Dynamic cross-border transmission service fee
A dynamic cross-border transmission service fee introduced to cross-border electricity trade between Finland and Russia on 1st of June 2015.
The dynamic fee is based on the price difference between the Finnish area price and the regional price in North-West Russia. Fixed transmission fees hampered cross-border electricity trade during small area price differences, when the fee has exceeded the price difference. The new dynamic fee becomes smaller as the price difference decreases and larger when the price difference increases. The objective of the new fee is to decrease the dead-band when the fee hampers the profitability of the cross-border trade.
In Russia, a capacity payment fee is set for consumption during morning and afternoon peak hours. The payment is directed to producers and it ensures resource adequacy of peak demand. Like consumption, export is subjected to the payment fee as well. More information about the capacity payment can be found here.
The fee for import is calculated as follows:
pt,fi = Finnish area price at the given hour t, published by Nord Pool Spot.
Pdailypeak(t) = Daily peak export during the peak hours of the capacity day related to hour t MWh/h, maximum of confirmed trade.
Pcap = Annual forecast of monthly capacity price in the Leningrad region, published by Russian market operator ATS, RU/MWh. In the flow direction from Finland to Russia, pcap is equal to zero.
MDCap = Seasonal coefficient of monthly capacity price, published by ATS.
hcap = Planned peak hours, a monthly number published by the Russian System Operator in the previous year.
K = Parameter having a value of either 0 or 1.
Pt ,ru = The FreeFlowZone27 region spot electricity price (buy), published by the Russian market operator ATS. Free Flow Zones are areas in Russia, divided according to transmission capacity. In case the Leningrad region spot price will become into the public domain, it will be used instead of the FreeFlowZone27 region spot electricity price.
ExcRate(t) = The European Central Bank daily exchange rate of €/RUB of the previous day to the NPS commercial day published by 15:00 CET at ECB website applied for all hours of NPS commercial day. If the exchange rate is not available, the latest published rate will be used.
t = Variable describing a specific hour of the month.
caphours = All the planned peak hours of the month defined by the System Operator Of the United Power System.
noncaphours = All the hours of the invoiced month excluding the caphours.
Knoncap = Adjustable coefficient for off-peak hours. Coefficient value may be different for import and export directions.
Kcap = Adjustable coefficient for peak hours. Coefficient value may be different for import and export directions.
Flow(t) = The cross-border trade of the Customer confirmed by Fingrid to given hour in MWh/h. Flow(t) is always a positive figure.
Coefficients starting from 1.4.2017:
Knoncap = 0.32
Kcap = 0.1
K = 1
Export fee is calculated similarly except that the price difference is calculated to the other direction than displayed in the formula.
As part of the dynamic fee, the Inter TSO(ITC) compensation fee will be charged. ITC fee is a fee used for electricity trade between EU internal electricity market and third countries. The fee is based on EU regulation no 838/2010 Annex Part A section 7. The ITC fee for 2017 is provisionally 0,60 €/MWh and it will be confirmed in March 2017.
If the dynamic fee is less than the ITC fee, only ITC fee will be charged.
An example of dynamic fee calculation can be found here.