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eSett off to a great start

Nordic energy market collaboration has yet another success story in the making. Since 2017 market imbalance settlement and invoicing in Finland, Sweden and Norway has been managed by one company: eSett. Jointly owned by the transmission system operators Fingrid (Finland), Svenska kraftnät (Sweden) and Statnett (Norway), eSett received a new addition to the team as Denmark’s Energinet became one of the owners of the company.

Founded already in 2013 with the aim of establishing a joint imbalance settlement for Finland, Norway and Sweden, eSett provides timely and reliable settlement services to its customers. At this time, over 1,000 market actors in Finland, Norway, and Sweden participate in the settlement. Coordinated Nordic imbalance settlement yields plenty of synergies in changing times.

Jukka Ruusunen, CEO of Fingrid, is quite pleased with the start of the new company.

“Previously, each TSO had to perform its own imbalance settlement using their own systems. Now we have one system,” he says, citing speed and effectiveness as key improvements under the new system.

Thomas Egebo, Energinet, Jukka Ruusunen, Fingrid, Auke Lont Statnett and Lotta Medelius-Bredhe, Svenska kraftnät.

Lotta Medelius-Bredhe, CEO of Svenska kraftnät, agrees that using the same settlement model in all Nordic counties is an “important factor” in facilitating a common Nordic end-user market.

“This has not been accomplished 100 % yet, but further harmonization is going on,” she adds.

No More Doubt

Auke Lont, CEO of Statnett, says that the Norwegian TSO is also “very happy” with the service provided by eSett so far. He admits, however, that the Norwegian market participants were a bit skeptical in the beginning, especially after the delayed start.

“Now I am hearing the opposite and my impression is that customers are quite satisfied,” he says, adding that delivering reliable settlement services is a very important part of a well-functioning market.

According to Lont, having one imbalance settlement entity and one set of rules in the Nordics makes operations easier, and will (hopefully) increase competition and innovation.

Lately, the European operating environment has been – and still is – going through major changes. According to Ruusunen, the changes in EU regulations will shape the energy sector and especially imbalance settlement for years to come.

The Evolution Solution

In the near future, for example, the balance service model will change and there will be just one-balance instead of different balances for consumption and production. In addition, there will be new market roles such as datahubs that will introduce changes in the settlement operations or change the way of communicating within the market.

“We’ve been very proactive in changing with the times and feel that we’re now in a great position to face the future,” Jukka Ruusunen says, adding that there’s “even more potential” in eSett than was originally estimated.

“We’re receiving notable benefits, since – for instance – there’s no need to perform four separate upgrades to the systems in reaction to regulation changes.” One such change is moving from a 60-minute imbalance settlement period and market time unit to 15 minutes.

Big Changes, Wider Shoulders

Auke Lont agrees that the TSOs are facing big changes in the energy market in the upcoming years. “We expect eSett to be ahead and adapt to the changing requirements and enable a well-functioning and efficient settlement also in the years to come.”

Lotta Medelius-Bredhe notes that after the first successful year, eSett has to consolidate its internal processes and continue to improve efficiency.

“From a broader Nordic TSO perspective, eSett could be a vehicle for new business areas.”

Furthermore, the CEOs all add that the Nordic Balance Settlement provides a great example of stellar TSO cooperation.

“The cooperation is voluntary with the purpose of bringing benefits for the market actors and TSOs”, Medelis-Bredhe points out.


Energinet excited to join eSett

Thomas Egebo, CEO of the Danish Energinet.

Danish TSO Energinet is the “new kid on the block” in the Nordic imbalance settlement. Energinet CEO Thomas Egebo says that eSett is a very service-minded organization and the level of cooperation through-out the joining process has been very good.

“We are looking forward to being a part of eSett and hence the future cooperation on how we can continuously improve the imbalance settlement services towards the market parties,” Egebo says.

According to Egebo, the biggest benefits of the joint imbalance settlement service relate to the harmonization of the Nordic market processes, lowering the entry barriers for the Market Parties as well as fostering increased competition.

“This way, it is also a natural step in our increased Nordic cooperation.”

Looking ahead, Egebo expects that eSett will continue to perform efficient settlement to the satisfaction of the Nordic market parties. “Also, we will gain new knowledge on how to improve the quality requirements for imbalancing settlement in our daily work.”


What is imbalance settlement?

  • determines the electricity deliveries and a financial balance between the parties operating in the electricity market after each delivery hour
  • based on a hierarchic imbalance settlement model and on chains of open deliveries between different market party roles
  • the calculations carried out within imbalance settlement are based on hourly energies which are obtained from hourly energy measurements, load profiles, production plans, and fixed deliveries resulting in a weekly invoice
  • instead of the hourly balance, a transition to new, 15-minute balance is required by the end of 2020 by all EU Member States
  • since 2017, eSett has provided a common Nordic imbalance settlement service harmonizing operational preconditions for all Nordic balance responsible parties, regardless of the country.


Four Musketeers

Minnakaisa Ahonen, CEO of eSett, says that the hard work that was put in the realization of the company has really paid off. “We’re off to a great start and clearly see that we can provide value for our owners,” she says, pointing to the regulatory demands of the EU.

Minnakaisa Ahonen, CEO of eSett

Ahonen notes that for the continued success of eSett, it is vital to understand the process of how balances are created every moment across the electricity market. The company wants to offer its customers “simplicity, effectiveness and reliability” by covering the task of imbalance settlement with the highest degree of professionalism.

Ahonen is also quite pleased that the Danish TSO, Energinet, joined the Nordic imbalance settlement in May 2019, becoming, as a consequence, one of the owners of eSett.

“We consider the addition of Energinet as a sign of a job well done,” she says, noting that now all the Nordic countries can face the coming changes as a united front.

Moving onwards in a rapidly changing operating environment, it is imperative that eSett maintains the capability and foresight to adapt to changes, while always remaining focused on its harmonization goals, says Ahonen.

“Equally important are our continuous efforts to digitalize the business and secure our operations,” she adds.


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