Fingrid proposes reforms to the structure of grid service fees

-The new model facilitates new connections and encourages regional balance

Fingrid proposes reforms to the grid service fees it collects from its customers. The reform applies to both the connection fees of new customers and the grid service fees.

In the proposed fee reform, the structure of the connection fee would be changed so that in addition to the current direct grid connection fee, a regional power-based tariff for connections would be introduced. The intention is to create financial incentives for new connections to be located optimally in terms of the operation of the main grid and to increase new customers’ share of fees linked to the grid reinforcement needs caused by their connections, in accordance with the cause-and-effect principle. In practice, the model would mean an additional fee if new production were connected to a production-dominated area or more consumption to a consumption-dominated area. A regionally balanced network in terms of consumption and production reduces the need for grid investments and contributes to Finland remaining as a single bidding area.

Another proposed reform is the introduction of a flexible grid service. The new model would be intended for both current and new customers who have the possibility to support the management of grid transmission through flexibility in predetermined situations. According to the model, customers would be compensated for their flexibility in the form of a fixed refund, which is tied to the customer’s consumption fee or power-based tariff. The flexible main grid service is a good model for, for example, electric boilers, which have quickly gained ground.

As a third reform, Fingrid proposes introducing flexible connections as a permanent solution. Flexible connections are also currently in use as a solution where the party connecting to the grid temporarily agrees to connection restrictions in local fault or overload situations in order to make connecting possible on an accelerated schedule. Customers have not received separate financial compensation for this. In the new proposal, this temporary solution can be made permanent, and the customer will be financially compensated for it.

Furthermore, Fingrid has prepared a power-based tariff to be collected from grid energy storage facilities, which is comparable to power plants’ power-based tariff. Up until now, there have been few grid energy storage facilities, but projects are clearly on the rise both in number and size.

The adequacy of the grid must be guaranteed in the rapid transform of the electricity system

The reform is necessary due to the rapid changes in the electricity system and the growing needs of managing transmissions in the main grid. Now and even more so in the future, the volume of electricity being transmitted over ever-increasing distances in the grid is growing as the renewable electricity production stemming from the green transition is located further away from electricity consumption than the outgoing combustion-based production has been. At the same time, the management of grid transmission is much more complicated than before.

In addition to strengthening the grid, several different means are needed to ensure the adequacy of the electricity network and transmission capacity in the future as well. The means proposed in the fee reform are intended to improve the connectivity of new projects and to improve the use of the grid. A cost-effective and efficient grid enables investments and contributes to Finland’s competitiveness in the green transition.

Read more about the reform and proposals in Fingrid’s publication Proposals for changes to the structure of grid fees.

Fingrid is consulting its stakeholders on the proposed reforms until 31 August 2024.

Further information

Laura Ihamäki, Fingrid Oyj, puh. 030 395 5166 tai

Petri Parviainen, Fingrid Oyj, puh. 030 395 5282

Email addresses firstname.lastname@fingrid.fi