15.06.2009
More versatile supply is the best way to avoid problems in the electricity market
The proposal of the Federation of Finnish Technology Industries for the development of the electricity markets does not provide a realistic option. The best way to influence the price of electricity is to increase supply by building new emission-free capacity, maintains Timo Rajala, President and CEO, Pohjolan Voima.
The end user price of electricity remains a competitive advantage for Finland. Competitiveness has been secured by versatile production and efficient transmission and distribution systems. However, competitiveness is burdened by taxation which, for the energy-intensive industry, is higher than in competitor countries.
Operators in the field are worried for a good reason. The solution proposed by the Federation of Finnish Technology Industries is not, however, realistic. The present electricity market model has been developed at the initiative of the Norwegians. Finland’s proposals do not suit the other Nordic countries or the expanding EU market.
At the same time, a temporary economic downturn has cut both the consumption and production of electricity. For example, the closing of a pulp mill that is over self-sufficient in terms of its electricity production will increase the need for other condensing power production.
Pohjolan Voima has long been the largest power plant investor in the Nordic countries. The versatile investment programme has increased the supply of electricity, thus benefiting all electricity consumers.
Pohjolan Voima’s investment operations have been enabled by an operating model where electricity and heat are produced for shareholders at cost. This model, referred to as the ‘Mankala’ model, makes it possible to carry out power plant investments in an open electricity market that require large amounts of capital.
The Mankala model provides considerable scale and efficiency benefits, while also making it possible for small enterprises to participate in large investments. The shareholders are jointly responsible for the funding of the project and undertake to purchase the electricity produced at the plant at cost.
Further information:Timo Rajala, President and CEO, Pohjolan Voima Oy
The end user price of electricity remains a competitive advantage for Finland. Competitiveness has been secured by versatile production and efficient transmission and distribution systems. However, competitiveness is burdened by taxation which, for the energy-intensive industry, is higher than in competitor countries.
Operators in the field are worried for a good reason. The solution proposed by the Federation of Finnish Technology Industries is not, however, realistic. The present electricity market model has been developed at the initiative of the Norwegians. Finland’s proposals do not suit the other Nordic countries or the expanding EU market.
At the same time, a temporary economic downturn has cut both the consumption and production of electricity. For example, the closing of a pulp mill that is over self-sufficient in terms of its electricity production will increase the need for other condensing power production.
Pohjolan Voima has long been the largest power plant investor in the Nordic countries. The versatile investment programme has increased the supply of electricity, thus benefiting all electricity consumers.
Pohjolan Voima’s investment operations have been enabled by an operating model where electricity and heat are produced for shareholders at cost. This model, referred to as the ‘Mankala’ model, makes it possible to carry out power plant investments in an open electricity market that require large amounts of capital.
The Mankala model provides considerable scale and efficiency benefits, while also making it possible for small enterprises to participate in large investments. The shareholders are jointly responsible for the funding of the project and undertake to purchase the electricity produced at the plant at cost.
Further information:Timo Rajala, President and CEO, Pohjolan Voima Oy