Finland’s gas markets

We operate as the maintainer and developer of Finland’s gas market model. Our goal is to devise a market model that serves an ever-changing market, creates the conditions for competition, and which is flexible, efficient and treats our customers fairly.

Finland’s gas market model is called the entry-exit system, and its framework is set by the EU’s gas market legislation. The entry-exit system means that gas can be fed into Finland’s gas system, consisting of the transmission network and the distribution networks connected to it, from certain points and be extracted from other points.

The key transmission service product we offer is capacity, which we supply to our customers at each entry and exit point. Finland uses the postage stamp reference price methodology, according to which all entry points and all exit points have the same tariff regardless of the location of the entry or exit point or gas transmission route.

In addition to the transmission service, balancing plays a key part in the gas market model. As the TSO with system responsibility, we know exactly how much gas each market participant owns at any given time and what conditions are required to carry out balancing and for market participant’s gas trading. This information is controlled at the Virtual Trading Point (VTP), where all transfers related to gas trading are recorded. In practice, VTP is an energy management system maintained by us.

The market model is based on shippers booking capacity at both entry and exit points. After the capacity is booked, the parties make nominations, i.e. capacity right transfer requests for the actual amount of energy transferred. The market participants are entitled to transmit gas in our pipeline within the limits of their booked capacity.

The pricing of our transmission services is based on capacity products, which are offered for different periods of time (annual, quarterly, monthly, daily and within-day). In addition to capacity products, the transmission service prices include the capacity charge and the commodity charge. The capacity charge is a charge that is based on the peak capacity supplied to the customer for gas end use, i.e. on how much transmission capacity is required from the network at the same time. The commodity charge (energy charge) is a gas transmission tariff which is based on the actual gas flow rate in Finland’s entry zone, i.e. in supplying end use in Finland.

The Energy Authority supervises the market model and the TSO’s business operations. In addition, all of the information related to the transmission network, such as transmission capacity, nominations and gas quality data is published on ENTSOG’s transparency platform, in accordance with EU requirements.