffs are caused by a general increase in the cost level and higher price of electricity.
"Purchases of loss energy constitute our biggest individual expense item. We consume as much electricity as a large Finnish town." Further information:
Jukka Ruusunen, President & CEO, tel. +358 (0)40 593 8428