Fingrid as a market facilitator

Electricity Market Day, 28 April 2015

Jukka Ruusunen, President & CEO, Fingrid Oyj

Why?

Functioning of physical power markets is conclusively dependent on

the activities of the transmission system operators!

Basis of the foundation of the company!

Electricity Market Act:

"Transmission system operator must

develop its activities so that prerequisites

for efficient markets are secured."

European requirements for transmission system operators

Promote market

functioning

Must be members

of ENTSO-E

Cooperate closely in:

transmission capacity

calculation and

allocation, congestion

management, balance

management, reserve

trade, publication of

market information,

etc.

Plan together the

transmission grid

according to market

needs

Establish market

places in

cooperation with

power exchangesIn these issues to follow

detailed common grid codes!

Unbundled from

generation and

sales

Fingrid creates framework for efficient operation of electricity markets

Investments• Cross-border connections and internal

national connections

• Connection of generation and demand

into the market

Market operation• Transmission capacity allocation

• Congestion management and timing of outages

• Balance service

• Publishment of market information

• Data exchange and DataHub

Development of electricity

markets• Improvement of the market mechanism

• Regional integration

• International harmonization of market rules

• Cooperation of power exchanges

Seeking a balance!

Security of supply vs markets

"Security of supply is better, if

we give less transmission

capacity into the markets."

National interests

"Why should I build more

transmission capacity into a

country that has a higher

electricity price?"

Customers' conflicting

interests

End users: "Price down."

Generators: "Sufficient price

from investment point of view."

Company vs society

Negative incentive: congestion rent

an income for a transmission system

operator. Market promotion creates

costs.

Execution of the market perspective

requires active management!

POWER

SYSTEM

OPERA-

TIONS

ICT HR AND

COMMU-

NICATI-

ONS

Personnel and competence

Fingrid Oyj

Adequacy of transmission system

System operation

Promotion of market functioning

Finance and business development

Customers

ASSET

MANAGE

MENT

Organization ...

GRID

SERVICES

AND

PLANNING

MARKETS FINANCE

AND

TREASURY

... together with measurement and bonus system

Strategic meters – part of the bonus system for everybody working at Fingrid!

Fingrid benefits from efficient operation of markets

"The invisible hand of the market"

works for Fingrid:

• balancing supply and demand

• efficient use of cross-border connections

Procurement from international

markets at a market price

• loss power

• balance power and reserves

Future

What is Fingrid's role

as a promoter of

wholesale markets?

What is Fingrid's role

as a promoter of retail

markets?

What happens if the

"invisible hand" is not able

to balance the markets?