CORPORATE MAGAZINE | FINGRID OYJ | 1/ 2015 | ELECTRICITY MARKET

Schoolchildren IN THE II COMMUNITY KNOW ALL ABOUT ENERGY SAVING, P. 22 Why is electricity more expensive IN FINLAND THAN IN OTHER NORDIC COUNTRIES? P. 4 Changes in energy production REQUIRE POLITICAL DISCUSSION, P. 8 Finland’s largest cluster of wind farms is under construction in Ii. Read more on IN THIS ISSUE pages 14 and 22. One market, many prices | Finns pay more for wholesale 4 electricity than people in other Nordic countries do. What’s causing the difference in price?

A new energy palette – how can we increase power system 8 flexibility? | In coming years, Finland will be increasingly dependent on imported electricity. As the structure of energy production changes, we need politicial discussion to focus on how to increase the demand required by the power system. 11 Guest column | Quo vadis, Nordic power cooperation? Corporate Magazine Fingrid Oyj 12 Work never stops in market development | Mikko Heikkilä has a 18th volume front row seat to monitor the expansion of the electricity markets. 1/2015 13 Know the terms | Network codes EDITORIAL STAFF Telephone: +358 (0)30 395 5267 Wind power as a target for investment | Investment company Fax: +358 (0)30 395 5196 14 Taaleritehdas is constructing several wind turbines all over Postal address: P.O.Box 530, FI-00101 Helsinki Finland. Street address: Läkkisepäntie 21, FI-00620 Helsinki Editor-in-chief: Marjaana Kivioja 16 Finextra’s guarantee of origin register began operations at the E-mail: marjaana.kivioja@fingrid.fi start of the year Editorial board: Mikko Heikkilä, Mikko Jalonen, Jonne Jäppinen, Reija Kuronen, Pia Ojala, Jarno The Advisory Committee is a link between Fingrid and its 18 customers | Jussi Laitinen from Tampereen Sähkölaitos is the Sederlund, Tiina Seppänen new Chair of the Advisory Committee. Design by: Better Business Office Oy English translation by: Demand-side management is worthwhile | A frozen warehouse Mester Translation House Ltd 20 provides demand-side management for the electricity markets. Published by 22 The municipality of Ii has chosen renewable, local energy| Ii Fingrid Oyj community residents say yes to geothermal heating, electric cars www.fingrid.fi and renewable, local energy. White storks cause disturbances on the Estonian grid network | Change of address: 25 Conditions in Finland are not favourable for white storks to nest in. reija.kuronen@fingrid.fi Europe’s lights stay on despite eclipse | Continental Europe’s Cover photograph: Pupils Matias Pakanen, Lotta 26 power system functioned without disturbance through the solar Järvenpää, Valtteri Nevalainen, Kasper Eriksson, eclipse. Helga Annala and Tuukka Kyllönen from the Ojakylä school in the Ii community know to turn off 27 In brief unnecessary lights. Read more on pages 22–24. Photograph by: Mikko Törmänen 30 Weathering the climate | The non-winter Printed by: Libris Oy, Helsinki ISSN-L: 1456-2693 Grid Quiz ISSN: 1456-2693 (Print) 31 ISSN: 2242-5985 (Online) FROM ENERGY POLITICS TO POWER POLITICS

ne got the impression from recent general elec- opment and investment. The electricity markets would be tion debates in Finland that parties and their given a new lease of life, and other necessary production candidates have quite a simplistic impression of would be kept on the markets. However, this does not seem energy policies and related challenges. For most, like an easy feat from a political perspective, at least not on it’s simply a matter of choosing the forms of a European level. Oenergy to generate electricity, heat our homes or power our Another solution would be to get the current emissions cars. Favourable forms of energy should be promoted, and trading mechanism working. Everyone is in agreement unfavourable forms should be phased out, and that’s it. Un- about this market-oriented solution, but no-one seems to fortunately energy system challenges have become far more have found a way of making it work. complex, in part due to overly simplifi ed politics. The third, and unfortunately perhaps the only feasible Most European countries are strongly increasing their solution deals with various capacity mechanisms. These are use of renewable forms of energy. But since these are not used to guarantee a level of income for thermal energy and yet always competitive, their implementation must be sup- other fl exible resources that makes them worthwhile on the ported through sizeable public funding. This has an increas- markets and attractive to investors. This can be carried out ingly disruptive effect on the functionality of the energy in several ways, but all of these are centrally controlled markets, and of the electricity markets in particular. Renew- non-market support arrangements. able energy primarily receives its income from outside of But it’s not all bad: energy technology is developing rap- the markets, but nevertheless enters the markets at a very idly, solar energy is becoming competitive, demand-side low price. This drives the entire wholesale market price management is moving forward and developments are down and weakens the profi tability of conventional ther- taking place in electricity storage technology. We begin to mal energy production. In many countries, conventional fi nd technical solutions if electricity markets are given the plants are being mothballed and plans for new investments chance to work. have been put on hold. In Finland, the coming government should take a more A politician may think that this is precisely what we comprehensive approach to energy and climate politics. should aim for: as old production makes an exit, it paves They should view the system as a whole and take into the way for renewable energy. But renewable energy still consideration how political actions can affect the energy requires well-functioning markets. The strongly intermittent markets. Of course we must produce energy in an environ- and hard-to-predict wind and solar power require back- mentally friendly manner, but in modern society we must up capacity to balance production with consumption. That also ensure uninterrupted supply. The consumer does not balancing power is precisely the production being driven pay only for energy but also for the right to use it when- off the markets. ever they want. We must secure the system’s ability to pro- Well-intentioned politics is therefore making things not duce energy, to respond fl exibly to demand and to stay in only diffi cult for itself, but also leading to another sig- balance. From an electrical engineer’s point of view: we nifi cantly more challenging issue: how can we ensure the should talk more about power (capacity) than energy. security of supply of electricity? This isn’t just a Finnish problem; it applies to all of Europe. Unfortunately the only actions we can take are diffi cult. The fi rst solution would be to better integrate renewable energy into the marketplace by replacing price guarantees Juha Kekkonen is Fingrid Oyj’s and other support with lighter grants for technology devel- Executive Vice President

FINGRID 1 .2015 | 3 One market, many prices

On average, wholesale electricity costs signifi cantly more in Finland than in other Nordic countries. What should be done?

TEXT OUTI AIRAKSINEN | ILLUSTRATION BBO

lthough electricity is sold to import electricity from Russia. “In Rus- according to supply and sia, electricity producers are nowadays demand on the Nordic elec- paid separately for capacity availability, tricity exchange, Finns of- with payment collected from consumers ten have to fork out more and exports. Previously, Russian electric- Afor their wholesale electricity than their ity was competitive, but now it’s no long- Swedish counterparts, for example. Last er worth buying electricity during hours year in Finland, one megawatt hour of which are subject to a capacity fee,” says wholesale electricity cost an average of Kekkonen. 36 euros, which was 14 per cent more Nowadays there’s also a demand for than the average in the Stockholm area. Nordic electricity in the Baltics, which At its peak, the price difference for an in- adds further congestion to the transmis- dividual hour was no less than 164 euros. sion connections between Finland and “Last year there was one particular Sweden. day in December when Finland saw fi ve hours priced at over 200 euros. The dif- Producers benefi t ference was due to several coincidences: but the industry suffers not only was there a cable restriction

in place but there was also some power Is the separation of the Finnish regional plant maintenance under way,” explains price from the Nordic calculated “system Sales Manager Sami Oksanen from price” a problem? It depends on whom Nord Pool Spot. you ask. Pasi Kuokkanen is CEO of ElFi, The price differences are often caused which represents larger Finnish electric- by congestion, wherein buyers wish to ity buyers. He calculates that the price purchase more electricity at the exchange difference has a negative effect on Finn- price than transmission connections al- ish industry amounting to hundreds of low. “In Finland, we’re lacking produc- millions of euros in loss of competitive tion due to structural reasons. The delays ability, even though companies of course faced by Olkiluoto 3 and the closing of strive to protect themselves against the older plants mean that we have a sig- price differences by purchasing deriva- nifi cant lack of domestic production, and tive products. that’s increased our need for imported “The fact that the price difference has electricity,” says Fingrid’s Executive Vice been this great will continue to have an President Juha Kekkonen. effect in coming years and on the prices Another background factor is the shift of future products. The impact of con- in import focus, since it is less profi table tracts made in recent years extends to

FINGRID 1 .2015 | 4 ”Finland and Sweden should be part of a single price area and work together to strengthen the Nordic network sufficiently quickly. We should try to move away from national electricity transmission system operators and towards truly ”The price difference has a joint-Nordic markets.” negative effect on Finnish Simon-Erik Ollus, Fortum industry amounting to hundreds of millions of euros in loss of competitive ability. Investments in transmission connections alone will not solve the problem. We have to develop existing hedging products or introduce a new hedging product.”

Pasi Kuokkanen, ElFi

FINGRIDID 1 .22015015 | 5 electricity users as weakened competitive today’s price. Measures can also be taken for the development of the EPAD market ability far into the future with regard to through bilaterial purchase and sales – or the creation of alternative, parallel Sweden,” says Kuokkanen. contracts on the OTC markets. products. Kymppivoima’s Power Procurement Taking protective measures is smart “There are lots of companies who have Manager Mika Laakkonen works to find since the development in the price of to draw up a separate strategy for hedg- a balance in the middle ground between electricity can be unpredictable. In ing against area price, since EPADs do buyers and producers. “From an electric- addition to demand, the price is also not meet the same reliability criteria as a ity producer’s perspective, the Finnish affected by precipitation and tempera- system price product. It’s unfortunate and regional price difference is favourable, ture, political decisions and distur- it increases the costs involved in the pro- but increases costs for electricity buyers. bances in production or in transmission curement of electricity,” says Kuokkanen. In the longer term, a harmonious, liquid connections. The more markets cash flows are di- market area without regional price dif- Derivatives listed on the Nasdaq OMX vided amongst, the less exchange there is ferences will provide better opportunities provide good protection against changes and the weaker the markets are. “Liquid- for trade and increase market reliability,” to the system price. On the other hand, ity is dispersed over several areas since says Laakkonen. products which protect against regional Finland has its own hedging products In addition to the price of normal elec- price difference − that is, for example, and Sweden has four different hedging tricity, regional price differences also in- the difference between the Finnish and products. If markets are structured in this crease the price of imbalance power. For Swedish area prices − or “EPAD” (Elec- way, liquidity is unavoidably dispersed. example, if transmission connections are tricity Price Area Differential) markets We should keep this in mind when think- congested, a disturbance in a power plant are not properly functional due to low ing of alternative methods of organising may cause the intraday price of imbal- exchange volume. On such illiquid mar- hedging markets,” says Nord Pool Spot’s ance power to fluctuate wildly. kets, purchase and sales offers can be Oksanen. So what should we do about the area very different from one another, meaning According to Oksanen, up to 40 per price difference? According to Kuok- no trade takes place. Kuokkanen hopes cent of trade is speculative financial kanen from ElFi, we can’t put off deal- ing with industrial competitiveness, so investments in transmission connec- tions alone will not solve the prob- lem. “The fastest-acting method is to develop existing hedging products or to introduce a new hedging product to the market which would supplement the current ones. This would not rule out Congestion income any structural solutions. We need a new connection between Finland and Swe- to strengthen the network den, but everyone knows that it would take time,” says Kuokkanen. If it is not possible to transmit electricity according to the prevailing supply and demand on the markets, area prices will separate despite the joint power ex- Trade on EPADs change. Currently Finland is the only Nordic country with a single electricity price modest area covering the entire country. Sweden, for example, is split into four areas. ”We’re aiming to keep Finland as a single area, since it is good for the markets. Finnish industry and retailers purchase Sweden followed the same policy, but was unable to live up with changes in inter- electricity from Nord Pool Spot at the nal production/consumption balances, which led to structural congestion,” says Finnish area price. On Nasdaq OMX’s Juha Kekkonen from Fingrid. commodities exchange it’s possible to The congestion between price areas creates so called congestion income on the take measures against fluctuations in power exchange, which is divided on each border equally between the involved the price of electricity by purchasing de- grid companies. In accordance with EU legislation, the income must be used to rivatives, whose holders can purchase or maintain and increase transmission capacity so that congestion decreases over sell wholesale electricity at a determined time. price after a period of up to ten years. The ”Congestion income is a financing mechanism which forces grid companies more we believe, for example, that the to invest in the network when there is congestion of a permanent nature in the price of electricity will rise in the future, system,” outlines Kekkonen. the more worthwhile it is for electricity Last year, Fingrid accumulated over 50 million euros from congestion income. users to pay for a derivative which would Due to the unusually large size of the sum, in addition to investments, Fingrid also entitle the buyer to pay for electricity at decided to lower its grid network tariffs.

FINGRID 1 .2015 | 6 trading, whose parties do not engage products do not have to be used in such single market from a regulative per- in any other activities on the electricity areas,” says Kekkonen. spective, too. markets. However, he would not place Laakkonen from Kymppivoima doesn’t “Instead of market models, we should hope in improving liquidity outside of consider long-term transmission rights speak out about how Finland and Swe- the industry. “It is the task of market- to be a good idea. “It would be better to den should be part of a single price area places to create a market environment support the current market model and to and work together to strengthen the where trade is attractive, but players strengthen transmission connections. If Nordic network sufficiently quickly. We create liquidity by starting to buy and two competing marketplaces are formed, should try to move away from national sell products,” says Oksanen. there is concern that it would weaken the electricity transmission system op- liquidity of the existing market and fur- erators and towards truly joint-Nordic ther decrease the range of hedging prod- markets,” says Ollus. A grid company ucts,” outlines Laakkonen. In an ideal situation, electricity would as market maker? In any case, Fingrid has decided to in- flow freely within the Nordics and the One method of improving liquidity is to vestigate different alternatives. Baltics, as well as to continental Europe obtain a market maker, that is, a party “Both legislatively and from the per- and Russia. The construction of trans- which commits to quoting buy and sell spective of a TSO’s role, it would be mission networks is, however, slow and prices on the markets for a commission. problematic if Fingrid were to become expensive, and investment is not prof- All eyes are on Fingrid. a market maker. On the other hand, we itable if congestion is only a transient “If a grid company were to be the are investigating the issue of long-term phenomenon. Ollus believes that to start market maker for a product, it would be transmission rights in case the poor li- with it would be enough to agree on the a step in the right direction for market quidity of the financial markets were to unification of price areas. functionality and send a positive signal obligate grid companies to offer these in “Of course it would take time, but about the reliability of the product. In the Nordics, too,” explains Kekkonen. that’s the direction we should be mov- any case, the grid company is active on ing in. We just need the political will the market hedging its own procurement, to do so, and actors must be willing to A need for and I don’t think it would disrupt market promote the matter. The ball is largely network reinforcement activity,” says Kuokkanen. in the grid companies’ court,” he adds. Market viscosity has also been no- Though legislation would permit it, not Ollus believes the current plans to ticed in the EU, where work to prepare everyone looks favourably on grid com- strengthen the transmission network in network codes is under way. It’s possi- panies’ participation on the financial the Nordics to be far too modest. For ble that the new network codes would markets. It would mean taking a risk, example, a new connection to Sweden see grid companies obligated to offer with electricity users ultimately ending might not be complete until 2024. The actors long-term transmission rights, up paying the price through increased problem is that connection construction which when purchased, could provide grid fees. is not solely down to Fingrid. protection against regional price dif- Fortum’s Chief Economist Simon- “The Swedes aren’t very enthusiastic ferences. These are financial products Erik Ollus believes it would also distort about a third line up north. They say with a maximum duration of one year, the markets. “Grid companies’ primary that they first have to remove their own whose value is based on the price dif- task should be to strengthen the net- internal congestion before constructing ference between two bidding areas. work to prevent congestion. We should a transmission connection with us. Dis- “Continental Europe uses products strive for larger price areas,” says Ollus. cussion is ongoing, but we cannot start entailing long-term transmission rights. Fortum has set a goal of a truly work on a cable to their network alone,” But the Nordics have developed finan- Nordic internal market wherein there says Kekkonen. cial markets, and the current drafting of would only be one regional price and Even though plenty of people would network codes permits that transmission Nordic markets would be treated as a like to see faster network construction, Kekkonen is eager to point out that the situation could change. For example, at the time, Fingrid’s decision to construct Fact Fenno-Skan 2 was criticised, since the transmission between Finland and Swe- Liquid = easily converted or traded into cash, functional. On the securities den back then was easier. markets, liquidity is better the faster and more easily an investment can “The situation could improve in 2−3 be converted into cash. On illiquid markets, there is so little exchange that years due to e.g. the completion of Olki- larger transactions cannot be made without having a significant effect on the price level of the securities. luoto 3 or a change in the Russian situ- ation,” says Kekkonen. Ŷ

FINGRID 1 .2015 | 7 A new energy palette – how can we increase power system flexibility?

According to a report commissioned by energy industry parties, in the near future Finland will become increasingly dependent on its neighbours during peak consumption. Changes in the structure of energy production increases the risk of a power shortage. ”We need discussion on how we can help Finland to develop a new, environmentally friendly energy system to keep the country’s lights on,” explains Fingrid’s President and CEO Jukka Ruusunen.

TEXT SUVI ARTTI | PHOTOGRAPHS EERO KOKKO

capacity would be constructed. Now construction is driven by international competition. We don’t import electric- ity from other Nordic countries for inland’s dependency on its A system with little flexible capacity fun; their capacity is more competitive neighbours is nothing new, is more susceptible to disturbances. than Finland’s,” says Fingrid’s Presi- since Finland has long im- Recent years have seen Fortum’s dent and CEO Jukka Ruusunen. ported a significant share of Inkoo power plant and Pohjolan “At the same time, subsidised capac- its electricity from the Nor- Voima’s Mussalo power plant both ity is being introduced to the market. Fdic countries and Russia. Structural closed “prematurely”. According to a This will result in a financial issue: changes to electricity production report commissioned by energy in- who will maintain, or even construct, capacity are a newer phenomenon. dustry parties, more condensation ca- the capacity that’s needed to balance Production which does not react to pacity is expected to exit the market the power system? The structural scar- price, such as wind power, is increas- before the end of its technical service city of flexible capacity will increase ing. At the same time, flexible con- life. A background factor to this is throughout the Nordics in the 2020s. densation production capacity is exit- the market price of electricity, which What’s worrying is that there are very ing the market as unprofitable, even has long been low. few truly commercial production in- though it would be needed to balance “Previously, when we still had the vestments in sight. Currently, produc- the system – after all, we still need old electricity maintenance system, tion mainly increases through finan- electricity on overcast and still days. the state decided what production cial support,” says Ruusunen.

FINGRID 1 .2015 | 8 On the other hand, if a pure mar- ket economy is chosen, the price of ”It´s worrying that there are electricity may occasionally rise very very few truly commercial high. “In some parts of the United States, the market economy drives production investments the price of electricity – and in those in sight.” cases one thousand euros per mega- watt hour is nothing,” he adds. Ruu- Jukka Ruusunen sunen believes that Finns should con- sider their policy carefully, since it’s difficult to change course later on.

household pays approximately 30 Finland is not alone with this prob- cents/kWh for its electricity; almost lem. Ruusunen sees a need for cross- 50 percent more than the average Eu- border cooperation. “We should work ropean household. Around one fifth together to think about these things of a German consumer’s electricity in at least the Baltic area. Political bill is support for renewable energy. discussion is very national, and there Pure market economy “The German example demonstrates is reluctance to seek international so- or subsidised production that political decision-making can lutions. National solutions can prove The change in the structure of en- have a surprising amount of influ- expensive,” he says. ergy production is unavoidable. “The ence,” says Ruusunen. Denmark is one example of a coun- electricity production system must be radically overhauled in order for us REPORT: IMPORTED ELECTRICITY TO PLAY A GREATER ROLE to meet our goal of no carbon diox- ide emissions from energy production Energiateollisuus ry, Fingrid Oyj, tion will not be able to cover consump- by 2050. Fingrid’s network could be Metsäteollisuus ry, Suomen ElFi Oy tion even after the completion of OL3. powered solely by solar power in 40 and the Ministry of Employment and Delays in the completion of OL3 the Economy commissioned Pöyry and the exit of electricity production years’ time. That’s nevertheless a long Management Consulting Oy to carry capacity from the market have an way off, and we will also need elec- out an assessment of the sufficiency effect on the deficit in electricity pro- tricity during the transition period,” of Finland’s electric power and the duction. A significant reduction in the development of the electricity pro- amount of electricity imported from says Jukka Ruusunen. duction capacity structure in the near Russia has also decreased the tradi- “Right now we need political deci- future up until 2030. tional supply. Condensation capacity sions to find out what steps to take According to the report completed in particular is deemed unprofitable. in January 2015, Finland’s current In addition to nuclear power, other to achieve the goal. Will we accept electricity production capacity is not new production capacity to be con- a purely market-oriented system, or sufficient to meet peak consumption structed in Finland mainly comprises will we choose subsidised capacity?” needs. Our electricity production will wind power, which cannot be relied on he asks. He believes that open, socie- be at its most deficient around 2018 during peak consumption. before the completion of the third In neighbouring regions, produc- ty-wide discussion is the key to solv- Olkiluoto nuclear power unit (OL3). We tion capacity exceeds consumption ing this difficult matter. need to import approximately 2,800 during peak demand, so there should Ruusunen gives Germany as an ex- megawatts of electricity during the be enough electricity for Finland to peak consumption period of a normal import. Sufficiency nevertheless -re ample of a system based on financial year and this amount can reach up to quires cross-border transmission support, where renewable electricity 4,000 megawatts on an extremely cold connections and the security of sup- production is financed through ex- winter’s day. Finland’s own produc- ply of Finland’s own capacity. tra payments. The average German

FINGRID 1 .2015 | 9 try which has chosen wind power and going back to the old, safe electricity ply of electricity, particularly in sub- “put itself at the mercy of others”. maintenance system,” Ruusunen says. zero winter temperatures. Recently “Denmark’s system wouldn’t work “It could be that in 2050 we are Fingrid has invested in the mainte- without its neighbours. Denmark is re- able to store a large amount of elec- nance of direct current or HVDC con- liant on successful international trade.” tricity. It would be wonderful if we nections, and has succeeded in reduc- were able to produce our own elec- ing the amount of disturbances. tricity through solar power and then Several simultaneous, significant Self-sufficiency store it in batteries. It would, how- disturbances at power plants or in is not an intrinsic value ever, require huge advances in tech- cross-border connections can result One long-standing topic of discus- nology to attain such a feat. Research in a power shortage, and in extreme sion in the energy industry is self- is constantly under way on storage cases, electricity consumption may sufficiency. “Politicians love to talk possibilities, but it’s unlikely to be have to be limited. A power shortage about self-sufficiency. But we have feasible any time soon.” is a manageable situation, one for to remember that we can’t have ev- which Fingrid has prepared in co- erything. If we increase the amount operation with distribution network Limiting electricity consumption of wind power in Finland, our hy- companies. As the grid owner with in extreme cases dropower will not be enough to bal- system responsibility, Fingrid holds ance the system. Finland is entirely While we wait for technology to ad- the statutory right to ration the con- dependent on other countries and vance, cross-border connections play sumption of electricity. cross-border connections. There’s no a vital role in securing Finland’s sup- “If we had to resort to rationing, the limitations would affect a small amount of electricity consumption for a brief duration. The price to so- ciety would, however, be high if the ”The significance of consumption of electricity had to be limited due to insufficient production the security of supply capacity. The political significance of is a question the next such an outage would be far greater government will have than would be the case for an out- age caused by a storm or a technical to deal with.” fault,” says Ruusunen. In the best case, demand can be Riku Huttunen cut using smart technology so that it wouldn’t be a problem: for exam- ple, the hot water boiler in a detached house or a freezer in a shop could be turned off for a short while. Technol- The pros and cons of self-sufficiency ogy makes demand-side management possible for small-scale industry and The significance of the security of supply in Finland’s electricity market households, which Ruusunen believes politics is a question the next government will have to deal with, says is an important tool for increasing Riku Huttunen, Director General of the Ministry of Employment and the flexibility in the power system. He feels Economy’s Energy Department. that this should take place on market “A high degree of self-sufficiency with regard to the electricity supply terms rather than through regulation. has been a strategic target for Finland. Electricity is currently available “Demand-side management should from neighbouring countries at such a low price that it discourages be financially viable in order for the market-oriented investments.” masses to go along with it. Now that “The markets we operate on already extend to the Nordic and Baltic electricity is so affordable, very few countries, and are continuing to expand. We benefit from wide-reaching consumers make the effort to change markets through lower prices, among other things. On the other hand, their consumption habits according we must be able to ensure the security of supply and sufficiency of to the price of electricity.” power during peak consumption.” “Hopefully that will all change and Huttunen points out that a lack of market-oriented investments is in twenty years we’ll have more de- not just a national problem, but also a European problem. The Energy mand-side management and flexible Union’s target is stronger market orientation. “The EU’s energy policy production capacity whose mainte- currently focuses on limiting actions which would distort the markets, nance is profitable on market terms,” so that’s a step in the right direction.” Ruusunen says. Ŷ

FINGRID 1 .2015 | 10 Matti Supponen

Quo vadis, Nordic power cooperation?

he sun is shining in When it comes to coopera- through a window over- tion, it’s far better to look to the T looking the courtyard future. The game is not yet lost. at the European Commission’s It’s clear that national interests Directorate-General for Energy have to be taken into account. building on Rue de Mot. The The Norwegians want to focus walls of my offi ce are full of pic- on their green cash machine, tures and maps; this has been my Sweden primarily wants rid of room for ages. I’m in dire need the congestion in the south and of a wastepaper basket to recy- Denmark has withdrawn from cle everything. In pride of place the group of opponents to the right in front of me is a Nordel capacity markets, perhaps with grid map from 2001. In the direct An EU offi cial at the peak of his career. The commit- good reason. The Energy Un- sunlight it looks even more fad- tee has just approved the network code for capacity ion is bound to throw up issues allocation and congestion management (CACM). ed. Now and again I admire the requiring cooperation, and names of the transmission sub- there’s a vacancy for a front- stations: Alapitkä, Kassø, Letsi, Olsztyn the direction of fl ow is easy to switch runner. Regional retail markets and Matki, Püssi, not forgetting Hasle, of compared to Viking’s plans. their datahubs, truly joint-Nordic bal- course. Not necessarily the top tourist And things have gone downhill oth- ancing power markets, TSO coopera- destinations, but nevertheless crucial erwise, too. In the early electricity mar- tion over system operation or even a to the European electricity markets. ket years, NordPool had all of Europe regional support system for renewable The Nordel map has faded now, and in its grasp, but now there’s a danger energy sources could all be good plac- even Nordel itself has faded out of ex- of going on the defensive and becom- es to focus on. Or is it nicer to jostle istence since transmission system oper- ing a minor player. The European in- and argue with new partners from time ators founded ENTSO-E. How is Nordic traday project will most likely leave a to time? The Germans, the French, the power cooperation doing? At fi rst, it bitter taste across the Nordics, and as Polish... we’re spoilt for choice. Nordic was easy to be a civil servant respon- yet there’s no end in sight. In central power cooperation is dead, long live sible for the Nordics: all I had to do Europe under the pressures of renew- Nordic power cooperation! Ŷ was copy ready solutions and try to put able energy, intraday markets are de- them into legislation. For quite a long veloping rapidly, which naturally goes Matti Supponen works for the Euro- time, that was enough. Market coupling hand in hand with industry leadership. pean Commission. However, the views will continue to spread until it’s reached Meanwhile the Nordics, so spoilt with expressed in this column are the per- even the most remote corners. hydropower, would still manage fi ne sonal views of Matti Supponen. They Cooperation, however, seems to with hourly imbalance settlement. have not been adopted or in any way have dropped off the face of the earth. But let’s not be pessimistic. There’s approved by the European Commis- There are more and more news sto- some good news, if you really think sion and should not be relied upon as ries about disputes. It’s a shame that about it. The dispute over congestion a statement of the European Commis- Sydvästlänken doesn’t continue on to between Denmark and Sweden was sion’s views. Norway; Norwegians are more focused actually resolved, after being given a on seeking greener pastures. In retalia- slight nudge. Finland and Sweden are tion, the Swedes are concentrating on participating wonderfully in saving the their own projects, with the Finns de- Baltics from the Russian Bear, despite nied a new cross-border line into Swe- some interregional disputes in the area. den, etc. My Nordel map is so old that Estlink 2 was constructed in a top time, it still shows the Viking cable from as if the diffi culties associated with Norway to Germany. The name has constructing transmission lines had not since been changed to a less conquest- entered into people’s consciousness in oriented alternative (NordLink) and Finland at all.

FINGRID 1 .2015 | 11 Work never stops in market development

”The energy industry is extremely interesting, since each person has their own concept of how electricity should be used and produced. Electricity is at the heart of society in many ways,” says Electricity Market Specialist Mikko Heikkilä. MIKKO HEIKKILÄ TEXT MIRA MUURINEN | PHOTOGRAPH MATTI IMMONEN Age: 32 Lives in: Hermanni, Helsinki. Education and career: MSc. (Eng.) from the Tampere University of Technology. Previously worked at the Pori Energia power plant and as a senior engineer at the Energy Authority. in a key position regarding the creation of the Baltic Sea Hobbies: Running and golf. Completed his first marathon electricity markets.” last year and is planning his second this summer. Another source of work are the European network codes, which Heikkilä says require grid owners to assess their own operating models and to justify their solutions. “There’s always work to be done when it comes to ikko Heikkilä began work at Fingrid last au- market development. Network codes require us to de- tumn. velop our operating methods and to increase cooperation M “Before moving to Fingrid, at the Energy Au- and transparency both locally and regionally at a pan- thority I was responsible for matters relating to the secu- European level.” rity of supply of electricity and for various supervisory tasks relating to the wholesale electricity markets. Of Motivation from forward thinking course, work at Fingrid is different in that as a company it is closer to the electricity markets. On the other hand, Heikkilä is fascinated by the energy industry’s key role Fingrid is also a societal actor; we work for the benefit in society. of all society and we are open and fair. We serve a large “Energy matters affect every individual person and group of customers and we constantly have to think of every industrial sector. Fingrid plays a central role in the wider picture, just like an authority does.” the power system and electricity markets, so work here really offers a true vantage point to see what’s going on around us. This job allows me to have an impact Creating Baltic Sea markets and to do things that have real societal significance. Heikkilä works in Fingrid’s market development unit, That motivates me.” through which he is also involved in the development Heikkilä says that a forward thinking attitude that trends of the Nordic and Baltic electricity markets. encourages development is characteristic of Fingrid. “Nordic electricity market cooperation is going to “Attempts are continuously made to develop opera- once again take centre stage. The Baltic direction is tions and the target is to be a role model for transmis- a more recent development, cooperation there is not sion system operators. From an employee’s perspective, yet at the same level as it is in the Nordics. One of my this increases motivation and challenges individuals tasks is to increase balancing power market coopera- to develop themselves, too,” Heikkilä says in praise of tion with the Baltics now that countries in the region Fingrid’s amiable working atmosphere. are creating their own internal balancing market. At “Due to the nature of my job at the Energy Authority, the start of next year, the Swedish and Lithuanian grids I was often in contact with Fingrid employees and I’d will be connected by an undersea cable, meaning that already formed a positive image of Fingrid as a work- the Baltics’ significance on the Nordic markets will be- ing community. There’s plenty of room for different come even more important,” explains Heikkilä. perspectives and engaging discussion. The atmosphere “The EstLink undersea cables between Finland and Es- at work makes Fingrid a really good workplace.” Ŷ tonia have long been the only connection between the Nordic and Baltic countries, so for years Fingrid has been A video presentation of Mikko Heikkilä is available at: youtube.com/fingridoyj

FINGRID 1 .2015 | 12 This column presents and defines terminology in the electricity transmission business and related fields.

NETWORK CODES

By now we’ve all come across the term network code at energy industry seminars and on the pages of interest group magazines. The first electricity market network code will come into effect this year. Just what are these codes and how will they affect electricity market functionality up here in the north?

he unification of the EU energy Work is currently under way on From a Nordic perspective, a sig- markets is promoted though approximately ten network codes di- nificant change is a sizeable increase Tlegislative procedures with so- vided into three main groups: market, in processing by the authorities and in called energy packages. The third and system connection and system opera- detailed regulation. In the future, au- most recent energy package came into tions codes. Market codes legislate on thorities will confirm a huge number effect in 2009. The package, which e.g. the status of electricity exchang- of market terms and technical details thoroughly shook up the structure of es, the specification of transmission concerning network operations. Time the electricity markets, also determined capacity and balance management. will tell as to whether we will achieve the judicial position of network codes System connection codes meanwhile a more balanced operating environ- and a preparatory process for them. deal with connection requirements set ment and more effective, functioning The task of preparing the codes was on production and consumption, and markets, or whether detailed regula- given to ENTSO-E, the European Net- on the properties required of HVDC tion will delay progress. work of Transmission System Operators connections. Codes which apply to At Fingrid the codes’ entry into ef- for Electricity, and to ACER, the Agency system operations legislate on e.g. sys- fect is keeping a large number of its for the Cooperation of Energy Regula- tem reserves and the management of personnel busy. The implementation tors. In the process, ACER first deter- disturbances. of network codes has been designated mines common policies, a framework, a corporate-level strategic project. based on which ENTSO-E prepares a *** Most of the changes are prepared at draft of the network code. Fingrid is What will we achieve through this a European level or in cooperation also actively involved in this work. This exercise? Will the Baltic Sea region’s with neighbouring grid network op- phase lasts a total of 2–3 years. electricity markets become better than erators, giving actors a fair chance to Network codes are fine-tuned into ever? It could be that practical chang- have their say. Expected changes will their final form in a comitology pro- es to the Baltic Sea region remain be communicated proactively and in cess wherein representatives of EU relatively minor. The network codes advance to the markets and to interest member states approve the network largely outline the Nordic market groups. Ŷ codes. Finland is represented in the model, and no fundamental changes process by the Ministry of Employ- are on the horizon for the north. The TEXT MIKKO HEIKKILÄ ment and the Environment. Experi- process nevertheless requires Nordic ences of the first approved network actors to critically inspect their ex- Read more on ENTSO-E’s website code taught us that despite a long pe- isting practices and market model, to www.entsoe.eu/major-projects/network- code-development riod of preparation, significant con- carefully justify their practices and to tent changes can crop up just before further increase cooperation. the finish line. Finally, the network codes are approved by the European Parliament. At this phase, changes Capacity Allocation and Congestion Management (CACM) in a nutshell: can no longer be made to the content. Last December, EU member states approved the first network code: CACM. It sets out requirements for calculating transmission capacity and on the *** structure of day-ahead and intra-day markets. The outlined market structure primarily follows the Nordic market model. There are however some differences: After this multiphase preparatory pro- • the price for transmission capacity in congestion situations will also be cess, network codes receive legal sta- determined on intra-day markets tus in all EU member states. For legal • several electricity exchanges may operate in Finland • Fingrid’s method of hearing its interest groups’ views will take on a more reasons, some of the network codes formal format have been renamed as guidelines, but • The number of market rules confirmed by the Energy Authority is increasing. this currently has little significance in CACM will come into effect in mid-2015. practice.

FINGRID 1 .2015 | 13 WIND POWER AS A TARGET FOR INVESTMENT

Investment company Taaleritehdas is offering all Finns the opportunity to invest in the wind power business. The company used its first wind power fund to develop one wind farm in Honkajoki and two in Ii. Recently a second fund was opened, with dozens of wind turbines under construction all over Finland.

TEXT SUVI ARTTI | PHOTOGRAPH MIKKO TÖRMÄNEN

here are around 85 billion tal investment capacity. The fund was in large entities: infrastructure, power euros just lying around un- closed in October 2014, but it is still plants, construction site supervision. used in Finnish bank ac- possible to participate in a profit-based NCC was responsible for infrastructure counts. Our goal is to push bond with a minimum investment of construction in the Ii projects. Construc- even just 10 per cent of that EUR 10,000. tion site supervision was outsourced to ”Tinto circulation to benefit the economy Finnish Consulting Group. of Finland and Finns,” says Taaleri- German Nordex was chosen as the Permit processes require tehdas’ Director of Renewable Energy power plant manufacturer for projects plenty of patience and knowledge Taamir Fareed. in the first fund, and Taaleritehdas has Taaleritehdas is exceptional in Fin- Taaleritehdas is acting as project devel- been satisfied with its work. “Nordex land: an investment company which de- oper, and as such is responsible for the is skilled with cold weather and has velops wind power projects from scratch. wind power project right from the start, the market’s quietest turbines, which “We’re not bankers; we’re engineers,” beginning with a multiphase permit ap- are also well-suited to Finland’s wind says Fareed, referring to both himself plication process. “On average, the per- conditions: the turbines are tall and the and Production Manager Olli Hagqvist. mit process for a wind power project rotors are large,” explains Fareed. Both men are qualified electrical engi- lasts from 2–4 years, while construc- neers and have worked on construction tion takes around one year. Construc- Wind power: sites, including experience with install- tion is actually the easiest part when efficient and creates jobs ing wind measurement devices. it comes to wind power construction,” “In capital funding projects, such as says Taamir Fareed. The wind farms completed in Honkajoki wind power production, our role is to He has learnt from experience that and Nyby in Ii are just the beginning. make it possible for customers to par- the only certain thing when it comes to Taaleritehdas has projects under way in ticipate in projects they wouldn’t oth- wind power projects is that nothing goes Ylivieska, Alavieska, Kankaanpää and erwise be able to,” says Fareed. according to original plan. “There are in Myllykangas, in Ii. There are also Taaleritehdas opened its first wind many things which can stop a project around ten other projects in the pipeline power fund in December 2010. “The in its tracks, starting with swamp frogs. all over Finland. fund was so popular that subscriptions The only real key is to use an open and In Finnish conditions, we can pro- tripled and the fund raising had to be transparent working method and have a duce significant amounts of energy us- closed earlier than expected. It’s been skilled project development team who ing modern turbines. “There is still a great to see that Finns are interested in can spot project obstacles in time.” mentality in Finland that wind power is investing in wind power.” “Though not even the best team in for tree huggers. But the Ii wind farm, One hundred and eighty million eu- Finland can guarantee that everything to name an example, produces a total ros were invested in the Taaleritehtaan will go to plan. For example, a Defence of over 200 gigawatt hours of energy Tuulitehdas I fund. The second fund, Forces radar can stop an otherwise per- per year. The wind farm includes 27 launched in summer 2014, will be fectly feasible project from going ahead.” turbines with a hub height of 120 me- around 300–400 million euros in to- Taaleritehdas purchases construction tres and a rotor diameter of 117 metres.

FINGRID 1 .2015 | 14 Each turbine collects wind from an area “We’ve received help whenever we’ve Wind power makes it possible for new of over a hectare. The wind farm un- needed it. A big hats off to Fingrid for kinds of actors to enter the energy in- der construction at Kankaanpää will its fair treatment of all actors. There are dustry. Ordinary citizens and investors feature even larger turbines which will hundreds of projects under way in Fin- can now own industrial production. utilise wind from an area of up to 1.3 land, and Fingrid has to assess which “We want to provide wind power in- hectares,” says Taamir Fareed. of them will actually be implemented. vestors with the feeling of ownership; He points out that wind power also They’ve done very well in this difficult something more than just their name on creates more jobs than you might think. task,” says Fareed. a piece of paper,” says Fareed. As an ex- “Currently there are over 350 people He does have one wish concerning the ample he mentions the trip to the Hon- working on our construction sites, and development of grid tariffs: “It would be kajoki wind farm organised for Taaleri- a total of more than one hundred com- good if the tariff would continue to be tehdas’ investors. “One man looked at panies participate in the projects. Af- based on energy produced, rather than the turbines as he got off the bus and ter the construction phase, people are nominal power. The power fee is dis- wondered ‘do I own this?’. That’s what needed for the use and maintenance of proportionately harsh on wind power we’re talking about here. These are the the turbines. A farm with ten turbines producers, since the number of hours of investors’ turbines, not Taaleritehdas’. requires a maintenance team of 3–4 maximum production is relatively small.” We can achieve greater things together people. If we include administrative than we can on our own.” Ŷ tasks, production forecasting, electricity Towards sales, insurance, and so on, the num- market orientation ber increases drastically. According to a calculation by Sweco Ympäristö Oy, Taamir Fareed believes that the entire the wind power industry employs ap- wind power industry must invest in de- proximately 2,200 people in Finland, velopment in order to make the price of and the number could be significantly electricity from wind power closer to higher in the future.” the market price. Its effect on employment is noticeable “The level of support for wind power in Ii, which is home to Finland’s largest should decrease in the future, and the wind farm. According to Fareed, con- industry must be able to rise to the chal- ditions in Ii are ideal for wind power. lenge. We also need clear, binding tar- “Finland is full of windy places, but the gets, since without those it isn’t worth area should also feature an electricity starting new projects. Now that the wind network to connect the farm to. In addi- power train has left the station, it would tion, the location should also be suitable be foolish to put on the brakes.” with regard to population and environ- ment. All of these pieces fall into place perfectly in Ii. Although after the tur- bines currently under construction are complete, there won’t be any capacity in the electricity network anymore for further production.”

Fair service from Fingrid Taaleritehdas has received good service from Fingrid concerning the connectiv- ity of wind farms. Taamir Fareed knows that it is essential to clarify connectiv- ity well in advance in order for a wind power project to succeed. “The level of support for wind power should decrease in the future, and the industry must be able to rise to the challenge.” Taamir Fareed

FINGRID 1 .2015 | 15 GUARANTEE OF ORIGIN REGISTER NOW IN USE

Fingrid’s daughter company Finextra’s new guarantee of origin register was successfully taken into use on 1 January 2015.

he guarantee of origin service also implemented new terms of agreement. The terms are valid until further notice. Finextra also took up Finland’s membership in the European Association of Issuing Bodies (AIB). T The guarantee of origin register is used to issue, transfer, cancel and annul certificates of renewable energy and the efficient joint production of electricity. Guarantees of origin are also transferred in digital format from the register to other countries’ registers via the Hub, which is administrated by AIB. In addition to guarantees of origin for electricity, Finextra also issues the EKOenergia additional product symbol. Finextra’s guarantees of origin register contains 31 account holders. Approximately 270 power plants with a combined power of 7,400 megawatts are connected to the register. Of this, around 40 per cent is hydropower, just under 10 per cent is wind power, and approximately 50 per cent is other renewable energy. The register was implemented by Solita Oy, who is also responsible for maintenance and user support.

TEXT KAIJA NISKALA

DO GUARANTEE OF ORIGIN MARKETS WORK? We asked register users to assess the functionality of Finextra’s service and of the guarantee of origin markets for renewable energy.

How is your company involved in How well do you feel that the Do you have any ideas or 1. the guarantee of origin markets for 2. guarantee of origin markets for 3. suggestions for development of renewable energy? renewable energy function? the Finextra service?

Jere Anttalainen specialist, processes and Juha Kortessalmi product development Senior Portfolio Manager Savon Voima Oyj UPM

Our combined electricity and heating production power plants As Finland’s second largest producer of electricity, UPM is a 1. in Pieksämäki and Iisalmi, as well as 9 hydropower plants, are 1. major producer of renewable energy, but also uses electricity all registered on the guarantee of origin register. In addition, in cellulose and paper manufacturing. we are also looking to enter the LECs markets in Great Britain with regard to our hydropower. Currently there is clearly more supply than demand, which 2. has forced the price of guarantees of origin down to a very 2. Since guarantee of origin trade usually takes place between low level. Renewable energy producers are left with little two parties and only in some commodities exchanges, demand profit after system and administrative costs. Supply is increased and supply are dispersed. There are also numerous product especially by guarantees from outside the EU, which are approved alternatives. On the other hand, background systems for the admin- in the system and which can be used to increase eco-friendliness in istration of guarantees of origin and fulfilment of obligations have electricity procurement. developed, providing guarantee of origin providers and procurers with more effective methods of verifying and declaring origin. It should be possible to transfer fuel notifications from fuel 3. databases or energy management systems directly to Finex- 3. The functionality of the electronic guarantee of origin register tra’s register. Currently they have to be entered manually, has improved. We are able to utilise the reporting offered by which increases the risk of human error. the system with relative ease using Savon Voima’s Qlikview- based guarantee of origin and green electricity position manage- ment. One area for development could be the development of system interfaces to make them more automated and the development of file transfer to support .xls, .xml and .csv file formats.

FINGRID 1 .2015 | 16 Suvi Viljaranta Portfolio Manager Enegia Portfolio Services Oy Juha Ruokonen From 1 April 2015, Energiakolmio Portfolio Manager and Skapat Energia are Enegia. Fortum Power and Heat Oy

We help customers to comply with the obligations under the Fortum is involved in the guarantee of origin markets both as a 1. legislation concerning guarantees of origin (GoOs) and we 1. producer and seller of renewable energy. Fortum’s production manage their GoOs and production plants in the guarantee portfolio includes plenty of hydropower and bioenergy, as well of origin register. We trade and broker GoOs based on our European as some wind power. The electricity sold by Fortum to households is customers’ wishes and we also sell GoOs directly to electricity end- one hundred per cent hydropower. We also offer our customers wind consumers, who wish to procure electricity produced from renewable power, EKOenergy and Bra Miljöval-labelled products. sources without changing their physical electricity delivery contracts. The guarantee of origin markets have developed gradually International trading and transfers are possible with guaran- 2. over the years. Wholesale market functionality has developed 2. tees of origin. For example, an actor who does not have any in a good direction in recent years. This has been driven by of its own renewable production capacity can easily purchase standard agreements and by an improvement in market liquidity. On renewable energy GoOs from the market. A well-functioning guarantee the consumer side of the markets, there are still many differences of origin system and the obligation to verify sold renewable electricity by between countries. For example, in Finland electricity sellers must cancelling GoOs increases market reliability, because the origin of elec- use guarantees of origin when branding their renewable energy-based tricity can be accurately tracked and the possibility of double-counting products, but in some countries this is not compulsory. Differences the renewable electricity is ruled out. An increase in the demand for in guarantee of origin legislation from country to country complicate renewable electricity would help to balance the guarantee of origin market functionality in general. Legislation and market frameworks market, where the price level is currently low due to an abundance of should be harmonised. supply. Despite a challenging schedule, the implementation of I would like to warmly thank the team who works with guar- 3. Finextra’s guarantee of origin registry has gone well. We 3. antee of origin issues at Fingrid. From a highly active register would like to see the possibility to apply guarantees of origin user’s point of view, the move to Finextra’s guarantee of origin to other forms of electricity production besides renewable energy. This registry went fl awlessly. I hope that the register will undergo further would make it easier to brand various electricity products and would development and that users’ wishes will be taken into account as well remove double counting of some forms of production. as they have been until now. An annual register users’ event could be a useful way to exchange experiences and to discuss the system.

Changes in electricity trading between Finland and Russia Bilateral electricity trading has been possible between Finland and Russia since December 2014.

n January 2015, electricity trading between Russia and adviser Risto Lindroos from Fingrid. “The new tariff IFinland began a practice wherein also bidirectional trade would cause signifi cantly less disruption to cross-border between the buyer and seller must go through the elec- trading than the previous model. Transmission between tricity exchange in Finland. Anyone importing electric- the countries is expected to increase as a result of the ity from Russia or exporting it to Russia must quote all reform.” The tariff proposal is currently being sent for electricity on a Nordic electricity exchange. hearing, and plans estimate the tariff to be taken into A new kind of tariff is also planned for electricity use in early June. trading between Finland and Russia. “The most funda- Another factor which may affect electricity trading be- mental change is that until now, we have used a fi xed tween the two countries is Russia’s decision to stop ob- tariff whereas the new tariff would be based on the price serving daylight saving time. During the summer Finland difference of electricity between Finland and Russia.” and Russia will observe the same time. “The decision to The tariff would be a certain percentage of the price give up daylight saving time may also have somewhat of difference between the markets,” explains corporate an effect on electricity trading,” says Lindroos.

FINGRID 1 .2015 | 17 The Advisory Committee’s role is to look ahead

CEO of Tampereen Sähkölaitos Oy Jussi Laitinen has acted as Chair of Fingrid’s Advisory Committee since the start of the year. In his work with the Advisory Committee he is most interested in affairs relating to electricity market functionality and development.

TEXT MIRA MUURINEN | PHOTOGRAPH MATTI IMMONEN

ccording to Jussi Laitinen, the new Chair of Fingrid’s Advisory Committee, a good example of the sig- nificance of the Advisory ACommittee’s work is the discussion around changes to grid tariffs. Transparency is key “Discussions reached a final result which worked with regard to the over- all situation and which successfully In accordance with Fingrid’s articles of association, the Advisory combined several different perspec- Committee is an advisory body whose members are appointed tives. Your own horizons are broad- by Fingrid’s Board of Directors. The meetings do not share ened when you hear various customer insider information, but all members appreciate the opportunity groups’ opinions and views on mat- it presents to discuss and exchange views. ters,” says Laitinen. “The role of the Advisory Committee is to look ahead and guide operations he task of Fingrid’s Advisory Committee is to act as a link between for the future. Electricity market de- Fingrid and its customers. The Advisory Committee takes a stand velopment, cross-border connections Ton the company’s different activities and customer services from a and datahub and its development are customer point of view. The Advisory Committee does not make formal all key themes in this work.” decisions, and instead acts as an advisory forum for discussion. “The Advisory Committee is a good test bench to provide Fingrid with feedback on its operations and plans. We receive perspectives and points No shortage of of departure for our operations from various customer groups evenly, topics for discussion directly and quickly,” explains Advisory Committee Secretary Jussi Jyrin- Members of the Advisory Committee salo, head of Fingrid’s Grid Services and Planning department. are evenly elected from Fingrid’s vari- The members of the Advisory Committee make up a fair representation ous customer groups having different of all of Fingrid’s customer groups. When appointing members, efforts are needs: electricity producers, large-scale also made to include members from all over the country. users, distribution companies and elec- The term of office for each member is three calendar years, with one tricity market actors. Many organisa- third of the committee’s members changing each year. The chairmanship tions, such as Tampereen Sähkölaitos of the committee is rotated around the customer groups. The Advisory Oy, nowadays represent more than just Committee currently has twelve customer members with two additional one customer group. participants from Fingrid. The Chair of the committee is Jussi Laitinen “We’re what you’d call a full-service from Tampereen Sähkölaitos Oy. company; we represent all sectors an According to Jyrinsalo, transparency is key in the work of the commit- energy company can operate in. Find- tee. Material from meetings is available to all interest groups. ing a balance between different per- “Fingrid hopes that the members of the advisory committee will con- spectives isn’t difficult – after all, the tinue discussion on these topics in their own background organisations idea behind the Advisory Committee is and act as a representative and mouthpiece for their entire customer to select representatives from as wide group. All of Fingrid’s customers should have the same information and a range as possible. Personally I’m the same opportunities to have an influence,” says Jyrinsalo.

FINGRID 1 .2015 | 18 Members of the committee, from left to right: Ilkka Latvala, Jukka Ruusunen, Jorma Myllymäki, Juha Lindholm, Jussi Laitinen, Raimo Härmä, Stefan Sundman, Tuomas Timonen, Tapio Jalonen, Jussi Jyrinsalo, Jarmo Tanhua and Rami Vuola. Missing from the photo are Juhani Järvelä and Jukka Mikkonen.

interested in matters relating to elec- titude, and we try to find solutions I feel that Advisory Committee mem- tricity market functionality, efficiency together. During my membership both bers could take more of a stand from and development, since these all re- the number and quality of discussions a domestic perspective. In order for quire a comprehensive understanding have been a positive surprise. It’s been operations to be developed in a man- of various industry sectors,” explains encouraging to notice that discussions ner that promotes Finland’s interests, Laitinen. and feedback have had an effect on it’s important for members to get in- Matters to be dealt with in the Ad- Fingrid’s operations,” says Laitinen. volved,” says Jussi Laitinen. visory Committee’s meetings relate to He finds it important that Fingrid services provided by Fingrid and their maintains and strengthens its posi- European affairs and the future pricing, transmission system opera- tion as European pioneer in technol- are hot topics tion, network investments and the de- ogy and security of supply. velopment of electricity markets. The Recently the Advisory Committee has “Fingrid’s current operating mod- objective is to examine all sectors of seen lively discussion on grid tariffs el and customer-orientation have Fingrid’s operations over the course of due to come into effect in 2016, elec- worked well. But the world is a rap- the year. tricity market development projects idly changing place, and we need on- “Of course, there’s no shortage of and development trends in the Euro- going development,” he adds. things to discuss, which is a challenge pean electricity markets. “For example I have great expecta- in itself. Different things are impor- “Customers seem to appreciate that tions concerning datahub. It is one tant to different customers, and that we keep them up-to-date on Euro- way of making the entire industry unavoidably increases the length of pean-level affairs. It is often hoped more efficient since we’re now in a the agenda for the meeting. Chair- that Fingrid would strongly act as situation where there are 80 distribu- manship of Advisory Committee is an Finland’s representative on the Euro- tion networks, 90 electricity sellers, honour, and a brilliant opportunity in pean level, but in some situations you and all of them have their own in- that it forces you to really familiarise need to strike a balance. We also try formation systems. The collection of yourself in more depth with the topics to encourage customers to have an measurement data in a single place at hand,” he says. influence themselves,” explains the will be needed no later than when de- Laitinen commends the atmosphere Advisory Committee’s secretary, Jussi centralised production becomes more on the Advisory Committee as devel- Jyrinsalo, head of Fingrid’s Grid Ser- prevalent. Datahub is a new area in opment-oriented and forward-looking. vices and Planning department. which Finland can show that it is top “The members all have the right at- “With regard to European matters, in Europe.” Ŷ

FINGRID 1 .2015 | 19 An increase in demand-side management creates new kinds of opportunities to maintain Finland’s power balance. This series will present pilot demand-side management projects.

A FROZEN WAREHOUSE PROVIDES DEMAND-SIDE MANAGEMENT FOR THE ELECTRICITY MARKETS

In cooperation with a Finnish frozen warehouse, Fingrid and SEAM Group have carried out a demand-side management project which has resulted in a large consumption site acting as part of the Frequency Containment Reserve for Normal Operation for the fi rst time ever in the Nordic countries.

TEXT MIRA MUURINEN | PHOTOGRAPH VALTTERI KANTANEN

he joint pilot project between is just one. The technical solution for the constructed in Finland, the more we Fingrid, SEAM Group and frozen warehouse was supplied by SEAM need adjustable production – or more the frozen warehouse began Group, which specialises in electricity effi cient demand-side management. early last year. It experiments consumption optimisation services. Häkli believes that there are plenty with whether or not frozen “We had already discussed the pos- of untapped opportunities in the con- Twarehouse can provide a Frequency sibilities of demand-side management sumption sector for demand-side man- Containment Reserve for Normal Op- with this actor previously, and the pro- agement. eration (FCR-N) for reserve markets, ject was already quite well thought out. “If we take new kinds of production and therefore help to make sure that Once we heard of Fingrid’s project, we resources into use, we cannot solve the production and consumption of knew we were thinking on the same problems using familiar methods. Large electricity in the Nordic power system frequency,” explains Jukka-Pekka consumers of electricity have a signifi - remains in balance. The project is part Häkli, CEO at SEAM Group. cant amount of adjustable capacity of a wider Fingrid project which charts The project is the fi rst of its kind in which it would be sensible to imple- possibilities for increasing demand-side the Nordic countries, and is also ground- ment from the perspective of the na- management on the electricity markets. breaking on an international scale. tional economy,” Häkli points out. “The frozen warehouse is the fi rst consumption site in the Nordics to act A ground-breaking pilot project Finding common ground as a Frequency Containment Reserve Power plants have balancing capacity for Normal Operation. Previously it was In the pilot project, the control auto- reserved in separate reserves which bal- only power plants that did so,” explains mation on controllable objects – such ance out the production and consump- Mikko Kuivaniemi, a Planning Engi- as refrigeration devices, vaporisers and tion of electricity in various situations. neer at Fingrid who has been involved condensers – is adapted to react to Under normal circumstances, this is with the project since autumn. changes in frequency and to adjust the carried out by the Frequency Contain- Behind Fingrid’s demand-side man- devices’ power. The consumption and ment Reserve for Normal Operation, agement project is the need to guar- production of electricity are balanced at which works automatically according antee electricity market functionality. the power system level in the short term to fl uctuations in power system fre- Nuclear, wind and solar power, for according to the system’s frequency. quency. Now the pilot project’s frozen example, are all non-fl exible forms The pilot project will last a total of warehouse is also acting as a reserve of electricity production which do not six months, during which time data will provider. normally react to changes in the price be collected and operations will be re- Last year, Fingrid sought partners for of and demand for electricity. The more viewed by both parties. It is important several pilot trials, of which this project non-fl exible forms of production are that regulation does not in any way af-

FINGRID 1 .2015 | 20 fect the quality of products in the fro- different perspectives, so to begin with “On a national scale, this is of course zen warehouse. Fingrid, on the other both parties had some problems with a minor amount, but it is only a single hand, has its own criteria as to how to communication. Nevertheless, we soon site. If we are able to obtain numerous carry out the regulation. found common ground. At the moment similar resources and combine them, “Consumption sites are an entirely it seems like the frozen warehouse regu- there is huge potential,“ explains Mikko new kind of resource to us and they lation works overall as we expected.” Kuivaniemi. behave very differently from power The advantage of the frozen ware- According to Jukka-Pekka Häkli, the plants. Fingrid has strict requirements house in demand-side management is its lessons learnt from the pilot project can for reserves, and for the Frequency ability to react to the need for balancing easily be applied not only to freezing Containment Reserve for Normal Oper- with a relatively quick response time. “A equipment, but also to heating equip- ation, the requirements were drawn up frozen warehouse is an excellent can- ment, since the logics are largely simi- largely based on power plants. Fingrid’s didate for a regulation resource, since lar. Major electricity consumers never- requirements require a great amount nothing changes in a -26 degree hall, theless differ greatly from one another, of fl exibility from reserve resources, even if you increase or decrease con- so it would not be possible to simply which can be challenging for consump- sumption occasionally. The regulation copy and paste the project as it is. tion sites,” explains Kuivaniemi. has no effect on the frozen warehouse’s “Each site has to be investigated on “To adjust the frozen warehouse, we operations, and costs are relatively low, a case-by-case basis. Something which use compressors which were originally too,” explains Jukka-Pekka Häkli. works flawlessly at one site might not designed for a completely different pur- necessarily work at all in another,” says pose. Now we’re collecting information Kuivaniemi. Nevertheless, the project Plenty of potential as to whether or not we have to change has produced useful information that the constructed regulation logics. In early 2015, the project had pro- can be forwarded on. SEAM Group programmed a system for gressed to the point where the frozen “There is a project under way at a the frozen warehouse which helps us to warehouse was able to participate in Nordic level which develops new re- examine how the regulation works in the electricity reserve markets. Even quirements for frequency containment real time. It has really made it easier to now it is providing quotes and carrying reserves, taking into account the re- monitor the project,” says Kuivaniemi out balancing, just like other reserve quirements of consumption sites to act in praise of the system. market parties. Currently the balancing as reserve providers. That project has Despite its challenges, Kuivaniemi power is 300 kilowatts, but it is possible provided us with valuable experience says that the project has progressed to increase the power by a factor of up as to what consumption sites are ca- as intended. “We see things from very to three. pable of and what their limitations are. It’s well worth taking these into ac- count when drawing up requirements for consumption sites, as well as when determining how to communicate said requirements,” says Kuivaniemi. Häkli believes that demand-side management projects have interna- tional potential. “Capacity similar to the frozen warehouse in this project can be found all over Europe, and im- plementing it is not prohibitively ex- pensive or challenging. Finland is not lacking in engineering competence, and hourly measurement has long been in use. Here it’s easy to develop and test these kinds of business models which could easily develop into a huge export advantage,” says Häkli. Häkli thanks Fingrid for their actions when searching for new solutions. “It’s great that Fingrid understood its role in the change and acted proac- tively. Of course there are always sur- Some of the people participating in the demand-side management project, prises when you do something for the from left to right: Jukka-Pekka Häkli from SEAM Group, and Laura Laitinen, first time, but all in all this project has Mikko Kuivaniemi and Jonne Jäppinen from Fingrid. progressed in a constructive way,” he summarises. Ŷ

FINGRID 1 .2015 | 21 Sustainable development powered by enthusiasm in the Ii community

The yard outside the Ii municipal offi ce in Northern Ostrobothnia features three charging points for electric cars. ”Iissä on ideaa!”, or ”Ideas in the Ii community!” in English, is written on the side of one of the cars being charged. The municipality is home to approximately 10,000 residents and it has come up with a brilliant idea to utilise local energy and reduce dependency on oil.

TEXT SUVI ARTTI | PHOTOGRAPHS MIKKO TÖRMÄNEN

he municipality of Ii is the only northern Finnish Farewell to oil municipality to participate in the Kohti hiilineu- traalia kuntaa (Towards carbon neutral munici- One of the fi rst sustainable development procedures in palities, HINKU) forum. While the EU’s offi cial the Ii community was to give up oil heating. “It doesn’t target is to reduce carbon dioxide emissions by benefi t anyone to use oil. Changing how properties are T80 per cent by 2050, HINKU municipalities are aiming at heated was an easy place to start,” says Ari Alatossava, the same target by 2030. The municipality of Ii has set off who is responsible for the development of the municipal- to a good start: its emissions during a review period from ity’s vitality and is the other driving force behind the 2007–2012 had already decreased by 31 per cent. energy saving campaign. Behind the ambitious targets and achieved savings are The method used to heat the municipality’s properties enthusiastic Ii residents. “I suppose I’m the fi rst guilty has been changed from oil to renewable, local energy: party,” admits Mayor Markku Kehus, who at the time of geothermal heat, wood chip heating and district heating the interview in February is just two months away from fuelled by wood chips, peat and pellets. Thanks to the retirement. Together with other Ii community residents, he new heating methods, the municipality is saving money has brought about a change for which both the environ- and putting the savings back into the Ii municipality and ment and the municipality’s budget are thankful. the local area. Savings have also been achieved through

FINGRID 1 .2015 | 22 Fact

CALCULATED SAVINGS • Energy savings 4,818 MWh (2010–2014) • Monetary savings €385,000 (2012–2014) OIL CONSUMPTION: • 367,492 litres in 2010 • 54,694 litres in 2014 ENERGY PRODUCTION IN THE II AREA IN 2014: • Hydroelectricity approx. 400 GWh (Raasakka power plant) • Electricity from wind power approx. 130 GWh (Vatunki, Olhava, Nyby and Laitakari wind turbines) • Heat from wood energy, approx. 40 GWh (heat plants and separate use) REGIONAL ELECTRICAL ENERGY USE, APPROX. 80 GWh

lation is happy to welcome new turbines. Now Finland’s largest cluster of wind farms is under construction in the Ii community. Ii’s municipal staff primarily use electric cars for their According to Markku Kehus, the key to successful pro- business travel. “If we want to succeed in our goal of re- jects is transparency and the ability of the municipality ducing carbon emissions by 80 per cent, our cars have to to stay within its own role. run on some other fuel besides petrol or diesel. That fuel could be electricity, ethanol, or perhaps in the future even “Our policy is to allow wind turbines as long as they hydrogen,” say Mayor Markku Kehus and Ari Alatossava, are not built between the sea and the village, but a little CEO of Micro-polis Oy, which is the company responsible further away from population centres.” Knowing its own for the municipality’s development. role means that the municipality takes care of permit pro- cesses and carries out zoning plans in close cooperation with project developers, but refrains from negotiating on the location of the turbines. “The project manager negoti- maintenance and adjustment procedures. An electricity ates that with landowners, we don’t get involved in that consumption monitoring system has been installed in the aspect,” says Kehus. municipality’s properties, ventilation machines have been He believes that open dialogue with residents and deci- serviced and their run times have been adjusted. sion-makers is vital when it comes to wind power projects. The change in heating method will create new jobs in “Together we’ve sought solutions which satisfy everyone.” the area. “Wood chips are sourced from the local for- Wind turbines provide the municipality with tax reve- est owner’s land. One person fells the trees and another nue, leasing income and jobs. “Construction site workers makes the wood chips. Using oil or coal wouldn’t benefi t stay and eat in the municipality of Ii. That has a major the locals,” says Mayor Kehus. impact on the municipality’s economy,” says Kehus. Once Another source of new jobs is the bioterminal under con- the turbines are complete, they will be serviced and main- struction in Kuivaniemi in Pohjois-Ii, where wood fuel is tained by people from Ii. Thanks to the area’s history, collected from the area in a centralised way. Constructed there’s plenty of competence around. by Oulun Energia, the terminal will be built in connection In addition to wind power, the Ii community also har- with a district heating plant which uses wood chips as fuel. nesses increasing amounts of solar energy to put to use. On Ari Alatossava has made sure that all costs and benefi ts of the roof of the Technology Centre Micropolis is Northern the procedures are measured. That way, the municipality can Finland’s largest solar collection system, with work carried present impressive fi gures not only on energy and monetary out on a joint order solar energy system which will allow savings, but also on reducing carbon dioxide emissions. for any property owner in the Ii community to start using Total savings of 85,000 euros were achieved in just solar energy. one year by changing the heating method used in three schools from oil heating to geothermal heating. Invest- Redirecting cash fl ow to the municipality ments pay themselves back after just 4–7 years. According to the mayor, the people of the Ii community have truly embraced the idea. One example is the village Energy from wind and solar power of Pohjois-Ii, which has declared itself Finland’s fi rst car- Residents of the Ii community have an unproblematic rela- bon-neutral village. “This just shows that they’ve really tionship with wind power. The fi rst wind turbines were understood the whole concept. It’s been a lightbulb mo- built in the municipality in the mid-1990s, and the popu- ment,” says Kehus.

FINGRID 1 .2015 | 23 The municipality of Ii is a living example of how a sensor shouldn’t be on the table, but should instead be single municipality can increase the use of renewable lifted to eye level in the middle of the classroom. The energy, improve its own energy self-suffi ciency, create amount of light needed is just enough for the lux meter new jobs and redirect cash fl ow from oil companies to to exceed a reading of 300 lux in a normal classroom and local business operations. 500 in a handicrafts classroom. For indoor temperatures, According to Kehus’ calculations, if all Finland’s mu- 21 degrees Celsius is suffi cient. nicipalities were to take a leaf out of Ii’s book, the coun- “We had such an enthusiastic group that teachers lost try’s trade balance would improve by up to half a billion power to their computers and projectors since the pupils euros. He admits however, that decisions are not only unplugged them all from the power outlets,” laughs head- down to municipalities, but that the choices made by en- master Markku Varanka. ergy companies also have great infl uence. The project taught schoolchildren to turn off unneces- sary lights and to use water sparingly. If the temperature Expert schoolchildren was too high, it was reported to property management, who lowered the indoor temperature. Schoolchildren in the Ii community have really thrown Minor energy-saving changes became habits that the themselves into energy saving. Informative events on children took home to their parents. “Turning off the energy and environmental issues have been held at all lights when you don’t need them has become a habit at schools in the municipality, with three schools involved home,” says Matias Pakanen. “Earlier I complained that in the EU’s Euronet 50/50 Max project. The idea is that it’s cold, but now I’ve noticed that I can just put on an- schools can keep half of the money they make from other layer of clothing,” says Helga Annala. energy savings for their own use. The project will continue in the form of theme days One of the schools participating in the project is the relating to energy which will be held for all pupils from Ojakylä school whose pupils have become somewhat ex- fi rst to sixth grade. One memorable event was the no- perts on energy saving. A club for 11-13 year olds teaches electricity morning, when the pupils learnt how it felt to children to monitor the consumption of electricity, heat study by candlelight on a dark November day. The project and water in school. The idea was to reduce energy con- is also visible on the school’s walls, where the pupils have sumption through a change in operating methods, ex- collected their energy-saving tips on posters. plains Maria-Riitta Paaso, a primary school teacher at Savings of up to 6,000 euros from three schools have Ojakylä school who is responsible for energy. accumulated, of which the schools will receive half for The best part of the club was using heat and light me- their own use. The Ojakylä school’s share totals hundreds ters, say Helga Annala, Kasper Eriksson, Lotta Järven- of euros. The student body will decide how to allocate the pää, Tuukka Kyllönen, Valtteri Nevalainen and Matias funds during the spring.Ŷ Pakanen. They demonstrate how to use the meter; its

Kasper Eriksson, Matias Pakanen and Valtteri Nevalainen, who are students at the Ojakylä school, know that 21 degrees is enough for an indoor temperature.

FINGRID 1 .2015 | 24 The white stork, a visitor from across the Gulf of Finland

White storks’ droppings cause disturbances on the Estonian grid, disrupting the transmission of electricity. The white stork is held to be a symbol of good luck but does not – and is unlikely to – nest in Finland, since we have little of the stork’s preferred habitat of wetlands and meadows.

TEXT PERTTI KOSKIMIES | PHOTOGRAPH ISTOCKPHOTO

back as we can remember. Storks bene- storks have retained their numbers, fitted from agricultural development and even thrived. There are around and the clearing of forests into pastures 5,000 breeding pairs in Estonia. and cultivated land, since they prey Although white storks make their on frogs, moles, mice, snails, worms, home just across the Gulf of Finland, crickets and other small animals found the species has never nested in Fin- he black and white in open grasslands with short vegeta- land. Each year, approximately five bird is almost the size tion. The white stork is also well-liked hundred white storks visit Finland T of a crane, and is one for controlling the populations of ani- between late April and early June, of the most well-known and mals which can spoil harvests. mostly young and non-nesting in- popular birds in Europe. The Recent developments in agricul- dividuals. They can be seen in open storks have little fear of hu- ture, however, have not benefitted fields in southernmost Finland in mans and nest in church the stork at all. On the contrary, flocks of between 2-10 individuals. It steeples, on top of chimneys drainage, fertilising, compacted earth is doubtful that the white stork will and on transmission towers. due to the use of heavy machinery, choose Finland as a nesting spot any According to records, the monoculture, drainage of wetlands time soon since Finland has few of oldest nests still used today and cattle-farming have all had a the wetlands and meadows that the date from the 14th century. detrimental effect on the living con- stork prefers for feeding. The creation A stork that nests on the ditions of all birds whose habitat in- of a new population would require roof of a house is said to cludes fields. For decades, white stork young birds to take a liking to our bring good luck and fertil- numbers have declined in most west- landscape, which is also unlikely due ity to the household. ern European countries. In the Baltic to the birds’ loyalty to their home. The white stork has lived countries, where agriculture is not Once mature, the storks most like to alongside humans for as far quite as modern as in the south, white nest in their home areas. Ŷ

White stork droppings cause problems for Elering

ach year white storks cause trippings “We encounter trippings when the with new ones at problematic sites. Eto electricity transmission through storks sit on the power lines and leave Thanks to these measures, both dis- the Estonian grid. In recent years, the droppings on the towers’ insulators,” turbances known to have been caused Estonian 110 kilovolt grid has annu- explains Märt Allika, Head of the by the storks and disturbances caused ally recorded 80–130 trippings due to Power System Control Centre at Ele- by unknown factors have decreased unknown causes. Most of these trip- ring. He says that the trippings caused in recent years. pings, taking place on summer nights by the storks are typically short-term White stork nests in towers have also around sunrise, are thought to have and that voltage is quickly restored caused problems for Estonian distribu- been caused by white storks. This view through automation. tion network companies, but the birds is also supported by a study commis- To deter the storks, Elering has used have not nested in Elering’s towers sioned by the Estonian grid company cone-shaped tower covers and at- since they feature a different structure. Elering and carried out by the Tallinn tached “brushes” to the cross-beams. University of Technology. Insulators have also been replaced TEXT SUVI ARTTI

FINGRID 1 ..2015 || 2525 EUROPE’S LIGHTS STAY ON DESPITE ECLIPSE

The solar eclipse that took place on the 20th of March this year put continental Europe’s power systems to the test. Thanks to careful preparations, the solar eclipse did not cause any disturbance to the supply of electricity in Europe.

TEXT MIRA MUURINEN | PHOTOGRAPH ISTOCKPHOTO

he 20th of March was sunny with T clear skies in many places, which Fact provided a good opportunity to test out how well European power systems During a solar eclipse, the Sun, the Moon and the Earth move in line with one another in space. function under exceptional circum- “Viewed from the Earth, the Moon seems to position itself in front of the stances. In the area around southern Sun and casts a shadow on the surface of the earth. The Moon’s orbit is Germany and northern Italy for exam- slightly elliptical compared to Earth’s orbit of the Sun, and this angle deter- ple, where concentration of photovol- mines the path of a solar eclipse and whether it is total or partial,” explains Anne Liljeström from Ursa Astronomical Association. taics is the greatest of all the ENTSO-E The solar eclipse in March was a total eclipse, but could only be viewed as area, the sun shone brightly throughout such from sparsely populated areas in southern Iceland, the Faroe Islands the eclipse. and Svalbard. The partial eclipse was visible throughout Europe, and in Finland the Moon obstructed around 80–90 per cent of the Sun, depending Challenges caused by the eclipse are on your viewing location. related to a significant increase in the The last solar eclipse that could be seen throughout Finland took place on production of solar electricity. Accord- 1.8.2008. ing to statistics, solar energy’s share of the electricity production capacity set for Europe in 2002 was 0.1 per cent, where- as in 2012 it had risen to 10.5 per cent. It had been calculated that on a solar eclipse, and grid network com- clear day the solar eclipse could cause panies used the analysis to agree on a maximum reduction of up to 35,000 joint operating procedures. New tools megawatts, a total of 7.5 per cent, in were taken into use in coordination the overall electricity production of and communication between grid net- continental Europe. According to pro- work companies, for example. Before fessor of engineering physics Peter and during the solar eclipse, telephone Lund from Aalto University, the most conferences were held between con- challenging aspect of a solar eclipse is trol centres, which allowed for real- the sudden change in power, especially time balance management. Nordic grid In Finland the eclipse caused no dis- when the sun becomes visible again on companies had also found methods of turbances to the power system. a clear day. supporting continental Europe during “Around 10 megawatts of solar energy the solar eclipse using Nordic balancing is produced in Finland at best, so the European power systems power and peak load capacity. effects of the eclipse weren’t really felt pass the test In Germany and Italy, automatic outside of detached homes equipped with peak load capacity was sufficient to solar panels,” says Peter Lund. The solar eclipse did not cause any cover the deficiency in solar energy “The issues raised this March may disturbance to European power sys- production caused by the eclipse, and however become topical in Finland in tems, since preparations for the 20th to reduce the change in power, Italy the future, since solar energy is increas- of March had begun in good time ap- also restricted solar energy production. ing in popularity worldwide. Ŷ proximately one year beforehand. The situation on the European grid re- More detailed information on the effects of ENTSO-E had carried out a compre- turned to normal at around midday, the solar eclipse on electricity production can hensive analysis of the effects of the immediately after the eclipse. be found on ENTSO-E’s website at entsoe.eu.

FINGRID 1 .2015 | 26 New landscape tower taken into use along Ring road III In early March, a pair of landscape towers developed by Fingrid, Vantaan Energia Sähköverkot and design agency Muotohiomo were revealed to the public in Vaarala, Vantaa.

he new pair of landscape towers are located in a high- “Roadworks in the area will be completed towards the Tvisibility spot along Ring road III, where it is visible to end of the year, so we won’t be able to see the fi nal look all motorway users driving westbound towards Helsinki of the area until then,” explains Olsson. along the Porvoonväylä road. The landscape towers are The Finnish Transport Agency and City of Vantaa took part of the second phase of a project to renovate Ring care of the large majority of the project’s costs. The land- road III and which entails the renewal of four transmis- scape towers were developed in cooperation between sion towers. Fingrid Oyj, Vantaan Energia Oy, Muotohiomo Oy and “The initiative for the project came from the Finnish TLT-Engineering Oy. Transport Agency. The safety distances for transmission lines were not met in the right-of-way plan, so the lines had to be elevated,” explains Fingrid’s Tommi Olsson, who acted as project manager. Erecting the towers in a frequently-traffi cked spot was challenging and made additionally complicated by other construction and roadworks taking place in the surround- ing area. The landscape towers were eventually constructed one component at a time. “Sometimes space restrictions were quite demanding, but all in all the project went well,” says Olsson. The pair of landscape towers were developed by Fingrid. One of the towers is part of Fingrid’s transmission line, while the other is part of Vantaan Energia Sähköverkot Oy’s transmission line. The area is already home to a ter- minal tower housing Vantaan Energia’s waste-to-energy plant’s 100 kV line, whose appearance as well as the sur- rounding environment and traffi c were taken into account when designing the new tower.

Fingrid in cuses on industry issues and, with over one thousand fol- lowers, is also Fingrid’s most popular social media channel. social media Twitter is mainly used to provide news about the com- pany. Fingrid began to use SlideShare at the turn of last Over the last six months, year and it is where Fingrid’s specialists publish their Fingrid has strengthened presentation material, with the aim of developing its ap- its presence in the social plication as a channel for the publication of presenta- tions. As videos are becoming increasingly signifi cant in media. communications, in recent months Fingrid has invested in the use of YouTube by reorganising the company’s he fi rst social media channel the company decided to videos more clearly by topic. Tuse was Facebook, where it set up a profi le in 2010. Flickr and Instagram are used to share images. Fingrid Since then, it has branched out to LinkedIn, YouTube, began to use the Flickr image service in the spring for its Twitter, SlideShare, Pinterest, Instagram and Flickr. ”Send in your pictures of transmission towers” photo cam- The channels all have their own tasks and areas of em- paign, and all photographs sent in by the public are pub- phasis. Facebook is used to provide information about lished on Flickr. Fingrid’s Instagram account meanwhile is jobs, news and trade fairs. LinkedIn on the other hand fo- more free-format, though still focuses on image sharing.

Interested? You can fi nd Fingrid’s social media channels and related links on the company’s website by clicking Company/Contacts.

FINGRID 1 .2015 | 27 Transparency regulation to increase electricity market data Since the start of the year, a regulation which increases transparency on the European electricity markets has set new obligations for electricity market actors concerning the publication of market data.

ssued by the European Commission, the regulation con- addition, all European grid network companies will publish Icerning an increase in transparency came into effect longer-term consumption forecasts and more detailed data on 14.6.2013 and a website publishing market data was concerning congestion management procedures, reserves opened after an 18 month transition period at the start and the balancing power markets. of 2015. The website can be found at the address https:// Fingrid aims to forward on market data effectively and in transparency.entsoe.eu. a manner that causes minimal burden to market actors. Data Finland and the other Nordic countries have been trail- will primarily be gathered from existing source systems, blazers when it comes to publishing electricity market data. from which Fingrid will forward data to ENTSO-E’s website. New to the Nordics is the hourly production information The transparency regulation, a manual of procedures for production units in excess of 100 megawatts, which is to supplement the regulation and instructions concerning published at a delay of fi ve days. Also new are production the publication of market data can be found on Fingrid’s energies published per hour, by type of production and by website in Finnish at fi ngrid.fi by clicking Asiakkaat > country. Publication takes place at a delay of one hour. In Sähkömarkkinainformaatio.

Long-term work towards Memoirs of transmission zero accidents line professionals to be For several years, Fingrid has paid special published attention to occupational safety and its development. Hannu Ylönen’s memoir ”Ammattina voimajohdot. Lentojätkästä voimajohto- ccupational safety on Fingrid’s sites has improved ammattilaiseksi” will be published in May. Osignifi cantly thanks to an occupational safety devel- opment project launched in 2011. In 2014 the level of oc- lönen’s memoir will cupational safety was higher than in previous years. The Y focus on the trans- combined accident frequency of Fingrid’s personnel and mission line industry’s service providers was 6 (incidents per one million working development phases from hours), and no serious accidents at work resulting in over the late 1940s onwards. 30 days of incapacity to work took place at all. The book outlines the grid Nevertheless, there are still plenty of challenges when network’s phases from it comes to occupational safety. In early 2015 several ac- planning, construction and cidents at work leading to absence took place on Fingrid’s maintenance perspectives, sites, as well as serious dangerous situations which could and features interviews have been prevented by paying more attention to safety with around 120 profes- attitudes, the effi cient fl ow of information and the safe sionals. Ylönen has made planning of work. a nearly 40-year career We are still working to promote safety. In 2015, the oc- with Fingrid and Imatran Voima. The memoirs are pub- cupational safety development project will focus on large lished by Fingrid Oyj. entities, such as safety management, orientation, risk as- sessment, orientation and the development of reporting. All accidents can be prevented through proactive safety work.

FINGRID 1 .2015 | 28 Fingrid’s annual report and fi nancial statements 2014: Major investments continued, fi nances on a stable foundation

he fi nancial year 2014 was a success for Fingrid. De- As the electricity market continues to develop, Fingrid Tspite major capital expenditure in recent years, Fin- has, in addition to its traditional role as a wholesale market grid’s fi nances are on a stable foundation. Profi tability developer, assumed a more prominent role in the develop- development was strong and, from an operational point ment of retail markets. These efforts include enhancing the of view, the year was excellent. The consolidated turnover exchange of information and developing balance services. amounted to EUR 567.2 million and profi t for the fi nan- A concrete example of this is the proposal of a Finnish cial period to EUR 106.5 million. Finland’s national grid data hub for future information exchange, the realisation achieved excellent operational reliability. of which would signify a major step in the digitalisation of Fingrid’s credit ratings remain among the top company electricity retail markets. ratings in Finland. The creation of shareholder value and Fingrid’s annual report can be found in Finnish and in customer focus is well balanced. The company’s dividend English at http://annualreport.fi ngrid.fi . payout capacity complies with the targets set by the own- ers, while grid fees are among the lowest in Europe. Fin- grid is one of the best Finnish companies as a payer of corporate income tax. Grid fees were lowered by nearly 50 per cent in December 2014, and for 2015, it was decided that grid fees will be decreased by an average of two per cent of the 2014 level. Overall, the customers were very happy with Fingrid’s operations. Cross-border connections have been a major focus of capital expenditure during the recent years. In 2014, Fin- grid also invested heavily in the modernisation of the Ostrobothnian grid system and East–West transmission connection. The growth of renewable energy in Finland is apparent in Fingrid as well, with a high number of wind- power-related substation projects under way.

Lines over Ostrobothnia

FINGRID 1 .2015 | 29 Liisa Rintaniemi is MTV News’ meteorologist and will examine the factors behind recent weather conditions in this column.

The non-winter

ast year’s winter was like an unnoticed guest, Sweden and Finland at the end of February served as popping in for a fl ying visit and leaving with- the fi rst herald of spring. out much of a trace. In much of the country But examining large-scale weather conditions only we had to wait until the turn of the year for answers some of our questions. Exactly why this type colder weather, and meteorological spring be- of weather has been so prevalent remains unanswered. Lgan soon after mid-February in the southern and cen- Science is not yet able to give us a certain answer. It tral parts of the country. In the more densely populated could just be pure coincidence. On the other hand, the areas of Finland, winter passed us by in a non-eventful intricacies of the atmosphere, sea, and permafrost are manner, with just small cold snaps and modest snow- only just becoming clear to us. Various factors are con- banks. Those cross-country skis so many of us bought nected to one another with invisible thread, and when a couple of years ago remain confi ned to the shed. Last one changes, it can shake things up and put another winter was characterised by a lack of long-term areas factor in a different position. As the climate undergoes of high pressure, which often bring with them plum- change, it is increasingly important to understand these meting temperatures and the highest national levels of connections. For Finland, the amount of snow and ice electricity consumption. cover in the Nordic countries and surrounding areas is The winter of 2013–2014 was also exceptionally mild proving to be one of the most signifi cant variables. It’s in the majority of the country. The media gives plenty beginning to dawn on us how the drastic reduction of of attention to meteorological oddities which occur in sea ice in the polar region of the northern hemisphere two consecutive years. We start to wonder if it will even affects the climate. Recent studies have indicated that become a permanent occurrence. From a meteorologi- open water in the Barents Sea to the northeast of cal perspective, however, it’s Finland may increase south- irrelevant whether or not the westerly fl ows in Finland and phenomenon in question oc- western Russia, in which case curs in consecutive years; it’s our weather would become far more interesting to check warmer not only because of periods of decades and search the atmosphere, which is al- those for trends instead. ready warming up overall, but Why have recent winters also by our climate becoming been so mild, and where have more maritime. our long periods of sub-zero Although we know that the temperatures gone? Mete- climate is warming up, no-one orologists often explain the can promise that cold periods situation by examining the will disappear entirely. We prevailing weather conditions must continue to prepare for on a larger scale: An area of long periods of extreme cold. low pressure over the North They will still be part of the Atlantic has sent us mild Finnish climate in the future, weather from the Atlantic even if they become rarer. We Ocean. Air fl ow from the west must also remember that while has also provided optimal the last two winters in Europe conditions for the occurrence were mild, North America and of Foehn winds. The warm Asia saw colder than average Foehn wind which blew over winters. Will they swap over the Norwegian mountains to again next year? Ŷ

FINGRID 1 .2015 | 30 Q Competition to the readers of Fingrid Magazine

Answer the questions below and send your reply by fax (number +358 (0)30 395 5196) or mail to Fingrid no later than 31 May 2015. Address: Fingrid Oyj, PL 530, 00101 HELSINKI, FINLAND. Mark the envelope with ”Grid Quiz”. Participants have the chance to win three weather stations. Answers to the questions can be found in this issue.

1. According to calculations by Sweco 5. How much will the municipality of Ii save in one Ympäristö Oy, how many people does the year after changing the heating system in three wind power industry employ in Finland? schools from oil heating to geothermal heat? Approximately 800 people € 40,000 Approximately 2,200 people € 65,000 Approximately 3,100 people € 85,000

2. Who or what represents Finland in the 6. Why are white storks causing a headache comitology process wherein EU member in Estonia? states approve network codes? According to folklore, if a white stork nests Fingrid Oyj on the roof of a house, it brings bad luck to the The Ministry of Employment and the Economy household. Finland’s European Commissioner The storks cause disturbances in electricity transmission as they fly into transmission 3. How many account holders operate in lines. Finextra’s guarantee of origin register? Their faeces cause disturbances if it accumulates on the insulators of transmission 31 towers. 74 270 7. Why ccould the solar eclipse cause problems for the power system in areas which make use of 4. A demand-side management pilot project lots of solar energy? featured in this issue mentions a participating company, but what industry does that company We needed more lighting than usual during operate in? the eclipse, and this increased consumption. Individual countries’ peak load capacity was Baking insufficient to cover the amount of solar Supermarket electricity lost during the eclipse. Frozen storage Changes in power caused by the solar eclipse are sudden and abrupt.

Prizes for the previous Grid Quiz (3/2014) have been sent to the following winners who answered correctly: Jani Pulli, Nakkila; Mikko Vehniäinen, Vaala; Jukka Rajala, Tampere.

FINGRID 1 .2015 | 31 See you in Joensuu! Fingrid will be participating in the Farmari agricultural fair in Joensuu 2–4 July 2015. You are welcome at our stall to discuss transmission lines and their impact on your environment. Our experts will be there for you. Fingrid Delivers. Responsibly.

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