Aging electricity network must be renewed and weatherproofed
The electricity network company Elenia’s distribution price will increase 6.1 % on average from the beginning of August. The CEO of Elenia Tapani Liuhala explains the price increase with the modernization of electricity distribution to meet current and future requirements.
“We are building an intelligent, weatherproof electricity network in response to the changing needs of electricity production, distribution and consumption. There are three important reasons for the renewal,” says Tapani Liuhala, CEO of Elenia Oy.
“First, the overhead line that was built a long time ago is now at, or close to, the end of its useful life. The electricity network must be renewed in any case. Secondly, both customers and society need more reliable distribution of electricity. A functioning electricity network is a prerequisite for normal life in all circumstances. We are fulfilling these expectations by building a weatherproof network, renewing the technology and securing the continuous operations of the network,” explains Liuhala.
“Thirdly, the whole electricity market is going through a fundamental change. In this change, tech-savvy Finland can be a forerunner when it comes to smart grids. In the development to fight climate change, Elenia has been a leader with, for example, intelligent electricity measurement.”
“The increase in wind and solar energy makes it more demanding to maintain the balance of the electricity system as we must produce as much electricity as is being used every moment. So that we have enough electricity in the future also during cold winter periods, the flexibility of consumption gains more importance. This requires more efficient technical solutions,” says Liuhala.
Elenia’s investments in a weatherproof electricity network since 2012 will increase to nearly EUR 750 million in 2018. For Elenia’s partners and component manufacturers, network renewals provide work for years to come. Elenia has approximately 70,000 kilometres of electricity network.
“We began building the weatherproof network in 2009 and will fulfill on time the requirements set by the authorities. Already now a large number of our customers are covered by more reliable electricity distribution, but this work will continue for many years.”
“This year, our investment in the reliability of electricity distribution is over EUR 140 million. We are building approximately 3,000 kilometres of weatherproof network. The new network is being built to meet the future requirements of society’s energy system, and it is low-maintenance, safe and eco-friendly,” emphasises Liuhala.
The Energy Authority supervises electricity network companies and their pricing policies with control periods. Finnish legislation states clear requirements concerning electricity distribution. Electricity network companies are to design, build and maintain an electricity network for the needs of end-users so that it endures also harsh weather conditions. Power outages caused by storms or snow loads must not exceed six hours in zoned areas, while elsewhere the maximum limit is 36 hours from 2028 onwards.
Examples of the monthly average impact of the price increase on the tax-inclusive distribution price. The impact of the average price increase of 6.1 % on the tax-exclusive price will be on average 9.9%. Distribution tariffs include both value added tax and electricity tax. The share of taxes in the total electricity price varies from over a third to a half.
|Housing type||Annual consumption||Increase|
|Flats and apartments||2 000 kWh||1.61 €/kk|
|Terraced and detached properties||5 000 kWh||3.36 €/kk|
|Detached properties||18 000 kWh||6.89 €/kk|