There has not been sufficient electricity transmission capacity on the border between Finland and Sweden this year, according to a release from Fingrid Oyj. The physical transmission capacity has been approximately the same as in the previous years, but the market would have required clearly more transmission capacity. The volume of transmission capacity grew in November, when some of the capacity of the new high-voltage direct current link Fenno-Skan 2, which is in trial operation, was made available to the electricity market.

The lack of commercial transmission capacity has occasionally been reflected in the segregation of the price of electricity between Finland and Sweden. Finland and Sweden have been of the same price area in only 75 percent of the time between Jan. 1 and Oct. 31. Transmission congestions impede competition and the efficient functioning of the Nordic electricity market.

“All available transmission capacity has been given to the market. Also, every effort has been made to plan the outages caused by construction work in a manner that disturbs the electricity transmissions as little as possible. In the early part of 2011, Finland exported electricity to the other Nordic countries due to the poor hydropower situation in them. Abundant rainfall in Norway and the warm autumn in Finland have turned the direction of electricity transmissions exclusively to Finland,” said Fingrid’s President Jukka Ruusunen in Fingrid’s system security seminar.

In his speech, Jukka Ruusunen pointed out that the situation with the electricity transmission capacity has already improved from that prevailing in the early autumn. The capacity of Fenno-Skan 2, the new high-voltage direct current link between Finland and Sweden, has been made available to the electricity market as of Nov. 15 during the trial operation period of the cable link. The volume of transmission capacity given to the market is assessed on a daily basis within the limits allowed by the trial operation situation. At best, the additional capacity is 800 MW. The trial operation period of Fenno-Skan 2 is projected to continue until Dec. 15, followed by the normal commercial operation of the link. Fenno-Skan 2 will increase the transmission capacity between Finland and Sweden by 40 per cent.

The division of Sweden into four bidding areas has changed the situation between Finland and Sweden as more electricity is transmitted through Finland to Southern Sweden. The geographical distribution of electricity production and consumption in Sweden is uneven: much of the electricity is generated in the north while consumption focuses on Southern Sweden. The transmission connections within Sweden have become inadequate, and the capacity of the Swedish transmission grid has not matched up to the needs of international electricity trade. By dividing Sweden into bidding areas, the Nordic market functions more efficiently.

“The procedure applied from the beginning of November has worked much in the way we anticipated. The price of electricity in the three northernmost bidding areas in Sweden and in Finland has been the same for the most part. The price in Southern Sweden has segregated from the price in other parts of Sweden in approximately half of the time. As expected, the prices in Southern Sweden and Eastern Denmark have also been consistent. The situation in Sweden has been complicated by problems in the Swedish nuclear power capacity,” Jukka Ruusunen stated.

Finland continues to rely on imported electricity

The system security seminar also discussed the power situation in Finland in the coming winter. The past winter was very cold, and the hourly electricity consumption went up to 14,900 MW on Feb. 18. As a result of the uncertain economic situation, the increase in electricity consumption appears to have ceased again, and therefore the peak consumption of the coming winter in corresponding circumstances is expected to remain at the same level as this year.

Finland continues to be dependent on electricity imports. Electricity is obtained from Sweden, Russia and Estonia to cover the deficit of 1,700 megawatts. The situation is now better than in the past winter, because the Fenno-Skan 2 connection will add significantly to the transmission capacity from Sweden. The domestic electricity generation capacity in Finland is 13,300 megawatts, and the highest consumption is 15,000 megawatts.

The shutdown of German nuclear power plants has reduced the electricity production capacity in Continental Europe. It may be necessary to transmit replacing electricity over long distances. The reduced supply is reflected in the price of electricity. In terms of system security, the situation is under control in normal conditions, but if the winter is extremely cold, Germany will have to adopt special recourse.