Balance service fees of balance responsible parties to rise in July
Fingrid will increase balance service fees from the beginning of July. Reasons for the increase include, for example, rises in the imbalance and reserve costs covered by the balance service fees as well as lower-than-expected consumption and production early in the year.
The fees for actual production and consumption will change as of 1 July 2020, increasing the current consumption fee to EUR 0.35/MWh (currently EUR 0.27/MWh) and the production fee to EUR 0.22/MWh (currently EUR 0.17/MWh). The average increase is 30 %. Other balance service fees will remain unchanged.
The reason for the increase is the exceptional market situation at the beginning of the year. The costs of balance service have been higher and revenues lower than budgeted. The reasons include, for example, large price differences in area price and imbalance power combined with the surplus of balance responsible parties between Finland and other Nordic countries, lower-than-expected electricity consumption and production, lower revenues from fees and higher-than-expected reserve costs. The increase will also cover balance service losses from 2019.
Changes in market conditions are expected to increase as the energy revolution progresses, causing significant fluctuations in costs. To respond to this, Fingrid is switching to quarterly fee reviews this year.
The production and consumption fees are used to cover the reserve and imbalance costs allocated to balance service. The reserve costs include the total costs of Frequency Containment Reserve for Normal Operation and automatic Frequency Restoration Reserve. Additionally, the reserve costs include 10 % of the costs of Frequency Containment Reserve for Disturbances and Fast Disturbance Reserves. The imbalance costs include 50% of the costs that are caused by the imbalances between Finland and the other Nordic countries.
Jani Piipponen, Development Manager, Fingrid, tel. +358 30 395 4186