Fingrid will raise the balance service fees for balance responsible parties from January 2023. The increase is due to a sharp rise in the costs of power system reserves in a highly unusual market environment.
As of 1 January 2023, the volume fee for production and consumption by balance responsible parties will rise to EUR 1.7 €/MWh. Other balance service fees will remain unchanged.
The costs of automatic frequency restoration reserve capacity have soared. In addition, the extraordinary situation in the energy market has increased the procurement costs of balancing energy market (the manual Frequency Restoration Reserve (mFRR)) and reserves activated automatically in response to frequency changes.
Fingrid maintains balance in the power system using various types of reserves purchased in different marketplaces. The balance service fee reflects the costs of reserves that adjust the quality and frequency of the power system. The most expensive is the automatic Frequency Restoration Reserve (aFRR), for which Fingrid purchases reserve capacity for both up- and down-regulation. Fingrid currently purchases the aFRR in national markets where the prices have been very high at times.
Procurement of the automatic frequency restoration reserve in 2022 >
“Fingrid aims to increase supply in the reserve market from different sources and expand the automatic frequency restoration reserve market, making it a pan-Nordic market instead of a solely national one. This is expected to lead to lower costs for power system reserves. Participating in the reserve market is a new opportunity for many electricity producers and consumers. We are waiting on the authorities to approve the introduction of a Nordic market” says Asta Sihvonen-Punkka, Executive Vice President at Fingrid.
The present change to the balance service fee will not affect the company’s other service prices. Fingrid previously announced its intention to waive some of the grid service fees scheduled for 2022 and 2023. Fingrid was able to make this decision because it has accrued record congestion revenue, which can cover the higher costs of operating the main grid and waiving the grid service fee. The regulations applying to Fingrid prevent it from using the accrued congestion revenue to offset balance service fees.
The balance service fees will take effect on 1 January 2023 and remain valid indefinitely. The balance service fee and the costs of balance services will be updated if necessary to ensure that the fees cover the operating costs.
Jani Piipponen, Manager, balance services, Fingrid, tel. +358 (0)30 395 4186
Email addresses are in the form [email protected]
Fingrid magazine: The energy revolution is reflected in the growing need for reserves and the costs of acquiring reserves > (in Finnish)
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