Legislative changes enabling a joint natural gas market between Finland, Estonia and Latvia will enter into force on 1 March 2019
The interconnected natural gas markets of Finland, Estonia and Latvia will open to competition in early 2020 once the Balticconnector pipeline connecting the Finnish and Estonian gas networks is up and running. The Government proposes that the amendments to the Natural Gas Market Act enabling this reform be ratified at the presidential session on 22 February 2019.
The Act amending the Natural Gas Market Act and the Act amending section 10 of the Act on the Control of the Electricity and Natural Gas Market will enter into force in early March.
The amendments include new provisions to allow discounted transmission tariffs for international connections to end the isolation of Finland’s natural gas market as well as to create regional entry and exit systems with two or more EU Member States. Furthermore, the Act will lay down provisions on the power vested in the Energy Authority to fix interconnection transmission tariffs and conditions during a transition period.
The reform will add more specific provisions to the natural gas market legislation to support the development of a regional common market. This means expanding the TSO’s rights and the Energy Authority’s powers in order to further develop a regional tariff arrangement and a regional entry and exit system.
In conjunction with the opening of competition, the Finnish, Estonian and Latvian gas transmission system operators (TSO) signed an agreement last week (14 February) on the removal of transmission tariffs and compensation of transmission costs between the countries. Gasum Corporation and Baltic Connector Oy represented Finland in the negotiations.
The ITC (inter-transmission system operator compensation) agreement between the transmission system operators of the three countries will remove gas transmission tariffs on borders between them, and will impose an equal feed-in charge on all import points starting from the beginning of 2020.
Arto Rajala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 4828