CONFEDERATION OF FINNISH INDUSTRIES EK
Kati Ruohomäki
1 (2)
9 May 2017
NORDIC ELECTRICITY MARKET REALIZES TODAY THE MAJOR PART OF THE NEW
ELECTRICITY MARKET DESIGN PROPOSALS
The Nordic electricity market has been a good example of the well-functioning energy-only
market. Its success has been based on good and voluntary co-operation among Nordic
countries and their national TSO's, and later with the Baltics. The commission's proposals
included many elements already in place in Nordic electricity market.
1 Background
The Commission's Clean energy package (Nov 2016) included amongst the
other things proposals for new rules on EU energy market design "in order to
help energy markets include more renewables, empower consumers, and
better manage energy flows across the EU". Proposals also contain measures
concerning the security of supply and capacity mechanisms.
2 Key content from industry perspective
For the wholesale market, The Commission's proposals include:
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Short term market should be more flexible and responsive to the
variable renewable generations (15 min time resolution instead of one
hour)
No wholesale price caps - scarcity pricing. Prices should reflect the real
value of electricity in time and location and drive investments including
demand-response and storage.
No priority dispatch to all renewable, but a level-playing field. However,
priority dispatch will stay for small-scale renewable installations and
emerging technologies.
More regional level coordination between national TSO's. Regional
operation centres (ROC) will be established with specific responsibilities
and tasks.
A CO2-emission threshold of 550 g/kWh for those plants which
participate on capacity mechanism schemes (also strategic reserves).
For the retail markets, the Commission proposes to improve for instance
consumers' rights for better information, smart meters and self-production.
CONFEDERATION OF FINNISH INDUSTRIES EK
Kati Ruohomäki
2 (2)
9 May 2017
3 Current status
Commission's proposals for the Electricity Market Directive (recast) and
revised Electricity Regulation are under discussions in the Parliament. The
rapporteur in the parliament's ITRE committee is Krišjānis Kariņš (EPP,
Latvia). Two other proposals concerning ACER- and Risk preparedness
regulation are also in the parliament at the present. The Council will bring the
electricity market legislation up to the deeper discussion during the Estonia
presidency (July-December 2017).
4 Industry key messages
EK welcomes warmly the Commission's proposals on the whole, as we share
the vision of the free flow of the electricity in the Europe. We are slightly
concern how the new rules and further regulation will influence on the
competition. Is there a risk that the flexibility of the market structures will
decrease especially in the forerunner markets like Nordic one? The
commission's proposals included many elements already in place in Nordic
electricity market, such as a demand participation, a well-functioning crossborder electricity trade (some bottlenecks still), no priority dispatch for RES, no
price regulation, nearly 100 % coverage of smart meters among consumers,
etc.
On the other hand, EK has concerns on having scarcity pricing without price
caps in the day-ahead market, because this could increase significantly the
hedging costs. In intraday market situation is different, and no price restrictions
are needed there.
For capacity mechanisms, there should be no overlapping threshold of CO2
emissions in place the EU's electricity generation, which is already covered by
the Emissions Trading Scheme ETS. In addition to this, the CO2 emissions
level is irrelevant for the strategic reserves: for example, in Finland they have
not been started since 5 years.
5 Contact information
Confederation of the Finnish Industries EK (www.ek.fi) represents the entire
private sector and companies of all sizes in Finland.
Kati Ruohomäki, EK Helsinki
Salla Ahonen, EK Brussels' office
+358 (0) 40 767 5684
[email protected]
@KatiRuohomaki
+32 (0) 495 56 22 95
+358 (0)50 483 7229
[email protected]
@ahsalla