New Electricity Market Act 2025 – Key Changes and Impacts | LKOS Law Office
The New Electricity Market Act 2025 – Key Changes and Impacts
A major reform is coming to Finland's electricity market with the new Electricity Market Act, scheduled to enter into force in autumn 2025. The purpose of this reform is to increase market flexibility, clarify pricing models, and improve the utilization of the electricity grid. This article presents the key changes and compares them with the current legislation.
Why is the Electricity Market Act being reformed?
The reform is driven by the implementation of EU directives and the Finnish government’s objective to modernize the electricity system. The primary goals are to promote a smart electricity system, enhance customer participation, and bring energy production and consumption geographically closer together.
Key changes compared to the current situation
1. Construction and ownership of networks above 110 kV
The reform will allow distribution network companies to build and own local networks above 110 kV. Previously, this was only permitted for the transmission system operator (Fingrid).
2. Flexible use of connection lines
The new law introduces flexible connection line arrangements for networks of at least 110 kV, encouraging production and consumption to be located closer to each other.
3. Integration of energy storage
The integration of energy storage facilities into connection lines will be allowed on a broader scale, which particularly supports the efficient use of renewable energy production.
4. Power-based connection fees
Fingrid proposes that connection fees be converted to power-based fees. This would allocate costs more accurately to customers who create new investment pressures for the grid.
5. Introduction of combined invoicing
Customers will be offered voluntary combined invoicing, where electricity sales and distribution services are invoiced on a single bill. This simplifies consumer billing and increases cost transparency.
Impacts on businesses and consumers
Impacts on businesses
Companies will especially benefit from power-based pricing, which allows for more accurate cost predictability. Additionally, flexible connection options and the integration of energy storage open up new business opportunities in the energy sector.
Impacts on consumers
Consumers’ positions will significantly improve with combined invoicing and market-based load control. Customers will have better opportunities to influence their electricity costs through their own consumption habits.
Comparison to current legislation
Compared to the current legal framework, the new Act significantly increases flexibility and clarifies cost allocation. In particular, the ability to construct networks above 110 kV and the shift to power-based pricing represent major changes aimed at encouraging more efficient energy use and optimized location choices.
Timeline and next steps
The legislative proposal will proceed to Parliament and committees in spring 2025. The legislative amendments are planned to enter into force between August and September 2025. Companies and other stakeholders should prepare for the changes in good time.
Contact Us to Ensure Your Business is Prepared
If you need further information about the Electricity Market Act reform or its implications for your business, contact our experts. LKOS Law Office’s specialists are ready to help you understand the changes and ensure your company is fully prepared for the upcoming reforms.