Finland

Overview

Finland has one bidding zone, one transmission operator and a wholesale price that fell from the top of the Nordic table to the bottom of it in the space of a single spring. The reactor that did it is called Olkiluoto 3.

The unit entered regular commercial production in mid-April 2023 — 1,600 MW of EPR, roughly a decade later than the original schedule and after a construction saga that became a European cautionary tale. Late or not, it works. One machine now covers something close to a seventh of Finnish consumption, and it runs flat out.

The timing mattered as much as the megawatts. Russian electricity imports across the eastern border stopped in May 2022 and Russian pipeline gas stopped with them. Finland went into the 2022–23 winter structurally short, paying some of the highest prices in the Nordic region, with a chartered floating LNG terminal on order and a reactor still in test operation. Eighteen months later the same system was producing 37% of its electricity from nuclear and 26% from wind, and the annual average day-ahead price had fallen to about EUR 40/MWh — the cheapest in Europe that year.

Consumption in 2025 was 85 TWh against domestic production of 79 TWh, with the balance imported, mostly from Sweden. Peak load was 13,681 MW, set on 4 February. Those are small numbers by continental standards. What makes the market interesting is not its size but its shape: a large block of inflexible must-run nuclear, a wind fleet that has grown faster than almost anyone forecast, heavy district heating and pulp-and-paper load that swings hard with temperature, and very little in between to absorb the difference.

Market structure

One price area, one TSO, one exchange. After the zonal arithmetic of Sweden and Norway, Finland is a relief to model and a nightmare to hedge.

Who does what

The single zone

Sweden has four bidding zones, Norway five, Denmark two. Finland has one. Every megawatt-hour consumed between Helsinki and Utsjoki clears at the same hourly price, and internal congestion — of which there is plenty, since most wind sits in Ostrobothnia and most load sits in the south — is handled by Fingrid through counter-trade rather than by splitting the area.

For a trader that removes an entire category of basis risk and replaces it with a different problem. There is no EPAD-style zonal hedge to buy in Finland because there is no zone to hedge against. What remains is the spread between the FI area price and the Nordic system price, and that spread is where the money and the pain sit. Retail supply is fully competitive: 49 active retailers at the end of 2024, and by then about a third of household contracts were on dynamic hourly pricing — an unusually high share, and one reason Finnish consumers pay close attention to spot prices that would be invisible elsewhere.

Gas is a separate, much smaller conversation

The gas market opened to competition in 2020 with an entry-exit model and a virtual trading point run by Gasgrid. It is genuinely liberalised and genuinely tiny. Deliveries were 14.0 TWh in 2024, against a pre-2022 level roughly double that. Finland, Estonia, Latvia and Lithuania form one small pool of demand hanging off three LNG terminals, and prices there track TTF with a basis that reflects terminal and pipeline availability rather than any local supply-demand balance.

Infrastructure — power and gas

A long, thin grid running north to south, four interconnectors to the west and south, and a gas system that now reaches the world through one chartered ship at Inkoo.

Power

Fingrid operates roughly 14,000 km of transmission line and moves around 85 TWh a year at a delivery reliability of 99.99%. The physical problem is geography: wind capacity has been built overwhelmingly in the west and north, while Helsinki, the metals industry and the largest data centre projects sit in the south. Internal transfer capacity is the binding constraint, and Fingrid's grid development plan is largely a programme of north–south reinforcement.

Gas

Before 2022 Finnish gas arrived through one pipeline from Russia and that was the entire supply picture. It now arrives two ways. The Inkoo FSRU Exemplar, a chartered Excelerate vessel moored at Inkoo since December 2022, regasifies up to about 5.2 bcm a year and supplied 93% of Finnish LNG imports in 2024. The Balticconnector, a 152 km line from Inkoo to Paldiski with capacity around 7.2 mcm/day, links the Finnish and Estonian systems in both directions.

In October 2023 a ship's anchor dragged across the Balticconnector and took it out for six months. Finland and Estonia coped, which tells you something about how much slack there now is in Baltic gas demand, but the incident permanently changed how the region prices security of supply. The pipeline returned to commercial service in April 2024.

Demand and supply

Nuclear and wind now supply nearly two thirds of Finnish generation between them, and coal has effectively left the system.

Supply

Five reactors at two sites give 4,369 MWe of nuclear capacity — the two Olkiluoto BWRs uprated to 880 MW each, the two Loviisa VVERs at 507 MW each, and Olkiluoto 3. Loviisa is licensed to 2050. Wind has grown from a rounding error to the second-largest source in about eight years, and generation rose another 9% in 2025. Coal-fired output was 0.3 TWh in 2025. That is not a phase-out in progress; that is a fuel that has already gone.

Demand

Finnish load is unusually temperature-sensitive, and the reason is heat. District heating serves most of the urban building stock, and where it is electrically boosted or replaced by heat pumps, every degree of frost shows up directly in the load curve. Add the pulp, paper and metals industry — which runs continuously and consumes a large share of national electricity — and you get a demand profile that is high, flat and then suddenly very high.

Price setting mechanism

Marginal-cost clearing on Nord Pool, same as the rest of the Nordics — but with a supply stack that has almost nothing in the middle of it.

The auction

Participants submit hourly bids and offers to Nord Pool for the FI area by noon for the following day. The market couples with the rest of the Nordics and, through Estlink, with the Baltics; the algorithm clears all areas simultaneously subject to interconnector limits. The last accepted offer sets the price for everyone in the area.

Why the distribution is so wide

Look at what is available to be marginal. Nuclear will not move — 4.4 GW of it bids in at or below zero because the cost of not running is higher than the cost of running. Wind bids at zero too. Hydro has some flexibility but Finnish reservoir capacity is modest compared with Norway's. Above that there is condensing thermal and CHP, and above that essentially nothing until you reach imports and the price cap.

So the price is bimodal. In a windy hour with mild weather, supply from must-run sources exceeds demand and the clearing price goes to zero or below. Finland recorded 725 hours of negative day-ahead prices in 2024, more than any other European country, and it kept happening: 2025 brought another 465. In a cold still hour, the stack runs out and the price does whatever it has to. On 2 May 2024 the morning peak cleared at EUR 397/MWh.

What that means for hedging

Average price tells you very little here. The annual mean fell from EUR 56.47/MWh in 2023 to EUR 45.57 in 2024 and about EUR 40/MWh in 2025, which sounds like a market gently normalising. The hourly reality is a distribution with fat tails at both ends and a thin middle, which is why Finnish volume risk — how much you consume in the expensive hours, not how much you consume — dominates price risk for most industrial buyers.

Regulatory regime

Energiavirasto regulates both electricity and gas; the EU sets the frame; and unlike most of Europe, Finland has never needed a capacity mechanism to keep the lights on.

How network charges are set

Distribution and transmission tariffs are regulated on a four-year period basis, with the Authority confirming methodology in advance and settling any over- or under-recovery at the end of the period. The framework became politically visible after the 2013 storms, when reliability obligations pushed distribution investment up sharply and consumer network charges followed. The resulting cap on annual tariff increases is still in force and still argued about.

Adequacy

Finland does not run a capacity market. It runs a strategic reserve: a modest volume of generation and demand response contracted by Fingrid, held outside the energy market and activated only when the day-ahead auction fails to clear. Given that the country still imports around 5.6 TWh a year and that adequacy in a cold snap depends on Swedish and Estonian availability as much as its own, the Authority reviews the reserve volume each period.

Gas regulation after Russia

The gas market was opened on the assumption of a single pipeline supplier and then had that supplier removed within two years. What survives is the machinery — entry-exit, postage-stamp tariffs, a VTP, third-party access to Inkoo — applied to a market supplied almost entirely by LNG. Gasgrid Finland owns the network and the state charters the terminal, which makes the supply-security question a fiscal one as much as a regulatory one. The state also underwrites the Inkoo charter, a ten-year commitment signed in a hurry in 2022 and now the backbone of Baltic gas supply.

Key links

Primary sources for this market. Figures on this page are drawn from these and from published market data.