Gasgrid Finland has published the new gas transmission tariffs which will be applied in Finland 1.1.2024 at 07:00 EET – 1.1.2025 at 07:00 EET. The Article 30 of Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a network code on harmonized transmission tariff structures for gas (Tariff Network Code, TAR NC) sets the obligation for Gasgrid Finland to publish the service price list at least 30 days before the beginning of the tariff period.
According to the Natural Gas Market Act, the transmission system operator must set transmission tariffs for each entry and exit point of the transmission network. However, no transmission tariffs are set for the entry-exit point to which a connecting pipe is connected to the natural gas network of another country belonging to the European Economic Area, if not setting the entry or exit tariff is based on an international obligation or agreement binding for Finland. Having the ITC (Inter TSO Compensation) agreement signed by the transmission system operators of Finland, Estonia and Latvia, there is no tariff at all at Balticconnector entry and exit points.
Document concerning the service prices of Gasgrid Finland and the information in accordance with the article 30 of Tariff Network Code
The transmission service package consists of three components that are relevant from the end user’s perspective, as the gas transported for end use in Finland is subject to entry and exit capacity tariffs as well as a commodity charge. The combined unit price of entry and exit capacities depends on how the shipper books the standard capacity products. The shorter the duration of the products booked by the shipper, the higher the unit price, based on the basic principle of transmission pricing, where the price of shorter-term capacity products is based on the price of the annual capacity product according to the multiplier price list. Additionally, when the shipper delivers gas to the Finnish exit zone, i.e., for national consumption, a commodity charge is collected from the shipper based on the costs incurred from the transmission of gas. Commodity charge is based on the actually measured amount of gas, and the unit price for 2025 is slightly lower than this year.
The goal of Gasgrid’s transmission pricing is predictability and stability which has been very challenging during past few years due to unforeseen and significant changes affecting the gas market. Gasgrid will keep the reference prices for 2025 (annual capacity product price) for both entry and exit capacity the same as this year. Gasgrid will adjust its transmission system to meet the needs of the gas market by removing compressor capacity from the regulated asset base (RAB) that is no longer considered to have actual use due to the changed flow dynamics. The regulated asset serves as the basis for determining a reasonable return, which sets the framework for transmission pricing. As a result of the measures to be implemented, the RAB will decrease, and thus the measures will have a lowering effect on transmission pricing. With our measures, we want to provide value to our customers by operating cost-effectively in terms of transmission services without compromising on reliable and safe transmission. Although gas consumption has decreased in recent years, this does not mean that the maintenance of the existing infrastructure can be safely reduced. Maintaining the gas system in good condition requires at least the current level of maintenance investment in the future as well.
In recent years, the flow dynamics of the transmission network have fundamentally changed due to the cessation of flows from Imatra, the Balticconnector interconnection point, and the connection of LNG terminals to the network. The combined technical transmission capacity of the LNG terminals and Balticconnector is sufficient to cover Finland’s assumed gas demand. As import points, these are different in terms of their characteristics and capabilities to respond to the seasonal demand profile changes typical of the Finnish gas market. The level of gas usage in Finland has recovered from the energy crisis level, with the usage level of 11.9 TWh in 2022 expected to reach 14.5 TWh this year, depending on the weather conditions for the rest of the year.
With high-level customer segmentation, gas users can be categorized into the industrial segment with a steady usage profile and the energy production segment that reacts more to momentary conditions. Gasgrid sees that the current transmission tariffs for the use of transmission infrastructure do not optimally reflect the changed market environment, where the transmission infrastructure can provide value to market participants for the increased need for load-following power, but at the same time, predictability has greater value for the transmission system operator to ensure efficient and reliable gas transmission. Furthermore, a significant part of the gas system serves peak demand, but the charges levied on network users are not allocated accordingly. As a result, Gasgrid will increase the prices of shorter-term exit capacity products based on the annual capacity product price for day and intraday capacity products.
The operational capacity of Gasgrid’s transmission network is maintained at an excellent level by the proactive and planned maintenance activities and a maintenance investment program. Our goal is extreme safety and undisturbed gas transmission for our customers.
