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 utilisation of the electricity grid. This article presents the key changes and compares them with the current legislation.
1. 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 modernise 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.
2. Key changes in the Electricity Market Act 2025
2.1 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). This change is intended to support the development of regional grid solutions and new investments.
2.2 Flexible use of connection lines
The new law introduces more flexible connection line arrangements for networks of at least 110 kV. The objective is to encourage electricity production and consumption to be located closer to each other and to improve the efficiency of the grid.
2.3 Integration of energy storage
The integration of energy storage facilities into connection lines will be allowed on a broader scale. This particularly supports the efficient use of renewable energy production and helps balance fluctuations in production and demand.
2.4 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 needs for the grid and support more efficient use of network capacity.
2.5 Combined invoicing for customers
Customers will be offered voluntary combined invoicing, where electricity sales and distribution services are invoiced on a single bill. This simplifies billing, improves cost transparency and makes it easier for customers to understand their total electricity costs.
3. Impacts on businesses and consumers
3.1 Impacts on businesses
Companies will particularly benefit from power-based pricing, which allows for more accurate cost predictability and better alignment of network costs with actual usage. In addition, flexible connection options and the integration of energy storage open up new business opportunities in the energy sector, for example in local generation projects and flexibility services.
3.2 Impacts on consumers
Consumers’ position will improve through combined invoicing and increased opportunities for market-based load control. Customers will have better possibilities to influence their electricity costs by adjusting their consumption behaviour and by utilising smart solutions offered by electricity suppliers and distribution companies.
4. Comparison with current legislation
Compared with the current legal framework, the new Act significantly increases flexibility and clarifies cost allocation. In particular, the possibility for distribution network companies to construct networks above 110 kV and the shift to power-based connection fees represent major changes. The reform aims to encourage more efficient energy use, optimise location choices for production and consumption, and support the transition to a smarter electricity system.
5. Timeline and next steps
The legislative proposal will proceed to Parliament and the relevant 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 by reviewing their grid connection arrangements, pricing models and contractual framework.
6. 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, assess the legal risks and opportunities, and ensure that your company is fully prepared for the upcoming reforms.