Finland releases network regulation roadmap to 2020


Helsinki, Finland — (METERING.COM) — October 1, 2012 – Finland’s Energy Market Authority has recently release the final Roadmap 2020 report, setting out a development strategy for the regulation of the reasonableness of pricing in electricity distribution network operations through 2020.

According to the Roadmap 2020, the four key development trends with the most significant impact on the development of electricity network operations by 2020 are:

  • Growing need for investing in electricity networks
  • Growing dependency on electricity
  • Increasing emission-free electricity generation
  • Increasing and ‘Europeanized’ regulation.

In addition, other development trends and events may also contribute to network operations, of which the most probable, with the most extensive impacts, is the introduction of smart grids.

According to the Roadmap 2020 the regulation model currently applied by the Energy Market Authority has been functioning well and has encouraged investments by electricity network companies. However, various development areas were detected to improve the current model. The most important of these is increasing the predictability of the regulation model in order to ensure predictability of the operating environment of network companies and, on the other hand, determining the long term targets of the model.

Based on the views of Gaia Consulting Oy, the current regulation model can be continued or it is possible to move towards a yardstick model that takes sustainable development into account. However, this requires that, in addition to the quality issues, the model should take into account the emission reduction targets set for the energy systems. A future regulation environment must create clear incentives to promote renewable energy generation and the introduction of demand flexibility.
In conclusion the Energy Market Authority will apply the regulation methods based on the current regulation model in the current regulatory period through 2015. Further work will be undertaken towards applying the yardstick model by 2020.

In the current period starting this year, the focus is on incentives for product development and investments in smart metering and smart grids. Previous focuses have been on a reasonable return for owners, productivity, and incentives for quality and security of supply.