Electricity production and distribution

Electricity is produced by power plants operated by nuclear, hydro, wind power or various fuels. There are some 120 power producers and 400 power plants operating in Finland. Over half of the plants are hydroelectric.

The national grid and distribution networks transmit electricity from power plants to private homes and other users. Fingrid Oyj, established in 1996, is in charge of the transmission of electricity over the national grid, which transmits the electricity from producers to electricity distributors and industrial companies.

The networks operated by electricity distributors are connected to the electricity networks of private homes and other buildings. In residential buildings, the electricity arrives to the main switchboard or meter-reading centre, and from there to sub-switchboard in apartments. In detached houses, the sub-switchboard is part of the main switchboard.

Caruna’s operational environment

The Finnish electricity distribution market is strictly regulated and monitored. The purpose of the Finnish Electricity Market Act is to secure the continuity of supply, competitive prices, and reasonable service practices to end users.

Due to Caruna’s natural monopoly position as an electricity distributor, our operations require a specific network licence from the Energy Authority. The Energy Authority monitors the operations of electricity distributors and calculates the allowed return for the distribution of electricity. The electricity distributors then use this value as a basis for their distribution prices.

The Electricity Market Act is the key regulation of the electricity retail market. It is based on the premise that electricity networks constitute a marketplace which, on equal and reasonable terms, offers services to all electricity trade parties, both suppliers and buyers. Network operators, such as Caruna, are required to utilise, develop, and maintain their networks in accordance with the electricity market’s needs. This means that network operators must secure the functionality and continuity of the power supply system, and meet the customers’ reasonable network service needs. Network operators must also offer the services required to access the network (connection and distribution service) on equal and reasonable terms to all customers who need them.

Data management is an important element of electricity market activities. As the legislation governing electricity market activities stipulates, Caruna is under a specific obligation to remain impartial and share necessary data between all market parties. On the other hand, we are also tied by the regulations on management of personal information. One of the core requirements is that consumers must always have the right to manage any information concerning them.

The Electricity Market Act was amended in 2013, with the aim of improving the reliability of electricity supply.

The Electricity Market Act was amended in 2013, with the aim of improving the reliability of electricity supply. The renewed act specifies that interruptions caused by storms or snowfall must not exceed six hours in urban or suburban areas, or 36 hours in any other areas.

All electricity network operators must improve the reliability of their supply so that the required level of reliability can be achieved by the end of 2028 at the very latest, unless a company is granted an extension to the transition period by the Energy Authority (a maximum of eight years). To Caruna, this translates into significant investments to improve our reliability of supply in future years, such as cabling overhead lines and increasing network automation. Further investments are needed also to renew aging network assets.

Electricity networks in the future

We always strive to improve our services to enable us to better respond to the expectations and wishes of our customers. New opportunities emerging within the market, such as emerging technologies, energy storages, and decentralised energy production, are also going to continue changing the roles and business models of distribution network operators in the future, which ultimately benefits the consumers and businesses as well.

Finnish electricity networks are currently becoming more intelligent, which enables a more efficient use of energy in new ways and supports the adoption of a more ecological method of energy production. Intelligent electricity networks greatly improve the opportunities of electricity consumers to impact their own energy consumption. From the beginning of 2014, nearly all electricity delivery sites are equipped with smart meters that enable features such as hourly reading of electricity consumed by private homes. Future homes and electric networks will be so intelligent that they will be able to adjust themselves to be more energy-efficient.