Legislative amendments to boost integration of increasing electricity generation and consumption into electricity grids
On 8 May 2025, the Government submitted to Parliament a proposal for acts amending the Electricity Market Act and sections 12 and 96 of the Natural Gas Market Act. The main objective of the proposal is to facilitate the integration of the increasing electricity generation and consumption loads into the transmission system and high-voltage distribution networks.
The clean transition projects, increased hydrogen production and the production of green steal, for example, are expected to significantly increase electricity generation and demand by 2040. At the same time, electricity consumption and generation are becoming increasingly separated into different parts of Finland. The growth in onshore and offshore wind power increases the production capacity especially in the Ostrobothnian regions, while energy consumption is growing the most in southern Finland.
"Our society is rapidly becoming electrified, and investment plans across various industrial sectors are increasing the need to develop the electricity system. With this government proposal, we are strengthening Finland’s competitive advantage in clean growth. It is also crucial to maintain Finland as a single electricity price area," says Minister of the Environment and Climate, Sari Multala.
Amendments to the implementation of high-voltage grids
A key objective of the proposal is to promote the development of the most robust 400-kilovolt local and regional electricity networks, as well as to encourage the close co-location of electricity production and consumption.
Distribution network operators could operate local and regional high-voltage distribution networks of 400 and 220 kV. In future, the transmission system operator would focus on the development of the national, interconnected electricity transmission system and interconnectors across the national borders. To promote the utilisation of offshore wind power, the exclusive economic zone of Finland would be added to the area of responsibilities of the transmission system operator responsible for the national electricity system.
A provision would be added to the Electricity Market Act that would also enable the distribution network operators to develop networks or parts of these that bring together separate generation entities. Subject to certain conditions, however, electricity generators could also construct and operate jointly owned connection networks for electricity generation without an electricity network licence.
The provisions concerning the licences for electricity network operations would be amended so that, regardless of the size of the power plant, no licence would be required for the distribution of electricity directly to use via a separate line.
To ensure the reliability and cost-efficiency of the electricity system, the integration of oversized connections into the electricity system would be limited in the future.
Flexible connection contracts possible in electricity grids
Flexible connection contracts would provide faster access to the grid for customers and enable more efficient use of the grid capacity while the system operator is strengthening the grid. As a permanent solution, flexible connection contracts would reduce the need to invest in the grids.
With these amendments, the land use required for building grids would decrease. Parallel 110 kV transmission lines could locally be replaced by one transmission line with a voltage of 400 kV. The amendments would encourage to place electricity consumption and production close to each other. Indirectly, they would have positive impacts on the clean transition as they would facilitate and accelerate the integration of renewable energy into the grid. The aim of the amendments is also to curb the costs to electricity end-users arising from the necessary development of the electricity system.
The Finnish Energy Authority would be authorised to provide binding preliminary decisions concerning the licences required for electricity network operations. The authority to make decisions on project licences for cross-border transmission lines and natural gas pipelines would be transferred from the Ministry of Economic Affairs and Employment to the government plenary session.
The proposed acts are intended to enter into force as soon as possible.
Inquiries:
Arto Rajala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 064 828