Government decree on electricity supply settlement to improve customer service and to make it easier to change suppliers

The Government issued a new decree on electricity supply settlement and measurement on 12 August 2021. The decree lays down provisions on the 15-minute balance settlement period, the transition towards the so-called single price model in the electricity market, and the changes in electricity supply settlement caused by the introduction of Datahub – a centralised information exchange system for the electricity retail market.

In addition, the decree lays down rules on the remotely read smart meters, which will be introduced during this decade. 

Datahub’s services will begin on 21 February 2022. The introduction of Datahub will have an effect on electricity supply settlement in distribution networks and the retail market processes in electricity trade. 

Datahub will store data from electricity metering points and synchronise electricity-contract processes, making it easier and more efficient to process data. The retail market will run more smoothly and the process of changing suppliers, for example, will become simpler. At the same time, electricity suppliers’ services to consumers will improve. It will be easier and faster to change suppliers and finalise electricity contracts, there will be less errors in the market processes, and it will be easier to have more than one metering point on the same electricity contract. 

At the same time, Datahub will facilitate the development of more diverse services for the different parties in the electricity retail market. For example, Datahub will enable energy communities in all distribution networks to distribute electricity to their shareholders. Consumer data protection will also be improved. It will be easier to manage data protection and data security in a centralised system compared to a situation where each electricity supplier and distribution network operator have their separate data systems.

The rules on maintaining and settling the balance between production and consumption of electricity by market participants in the EU’s internal market will be gradually harmonised during the 2020s. The reforms aim to improve market efficiency and the use of resources in the production and consumption of electricity, to allocate the costs caused by deviations to this balance to responsible market participants, and to improve the use of interconnectors. 

As part of these reforms, the Nordic electricity market will transition to the so-called single price model on 1 November 2021. In the single price model, there will be no separate balances for production and consumption of electricity for the balance responsible party. 

In addition, the EU intends to move to a 15-minute balance settlement period in the next few years. The settlement period currently used in Finland is one hour. The Nordic electricity market will transition to a 15-minute settlement period on 22 May 2023. Because of the shorter balance settlement period, the measurement of electricity consumption will also gradually shift to a 15-minute periods. 

The decree will also include provisions on the next-generation remotely read electricity measurement equipment and data transmission systems. The useful life of current measurement equipment will most likely end during this decade. The decree lays down rules on the functional requirements for new measuring instruments and systems. The provisions will not apply until May 2023, so that grid operators and manufacturers of measuring instruments have sufficient time to prepare for the changes without having to shorten the useful life of the current equipment. In Finland, the average technical life of remotely read measuring instruments is about 13 years. 

The functional requirements proposed for the measurement systems are based on the proposals of the Smart Grid Working Group in 2018, which were updated and specified on the basis of discussions held by the Ministry of Economic Affairs and Employment with the expert group in 2019–2020. The decree also implements nationally the rules on smart metering systems and their functionalities as laid down in the Directive on Internal Market in Electricity. 

Inquiries:
Arto Rajala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4828
Tatu Pahkala, Senior Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4217
Kanerva Sunila, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 476 3576 (from 23 August)