The Finnish power market: Are imports from Russia low-cost?

Details

Serval ID
serval:BIB_01BB9A2EC757
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
The Finnish power market: Are imports from Russia low-cost?
Journal
Energy Policy
Author(s)
Ochoa C., Gore O.
ISSN
0301-4215
Publication state
Published
Issued date
05/2015
Peer-reviewed
Oui
Volume
80
Pages
122-132
Language
english
Abstract
Electricity market integration of high- and low-price areas is expected to bring benefits to the consumers in a high-price area. However, these potential benefits are highly dependent on the market characteristics and the policy interventions. We use simulation to study the effects of different alternatives for the expansion and operation of the interconnector Finland–Russia on the Finnish market (a high-price area). Our results show that the current trading arrangement, where a single trader owns the transmission rights, and limits the trade during peak hours to avoid capacity charges in Russia, is beneficial for Finland at the current interconnection capacity. However, if the interconnector is expanded, the behaviour of the trader would create significant distortions in the Finnish market. We also analyse the pros and cons of maintaining a strategic reserve in Finland in combination with the different scenarios of interconnection expansion and trading arrangements. We conclude that in the absence of trust in imports, the need for a strategic reserve is undeniable. This will slightly reduce the economic benefits of integration for Finnish consumers, but it will significantly improve reliability.
Keywords
General Energy, Management, Monitoring, Policy and Law
Web of science
Create date
28/01/2015 10:39
Last modification date
21/08/2019 5:12
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