Natural gas market
The key goal of energy policy is to ensure a secure and inexpensive energy supply. In Finland, as in other countries, natural gas plays a role in meeting this objective. National climate goals support the position of natural gas in Finland’s mix of energy sources.
Improving the efficient functioning of the natural gas market
The European Union aims to create an internal European market for natural gas. With the Natural Gas Market Act (508/2000), which became effective on 1 August 2000, Finland has begun enforcing Directive 98/30/EC of the European Parliament and Council, regarding common rules for the internal natural gas market. This directive allows Finland to derogate from the obligation to liberalise its natural gas market, as long as the country only has one main supplier of natural gas and is not connected to the European Gas Network.
The purpose of the Natural Gas Market Act is to improve the efficiency of the market while preparing the industry for an integrated, European natural gas market. The law allows major consumers of natural gas – those purchasing a minimum of five million cubic metres per year – to trade between themselves in natural gas purchased from an importer operating in Finland. A special marketplace has been established for this secondary market.
In order to enforce the new natural gas internal market directive, issued in 2003, the Finnish Government introduced a bill to the Parliament on 24 June 2004 for amendment of the Natural Gas Market Act. Under a new Act from 2003, the natural gas market authority must confirm the calculation methods for the pricing of natural gas network services, as required by the directive, prior to their introduction. Since then, the appeals process with respect to the authority’s decisions has been two-tiered.
A new directive, approved in 2009, introduced changes to the rules applied in the natural gas market.
Expansion of the natural gas usage area
The natural gas grid covers the south and southeast of Finland. In this area, natural gas accounts for approximately 30 per cent of the fuel used for combined heat and power generation. Further development of Finland’s natural gas market would require an extension of the natural gas grid. Increasing the use of natural gas is vital to meeting the objectives set under climate policy and to ensuring the profitability of new natural gas import connections.
A key project for increasing the use of natural gas involves the extension of the natural gas grid to western Finland and the supply of natural gas to the Turku region. The construction decisions and schedule of Gasum Oy, the Finnish natural gas grid company, will be finalised once agreement has been reached on the use of natural gas by the area’s largest consumers.
The Ministry of Employment and the Economy handles redemption permit applications for natural gas pipelines. Such permits are granted by the Government. The Ministry of Employment and the Economy is the authority issuing statements on the related land use and planning issues.
Securing the procurement of natural gas
A long-term objective for the development of the Finnish energy market is to increase the options for natural gas procurement. This is essential to ensure supply security and the efficient functioning of the natural gas market. The Energy Market Authority has placed responsibility for the technical performance and operational reliability of the natural gas transmission system with Gasum Oy.
The potential for developing and diversifying the procurement of natural gas for Finland has been reviewed in various reports.
The Baltic Energy Market Interconnection Plan, launched by the EU Commission in 2008, examines the possibilities to construct a natural gas pipeline between Finland and Estonia, and the possibility to construct a shared LNG terminal for Finland and the Baltic countries.