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Working group proposes nixing cheaper night-time electricity rates

A 'smart grid' working group appointed by the Ministry of the Economy has proposed major changes to Finland's system of distributing electricity. Among other things, the group suggests doing away with separate day and night-time electric prices, a change that could affect hundreds of thousands of single-family homes that rely on electric heating. 

Nainen olohuoneessa.
Many house-owners in Finland heat their homes and water with night-time electricity. Image: Nella Nuora / Yle

A proposal from a ministerial working group to do away with separate day and night-time electricity prices in Finland would affect approximately half a million properties that rely on electric heating.

Many families in Finland currently heat their home's largest consumers of electricity, like water heaters and underfloor heating systems, during the cheaper night-time hours, usually at around 11 pm. 

Moving towards smart grids

The Ministry of Economic Affairs and Employment established a working group to explore the potential of smart grids for the Finnish electricity market last year. The primary goals were to make it easier for customers to participate in the market and safeguard security of supply.

Tatu Pahkala, a chief inspector at the ministry and chair of the working group, says doing away with the time-of-day tariffs would distribute electricity consumption more evenly in future.  

He says that Finland's night-time electricity use makes the grid less flexible and accounts for an estimated 1,000 to 1,800 megawatts of power – the equivalent of a large nuclear plant.

"This huge potential is now locked into the distribution company's regulation efforts, instead of being freed up in the market where it can be optimally used in the grid," Pahkala says.

Adjusting and balancing supply

The move to so-called smart grids in Finland anticipates an increase in renewable energy use, often weather-dependent, that would need to be better regulated and optimized.

Ideally, the smart grid would always source the electricity from the cheapest production method – for example, a wind turbine park on a windy day. It would also make it easier for homes to produce solar energy, and possibly sell any excess back to the grid.

The working group, composed of civil servants, researchers and interest group representatives, will submit its final report one year from now, in the autumn of 2018.

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