End of the line for long-term collaboration

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Electricity imports from Russia have stopped. Finland is likely to become self-sufficient in electricity as soon as next year.

First, a glimpse back in time. Finland and Russia laid the foundation for energy trading in the 1960s when Enso-Gutzeit began importing electricity from the Rouhiala and Enso power plants in Russia with its own 110-kilovolt transmission line connection to Imatra. The first heavy-duty 400-kilovolt link to the Soviet Union was built in the 1970s.

In 2003, the commercial import capacity on the 400-kilovolt interconnectors was increased to today’s level of 1,300 megawatts, and for several years, the import volume remained steady at around 11 terawatt-hours. Russia satisfied more than 10 per cent of Finland’s electricity needs. In 2006, some parties were working on a project known as the Kotka submarine cable, which would have almost doubled the imports of Russian electricity if it had been built.

Electricity imports decreased sharply in the 2010s when a capacity fee was introduced in the Russian electricity market, raising the price of electricity in Russia, especially in the daytime.

Finland is not dependent on Russian electricity.

Russian imports have accounted for a significant proportion of Finland’s electricity purchases in the past years. But today, we can relax in the knowledge that Finland is not dependent on Russian electricity. And we are heading further in the right direction: Finland is likely to become self-sufficient in electricity as soon as next year.

Against this backdrop, the halt in electricity imports, which began at 1 am on 14 May 2022, was not a dramatic event for us at all. The decrease in supply will raise the price of electricity in Finland somewhat, but the lack of supply will soon be addressed.

In public discourse, some parties forged a direct link between the discontinuation of electricity imports and Finland’s application to join NATO, but the truth was less exciting than this: trading stopped because of Western sanctions that cut off the payments for the electricity sold on the market. We were, therefore, acting in line with the Western playbook.

On 24 April 2022, before imports were cut off altogether, Fingrid restricted the transmission capacity in the Russian interconnectors to 900 MW, down from the maximum of 1,300 MW, for reasons of system security.

Both parties have benefited from their long history of electricity trading. Along the way, functioning electricity markets have been built on both sides of the border – different markets due to different approaches. The 400 kV interconnectors across the national border connect two completely different electricity market models. Consequently, the procedures for trading between the countries were developed in a positive spirit of cooperation.

At a stroke, this cooperation came to an end when Russia launched its senseless invasion of Ukraine.

The future looks bleak: once trust is lost, it is hard to rebuild. Our long-term collaboration has reached the end of the line, and there is no continuation on the horizon.

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