Report on smart grids´ potential for the electricity market

The Finnish power system is facing significant changes. Increased use of renewable energy and weather-dependent variable production changes the operating logic of the power system and the electricity market.

Electricity consumption and production need to be balanced second by second. Currently, electricity generation is mostly regulated to meet consumption, but, as the amount of variable generation increases, consumption also needs to be regulated more and more in order to maintain equilibrium.

This complex whole, comprised of various distributed resources, cannot be managed without automation and more effective information exchange between the different parties. A smart electricity system, also referred to as a smart grid, serves as a platform through which variable production and consumption can be matched in a cost-effective manner.

The Ministry of Economic Affairs and Employment established in September 2016 a working group to explore the potential of smart grids for the electricity market. Its goal was to explore and propose concrete measures through which smart grids can facilitate the ability of customers to actively participate in the electricity market and generally promote the maintenance of security of supply.

The group’s chairman was Senior Adviser Tatu Pahkala from the Ministry of Economic Affairs and Employment. The broad working group contained representatives from both electricity suppliers, distributors and consumers as well as government authorities and research institutions.

The working group submitted its final report on 30 September 2018. 

For more information; tatu.pahkala(at)tem.fi