GENERATION

There are about 120 companies engaged in electricity generation and about 550 power plants in Finland. Even though the number of companies responsible for electricity generation is as large as this, generation has been concentrated mainly in two groups. Fortum accounts for 40% and Pohjolan Voima for one fifth of Finland’s electricity generation. In addition, electricity retailers and energy-intensive big industry are significant electricity generators. The big industry also owns most of the Pohjolan Voima Group.

(source: Finnish Energy Industries)

RETAIL MARKET

Electricity retail is mainly carried out by local supply companies. They sell electricity that they have generated or purchased from the wholesale market. In recent years, also the major electricity producer Fortum Power and Heat, together with many other actors, has become interested in electricity retail. By acquiring electricity companies, they have conquered a significant share of the electricity retail market. After the deregulation of the Finnish electricity market, the foreing companies, the Swedish companies Vattenfall and Graninge and the German company E.ON, have entered the Finnish electricity market.

Electricity sales do not call for a licence – anyone can become an electricity retailer. There are currently about 70 electricity retailers in Finland. In addition, a number of electricity retailers and dealers that are independent of the traditional electricity companies have emerged in the electricity sector.

Electricity sales are no longer subject to licence. The regionally exclusive right to sell electricity has been removed from electricity retailers. To safeguard the interests of small electricity users, the electricity retailer having a remarkable market power within the area of responsibility of a distribution net operator shall deliver electricity at a reasonable price to the consumers and to other electrciity users whose main fuse is maximum 3x63 A and annual consumption is maximum 100.000 kWh (obligation to deliver). The retailer's terms of retail sale and prices shall be publicly available to the customers encompassed by the retailer¹s obligation to deliver. The Energy Market Authority supervises electricity sales to customers encompassed by the obligation to deliver and the related prices.

ELECTRICITY EXCHANGE

There is a new actor in the Nordic electricity market, NordPool – the Nordic Power Exchange, which increases the number of sources of electricity supply for large-scale users and retailers. Only members of the NordPool can trade in electricity at the power exchange. Among the members of the power exchange are electricity producers, electricity companies and industrial enterprises from Finland, Sweden, Norway and Denmark as well as some other countries.

The power exchange forms a market price for electricity, which is used as a reference price while drawing up electricity sales contracts. At the NordPool Power Exchange, actors trade in so-called spot electricity to be delivered during the next 24 hours. The actors can also trade in electricity derivatives. Finland forms a separate price area at the Nordic Power Exchange.