19.11.2020 12:00
Current News, Electricity Market

Balance service fees to rise on 1 January 2021

Fingrid will increase balance service fees from 1 January 2021. The increase has been necessitated by the continued uncertainty in the market environment, which has caused costs to be higher than forecast and revenues to be lower than forecast.

The fees for balance responsible parties actual production and consumption will change as of 1 January 2021, increasing the current consumption fee to EUR 0.41/MWh (currently EUR 0.35/MWh) and the production fee to EUR 0.26/MWh (currently EUR 0.22/MWh). The increase is approximately 17 per cent. Other balance service fees will remain unchanged.

In the current market environment, the costs of the balance service have been higher and revenues lower than budgeted. The background factors are the continued disparities in area and imbalance power prices, as well as the surpluses of balance responsible parties between Finland and the other Nordic countries, and the costs thereby arising. Other reasons include electricity consumption and production being lower than forecast, lower revenues from fees, and the prolonged flooding, which caused higher reserve costs than expected.

Changes in market conditions will occur more frequently as the energy revolution progresses, resulting in significant fluctuations in costs. At the beginning of this year, Fingrid switched to quarterly fee reviews to ensure that the costs of balance services are more consistent with the fees charged for them.

Further information:

Jani Piipponen, Development Manager, Fingrid, tel. +358 30 395 4186

 

The production and consumption fees are used to cover the reserve and imbalance costs allocated to balance services. The reserve costs include the total costs of the frequency containment reserve for normal operation and the automatic frequency restoration reserve. Additionally, the reserve costs include 10 per cent of the costs of the frequency-controlled disturbance reserve and the fast disturbance reserve. The remainder of the fees is part of the grid service fee.

The impact of the increase on end-consumers is 30 cents per year (using the example of a household user consuming 5,000 kWh per year).