As Russian electricity is reaching a new low in the Nordic market, Finnish grid operator Fingrid considers to turn the tide and start exporting Nordic power to Russia.
Finland, which until recently imported up to 10 percent of its electricity from Russia, is experiencing a significant cut in its power dependence of the eastern neighbor. Since 2011, power imports have dropped to about a third of the previous 12 terrwatt-hour level and further reductions are in the pipeline.
One main reason behind the trend is the mounting tariffs imposed by Russian authorities on export electricity, Bloomberg informs. As a result of the capacity tariff of roughly €25 a megawatt-hour imposed on exports from August 2011, it is no long as profitable as before for the Russian export power monopoly OAO Inter RAO UES to sell power to Finland.
In addition, the base prices for electricity sold at Nordpool, the Nordic power market, and the Russian ATS market have over the last year been increasingly similar, making it less interesting for the Nordic countries to buy Russian power.
The market changes now open for a surprising shift in the power trade, with Fingrid considering exports of Nordic electricity to Russia. For the time being, direct trade is possible only from Russia to Finland. However, trade rules for two-way trade are currently under development, Fingrid informs. According to YLE, Finnish exports of power to Russia might start already in 2014.
The transmission lines between Russia and Finland have a capacity of 1,3 GW.
The same shift in the market conditions is felt along the Norwegian-Russian border, where Statnett, the state-owned grid company, is losing interest in the construction of a new cross-border transmission line. As previously reported, Statnett has been planning a 250-300 MW cross-border line to Skogfoss in the Pasvik valley from where it could import more Russian power. Electricity consumption in Norway’s northernmost county of Finnmark is increasing, while there is a large surplus of electricity on the Kola Peninsula, due to both the four reactors at Kola NPP and the many hydropower plants in the region. If built, most of the electricity imported through the line would have come from the hydropower stations in Russia’s border area. Part of it could also have come from the nuclear power plant located further south on the Kola Peninsula.