News / Gas Market News 5

Gas Market News 5

The summer has arrived and the summer holiday season is at hand. The second quarter has been brisk in terms of national and regional market development. The gas market news package includes the following topics:

  • Changes in Gasgrid Finland’s organisation and customer interface
  • Gas market data overview
  • Balticconnector capacity allocation mechanism
  • The Finnish Energy Authority has made a confirmation decision on the terms and conditions of Gas Datahub
  • The connection of the Hamina LNG terminal to the Finnish gas system and preparations for commercial commissioning of the terminal are progressing
  • State of preparation of the guarantee of origin system in Finland
  • Updates on Research, Development and Innovation activities
  • News about regional market development

Changes in Gasgrid Finland’s organisation and customer interface

Gasgrid Finland has strengthened the organization of the gas market unit during Q2/2021. With a strengthened team, we will be better able to serve our customers and develop the gas market in a customer-oriented manner. The following new Gasgrid Finland employees have taken up their positions during May-June:

  • Esa Hallivuori has started as a Vice President and Head of the Gas Market Unit joining Gasgrid Finland from the role of CEO of Hamina LNG. In this role, he will be responsible for Gasgrid Finland’s commercial processes, the development of Gasgrid Finland’s services and gas market, and the customer interface as a whole.
  • Niina Heiskanen has started as a Customer Service Manager in the Gas Market Unit. Her main tasks include customer service coordination and development, customer relationship management and customer interface operations processes, and the comprehensive development of Gasgrid Finland’s customer experience throughout the company. Niina is also responsible for market registration and role change processes, including e.g. development of collateral management and development.
  • Heli Haapea has started as Service Manager (guarantees of origin, renewable gases) in the Gas Market Unit. Her main tasks include the development and operation of the guarantee of origin system and service, as well as the regulation and market development of renewable gases.

In addition, our three well-known key experts continue in the Gas Market Unit and commercial interface: Service Manager Tiina Niinimäki as responsible developer of commercial IT systems and market services, Anni Nuppunen as Operations and Balance Service expert and Gas Market Development Manager Mika Myötyri as responsible for commercial processes, tariffs, and the development of gas market (rules, market model, etc.).

Gas market data overview

In May 2021, gas consumption was about 1,1 TWh, which was significantly lower than in May last year, when consumption was about 1,7 TWh. Gas consumption decreased due to several maintenance works in gas consumption sites and the relatively high price level of gas energy and emission rights. At Balticconnector, congestion has eased. Commercial commissioning of Puiatu and Paldiski compressor stations will have an increasing impact on capacities. From 1 January to 30 June 2021, approximately 14,8 TWh of gas has been used.

On the regional level, May was an interesting month, as the injection season of Incukalns gas storage facility in Latvia started at the beginning of May. The most significant gas volumes were injected into the FINESTLAT regional entry tariff zone via Luhamaa connection point between Estonia and Russia.

For more information, see Gasgrid Finland’s monthly gas market data review on our website.

Balticconnector capacity allocation mechanism

Since the opening of the gas market and the introduction of the Balticconnector interconnector point, implicit capacity allocation mechanism, in which both capacity and the corresponding amount of gas are allocated simultaneously based on confirmed nominations, has been applied. The confirmation decision made by the Energy Authority last year on the terms of Balticconnector’s capacity allocation mechanism applies to the calendar year 2021. Thus, a separate confirmation decision will be needed for 2022. On 29 April 2021, Gasgrid Finland submitted a report for Energy Authority in accordance with the confirmation decision on 30 November 2020. In the document, Gasgrid Finland asked the Energy Authority for an opinion on whether the current capacity allocation mechanism could be extended in 2022 or whether the capacity auction mechanism should be introduced. A report submitted by Gasgrid Finland can be found here.

On 25 May 2021, the Energy Authority submitted a statement to Gasgrid Finland stating that it considered Gasgrid Finland’s proposal to continue with the current capacity allocation method in 2022. In the statement, the Energy Authority asked Gasgrid Finland to submit the terms of the capacity allocation mechanism to be confirmed by 6 September 2021. You can find the Energy Authority’s opinion here (available only in Finnish).

Gasgrid Finland informs market participants about developments related to Balticconnector’s capacity allocation method. For more information, please contact Gasgrid Finland’s Development Manager Mika Myötyri: mika.myotyri@gasgrid.fi

The Finnish Energy Authority has made a confirmation decision on the terms and conditions of Gas Datahub

On June 24, 2021, the Energy Authority has made a confirmation decision on the terms and conditions of Gas Datahub (available only in Finnish).

With the opening of the Finnish gas market, the centralized data exchange platform, Gas Datahub, was introduced. The key market processes of the retail gas market, such as retailer switching and collecting the metering data for the balance settlement are part of the Gas Datahub services. To this end, Gas Datahub, which is operated by Gasgrid Finland, was set up for retailers and distribution system operators (DSOs). Retailers and DSOs manage their market processes through Gas Datahub. Gasgrid Finland has a statutory monopoly in the provision of these services, hence the terms and pricing methods of the services confirmed by the Energy Authority before their introduction.

For more information, contact Gasgrid Finland’s Development Manager Mika Myötyri: mika.myotyri@gasgrid.fi

The connection of the Hamina LNG terminal to the Finnish gas system and preparations for commercial commissioning of the terminal are progressing

The connection of the Hamina LNG terminal to the Finnish gas system is progressing. The construction work is being carried out as a joint project between Gasgrid Finland and Haminan Energia. In March 2021, Hamina LNG has announced that the target timetable for the commissioning of the LNG terminal is the gas year 2022 (1.10.2021-30.9.2022). For the gas year 2022, the terminal capacity set by the LNG terminal operator has been available to market participants since 1 April 2021.

Gasgrid Finland will make entry capacity available to the LNG virtual entry point when the commercial commissioning schedule of Hamina LNG terminal is confirmed. Gasgrid Finland will offer entry capacity to the LNG virtual entry point using First-Come-First-Served capacity allocation principle. Gasgrid Finland offers standard capacity products: annual, quarterly, monthly, daily and within-day capacity products. Gasgrid Finland will inform market participants separately when capacity for the LNG virtual entry point is made available.

More information on the capacity offered by Gasgrid Finland can be found in Chapter 5 of the Gas Transmission Rules.

State of preparation of the guarantee of origin system in Finland

The Government proposal to the Finnish Parliament for an Act on Guarantees of Energy Origin (HE 87/2021 vp) was submitted to Parliament on 12 May 2021. Consideration by Parliament will be pushed back until the autumn, which means that the Act will not now enter into force on 30 June 2021 as proposed.

Under the EU’s recast Renewable Energy Directive (RED II), it must be possible to guarantee the origin of energy to a final customer when it comes to demonstrating that a given share or quantity of energy is produced from renewable sources. This is done by granting guarantees of origin corresponding to the production output of energy from renewable sources and correspondingly by cancelling the guarantees of origin concerned when the relevant amount of energy is released for final use.

Gasgrid Finland will maintain the gas guarantee of origin system in Finland. The electronic system required by the guarantee of origin system is likely to be brought into use in late 2021. The delay in consideration of the Act on Guarantees of Energy Origin might result in changes to this timetable. Joining the guarantee of origin system will require an agreement with Gasgrid Finland. It will be possible to join the gas guarantee of origin system and the actual processing of guarantees of origin is likely to start later in the year.

At notification by a biogas certificate holder, Gasgrid Finland may, when the Act on Guarantees of Energy Origin enters into force or thereafter, convert a biogas certificate registered in the biogas register system to a guarantee of origin. The plan is to phase out the existing biogas certificate system once there is no longer a need for biogas certificates. The last biogas certificates will be granted for biogas produced on 31 December 2021. The biogas certificate system will be phased out by the end of 2023.

Market participants have until 20 August 2021 to comment on the rules of the guarantee of origin system drawn up by Gasgrid Finland. The Energy Authority will approve the rules during the autumn once the Act on Guarantees of Energy Origin has entered into force. The Energy Authority will also approve the pricing criteria for the service.

Gasgrid Finland will communicate the progress of the preparation on its website and will also add among other things the terms and conditions, agreement templates and service pricelist to the website, which also features an FAQ section providing answers to topical questions about the guarantee of origin system.

Gasgrid Finland held two info sessions regarding the development of the guarantee of origin system during the first half of 2021. The next info session on the development of the guarantee of origin system will be held at midday EEST on 7 September 2021.

For more information, please contact Gasgrid Finland’s Service Manager Heli Haapea, heli.haapea@gasgrid.fi.

Updates on Research, Development and Innovation activities

Gasgrid Finland established its research, development and innovation (RDI) function in August 2020. Almost one year has passed and during this first year we have developed our RDI practices, built RDI collaboration networks and had several discussions with our customers and stakeholders. We have also started our first projects and project preparations.

During spring 2021 Gasgrid Finland joined the European Hydrogen Backbone (EHB) initiative, a group formed by 23 gas TSOs. The EHB group created a joint vision for developing a hydrogen network in Europe. We at Gasgrid Finland were active in developing the Finnish and Baltic Sea region part of the vision in cooperation with Elering and Nordion Energi. The vision was published in April 2021. After that the EHB group continued with a more detailed analysis of hydrogen demand, supply and role of hydrogen network in energy transfer in a future energy system. The analysis was published on 15th of June 2021.

Gasgrid Finland is also collaborating with the Baltic gas TSOs in terms of preparation of an evaluation study of hydrogen injection into the existing gas network and we participated to the work by sector integration expert group that was established by the Ministry of Economic Affairs and Employment of Finland. The final sector integration report by the Ministry will be published in June 2021.

For more information, please contact Gasgrid Finland’s Head of Strategic Analysis and RDI, Sara Kärki: sara.karki@gasgrid.fi.

Updates on regional gas market development

Gasgrid Finland has continued to development work with Baltic Transmission System Operators (TSOs) with the aim of promoting the overall functioning of the regional gas market. The TSOs have formed a number of working groups to increase the overall benefits of the market.

TSOs have deepened the cooperation with regard to operational plans with the aim of minimising the impact of critical maintenance measures on the transmission services provided to the market with regard to security of supply. Also, the key objective is to provide transparent and predictable information on the availability of the regional system for the market participants. Service and maintenance plan will be published later this summer.

Regarding the future of gases, the TSOs have set up a working group aimed at taking forward concepts related to new gases such as hydrogen. Harmonisation of market rules will be increased appropriately, and since the start of the year, all TSOs in the region have begun to publish UMMs (Urgent Market Messages) centrally through the GET Baltic UMM platform.

Finnish, Estonian and Latvian TSOs have formed a common entry tariff zone from the beginning of 2020. TSOs in the Finnish-Baltic region have continued work on studying a solution for a regional tariff area covering FINESTLAT and Lithuania. Below is a roadmap showing the development groups of the regional gas market:

Gasgrid Finland Oy is a Finnish state-owned company and transmission system operator with system responsibility. We offer our customers safe, reliable and cost-efficient transmission of gases. We actively develop our transmission platform, services and the gas market in a customer-oriented manner to promote the carbon-neutral energy and raw material system of the future. Find out more: www.gasgrid.fi/

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