First step in Europe - direct exchange trade adopted partially in electricity trade between Russia and Finland

A new trading scheme, so-called direct exchange trade, will be adopted in electricity trade from Russia to Finland on 15 August 2011. Direct exchange trade is a first step towards more market-focused procedures in electricity trade between Russia and Finland and at the same time between Russia and the EU.

An electricity market player engaged in direct exchange trade buys electricity in the electricity exchange in Russia and sells it directly to the Nordic electricity exchange Nord Pool Spot. If all of the offered electricity cannot be sold to the spot market, the player can also trade in the secondary market, in other words in Nord Pool Spot’s or the Russian intra-day market.

Before the new trading scheme, all electricity trade between Russia and Finland has been bilateral trade between the seller and buyer. Its daily volume has not been defined on the basis of the situation prevailing in the Russian and Finnish electricity market, but it has been specified in advance before exchange trading.

Direct exchange trade is a step towards more market-focused rules in electricity trade between Russia and Finland. It intensifies the market mechanisms, renders trading more dependent on the market prices, and increases the transparency of trading. The new trading scheme also offers new perspectives to the discussion between the EU and Russia on the means through which the electricity markets in the two regions can work together.

In the early stages of the new procedure, which will last at least until the end of 2011, the volume of direct trading is relatively small, at the most 100 MW, while in conventional bilateral trade it is 1,200 MW. So far, trading is only available from Russia to Finland. The goal is develop trading so that it works in both directions between Finland and Russia.

The Finnish transmission system operator Fingrid provides electricity market parties with electricity transmission facilities from Russia to Finland. One of Fingrid’s basic duties is to promote the electricity market.

Further information:
Corporate Adviser Risto Lindroos, tel. +358 30 395 5139
Customership Manager Jarno Sederlund, tel. +358 30 395 4251