FINGRIDCorporate magazineFingrid Oyj

3/2006

years

Editorial staffTelephone: +358 (0)30 395 5000, Fax +358 (0)30 395 5196Postal address: P.O.Box 530, FI-00101 Helsinki, FinlandStreet address: Arkadiankatu 23 B, Helsinki, www.fi ngrid.fiEditor-in-Chief: Leni Lustre-Pere, leni.lustre-pere@fi ngrid.fiEditorial board: Jari Helander, Aila Itäpää, Antti Linna, Erkki StamDesign by bbo, Better Business Offi ce Oy, Maria Hallila and Tuija SorsaTranslation by Kielipaja Hannu Hakala

Printed by Lönnberg PrintISSN 1456-2693

FINGRIDCorporate magazineFingrid Oyj

9th volume3/2006

Published byFingrid Oyj

Cover photographs by Juhani Eskelinen

EditorialFingrid’s ten years 4

Two aspects into Finland’s national legacyFingrid’s decennial jubilee seminar had two topics: the Finnishgrid and the treasures of the ship St Michel, which sank in 1747.Both are part of national legacy in Finland. 6

Hannu Linna is the new Chairmanof Fingrid’s Advisory CommitteeHannu Linna, Managing Director of Vaasan Sähkö, likes chal-lenging duties. As of the beginning of 2007, he will serve as theChairman of Fingrid’s Advisory Committee, which consists of therepresentatives of the company’s customers. 10

Fingrid’s stable fi nancesThe fi nances of the Finnish grid operator have stabilised in tenyears, and it has elevated its equity ratio from 10 per cent to25 per cent. 14

Fingrid’s capital investments anticipate the needs ofcustomers and marketThe foremost development issues in the Finnish grid are relatedto the present and future needs of the customers and of theelectricity market. 18

Mere forecasts are not suffi cient in long-termgrid planningSuccessful plans call for close and confi dential co-operationwith customers and the other Nordic TSOs. 21

From good to excellentAt the beginning of this millennium, Fingrid’s customers ratedthe company’s performance with a grade of above 8 on a scalefrom 4 to 10. Nowadays, customer feedback gives an excellentgrade, 9. 24

High system security requires constantpreparations for the worst case scenarioThe engineering and operating principle applied to the Finnishpower system is to make preparations for the worst possible sin-gle fault at any given moment. 27

Electricity market is opening – although slowerthan expectedIn the early phases of electricity market liberalisation, it appearedthat the objectives of the reform could be fulfi lled quickly andeasily. However, the functioning of the market has been subjectto increasing criticism lately. 30

In brief 32

Demanding but successful operating model guidesasset management. 34

Electricity from RussiaFingrid wishes to have genuine co-operation, which benefi ts allparties, with Finland’s eastern neighbour. It must be possibleto assess the future and development needs using mutuallyaccepted principles. 38

Fingrid’s many dimensions of environmental responsibilityThe implementation of new transmission line projects dependscrucially on attending to environmental responsibility as well aspossible. 42

Grid operator promotes and producesheavy-duty expertiseConstant development of Fingrid’s duties and procedures hasmeant that learning new things is a permanent state of affairsfor the company’s employees. In its R&D, the company hasfocused above all on ensuring system security. 46

Unused power plants into short starting readinessThrough a new act which came into effect on 15 December2006, condensing power plants which have been at standstillare harnessed to secure electricity supply during the peak loadperiod as of the beginning of 2007. 48

Grid ABCDirect current electricity transmission 51

In brief 54

Work of Line SupervisorFingrid’s Line Supervisors know the location of just about everytower in their area. Ossi Muuronen is one of these personsattending to the Finnish grid. 56

In brief 60

All in a day’s workTelemark and balance trade 61

In the netTime is now. 62

In this issue

Editorial

4

Fingrid’s ten years

The developments which ul-timately led to the estab-lishment of Fingrid com-menced in the late 1980s,when private industries

founded Teollisuuden Voimansiirto Oy.Industrial enterprises concentrated themanagement of their transmission gridto this company. The company had plansfor reinforcing its grid from the Swedishborder along the Finnish coast all theway to the Russian border. The purposeof having their own grid was to ensurethe transmission of electricity needed byindustries from their own power plantsto industrial facilities and to improve theoptions for imports of electricity.

In the early 1990s, it started to lookapparent that the mere supply of elec-tricity would give way to an electricitymarket. This was due to amendments inEuropean legislation and an objective ofa single European electricity market. Oneprerequisite for the creation of the elec-tricity market was that the grid businesswas to be separated from the electricitytrade. Imatran Voima (IVO) transferredits grid business to IVO Voimansiirto Oyin the summer of 1992 and, with theexception of cross-border lines, madethe grid available to all parties, apply-ing uniform tariffs. At around the sametime, the idea of a single grid companystarted to emerge. When the ElectricityMarket Act came into effect in 1995,it was certain that a single grid opera-tor would be established in Finland. Thegovernment backed this idea.

Imatran Voima Oy, Pohjolan Voima Oyand the Finnish government signed thefounding documents of the grid compa-ny on 29 November 1996. As was origi-nally agreed, the ownership basis of thecompany was later expanded to insur-ance companies. In this way, the majori-ty of the company shares were owned by

private enterprises, as had been planned.At the founding stage, rather strict ob-jectives were imposed on the compa-ny alongside the statutory obligations.These main objectives were the require-ment concerning equality and effi cien-cy, a programme for the reduction oftariffs, and an obligation to give the to-tal interests of the market priority overthe company’s interests in the promo-tion of the electricity market both inFinland and internationally.

The biggest business transaction bythat date in Finland was signed on thelast day of August in 1997. Fingrid (whichwas then named Suomen KantaverkkoOy) acquired grids from Imatran VoimaOy and Pohjolan Voima Oy with therelated business at a total price of 6,800million Finnish markkas (1,140 millioneuros). From the beginning of the nextday, the Electricity Market Centre (pres-ently Energy Market Authority) orderedFingrid to assume responsibility for gridoperation in Finland, and the compa-ny’s actual operations were launched on1 September 1997.

The company had a good basis onwhich to start. It obtained a technical-ly coherent and reliable grid, valid busi-ness contracts, extensive data systems,and proficient personnel. Since thepractical measures for liberalising theelectricity market had only just start-ed and since the company had a crucialrole of a trailblazer, Fingrid was subjectto suspicion and criticism during its ear-ly phases. Many customers consideredthat the new point pricing principle andthe structure of the grid tariff were un-fair. Moreover, not all customers consid-ered it necessary to invest in cross-bor-der connections.

Fingrid’s basic mission as a transmis-sion system operator was clarifi ed, andit earned general acceptance during its

fi rst few years of operation. The amend-ment of the Electricity Market Act in1998 gave the company responsibilityfor maintaining a balance between elec-tricity consumption and production inFinland. The purchase of reserve powerplants at the end of the same year en-sured proper management of the tech-nical functioning of the power sys-tem. The Finnish grid was brought toits present extent when Fingrid boughtKemijoki Oy’s grid lines.

From the very beginning, Fingrid hasworked actively to remove the obsta-cles impeding the Nordic market.Cross-border tariffs on the connectionsbetween Finland and the other Nordiccountries were abandoned in 1999. TheNordic electricity exchange was devel-oped by separating the physical elec-tricity trade from Nord Pool ASA to aseparate company Nord Pool Spot in2002. Fingrid became its co-owner afterlengthy negotiations. Nordel was madea co-operation organisation for theNordic transmission system operators.As early as the beginning of this decade,the Nordic market was the most progres-sive international electricity market inEurope and probably in the entire world.In many ways, the procedures developedwithin Nordel have been an example inthe creation of the European electricitymarket. Fingrid has participated activelyin this development work.

Co-operation with Russian organisa-tions became closer when the transmis-sion capacity on Fingrid’s cross-borderlinks from Russia became available forreservations at the beginning of 2001.During the past fi ve years, this transmis-sion service has been used by well over20 international players. Technical co-operation with the Russian party had aconcrete manifestation in the engineer-ing and construction of the third 400

5

kilovolt cross-border connection com-missioned in early 2003, and in the ren-ovations of earlier connections. In linewith the market reform in Russia, thedivision of responsibilities has becomeclearer, and the Russian grid operatorFGC UES has become our natural part-ner. Fingrid and FGC UES have devel-oped both grid operation and the prin-ciples of transmission capacity in goodco-operation.

Throughout its existence, Fingrid hasconsidered it vital to keep the systemsecurity of the grid at a high level byenhancing the operation and mainte-nance of the power system. In order tosecure electricity transmissions by itscustomers, Fingrid’s capital expenditurein the Finnish grid over the past 10 yearshas totalled approx. 300 million euros.Outages experienced by consumers as aresult of faults in the transmission gridhave consequently remained at a mar-ginal level of a couple of minutes annu-ally. The company has a grid develop-ment plan, which extends well into the2010s and is based on the customers’forecasts, for securing system securityalso in the future. New forms of co-op-eration have been created continuous-ly with various environmental parties soas to ensure that the environmental as-pects relating to the operation, mainte-nance and construction of the grid areconsidered as thoroughly as possible.

Fingrid has provided additional trans-mission opportunities on the cross-bor-der connections, anticipating the needsof the market. The transmission capaci-ty across the Swedish border has almostdoubled. This capacity will increase fur-ther when the sea cable link which iscurrently being constructed will be readyby the end of this decade. Transmissioncapacity across the Russian border hasbeen raised by 50 per cent. Capital ex-penditure in expanding the cross-bor-der capacities has totalled approx. 200million euros.

The effi ciency requirement and theprogramme for reducing the tariffs, im-

posed on the company, have requiredconstant development of operatingmodels and procedures. Adherence tothe basic mission has supported this ob-jective. The vital core expertise has beenkept in the company, and it has beendeveloped actively. The implementa-tion of grid maintenance and construc-tion projects as well as local grid oper-ation are purchased through competi-tive bidding, applying an effi cient sup-plier model. In several years, Fingrid hasbeen in the forefront internationally inbenchmarking concerning the qualityand effi ciency of grid maintenance.

Fingrid has had a positive fi nan-cial trend. Equity ratio has been raisedfrom 10 per cent to 25 per cent whileat the same time the nominal reduc-tion in the tariffs has been more than20 per cent and the de facto reductionsome 40 per cent. Fingrid’s transmis-sion tariffs are hence the most inexpen-sive on a European scale. Fingrid’s fi -nancial outlook for the future also ap-pears to be promising. One crucial con-tributory factor to this is the company’sfavourable debt programme, which hasbeen achieved at a suffi ciently high rat-ing level.

During its ten-year existence, Fingridhas well exceeded the effi ciency andtariff reduction objectives imposed onit. The company has also spent moremoney than the other Nordic countriesin raising the cross-border capacitiesand developed actively other solutionspromoting the market mechanisms. Thecompany has attained the trust of bothits owners and customers as a profi -cient and equal party. We have creat-ed a Fingrid way of working, which hasalso meant that personnel have partic-ipated actively in developing the com-pany and their own expertise. Customersatisfaction has already reached a lev-el which requires constant developmentjust to retain it.

As I retire from Fingrid at the end ofthis year, I do it with a satisfi ed mind.Together, we have been successful in

5

i m p l e -mentingthe basicmission giv-en to Fingridand in improvingour performance con-stantly in all sectors. The resultsachieved by Fingrid show that the mod-el applied to the Finnish grid businessis appropriate. Improving the function-ing of the electricity market has come tothe public eye. There is still room for im-provement in its functioning. Cross-bor-der capacities on the other Nordic bor-ders need to be upgraded so that theycorrespond to the needs of the mar-ket. However, the primary issue is to im-prove the opportunities for investmentsin production capacity, which wouldpromote competition, also in the oth-er Nordic countries alongside Finland.Constant improvement of Fingrid’s ownperformance and changes in its oper-ating environment will require a strongdevelopment approach from the com-pany in the future, too. It is hence agreat future challenge for Fingrid to re-tain its pioneering role.

It is with my best wishes that I passthis work to my successor. I would alsolike to thank our customers and otherstakeholders for constructive co-opera-tion throughout Fingrid’s ten-year ex-istence.

Timo Toivonen is FingridOyj’s President and CEOuntil 31 December 2006.

FINGRID 3/2006 6

The venue for Fingrid’s jubilee semi-nar was the auditorium of the National Museum of Finland. A concise exhibi-tion “S:t Mikael 1747” had been com-pleted at the Museum.

Marine archaeologist Anna Nurmio-Lahdenmäki gave a presentation of the wreck of the St Michel and its research. She served as the researcher responsi-ble for the most recent fi eld work on the wreck.

The rare Meissen porcelain objects represent the most valuable fi nds from the St Michel. More than 100 of such items have been recovered from the wreck. All porcelain items are fully intact and most of them still look as if they had just been bought in a shop.

Paavo Lipponen, Speaker of Finnish Parliament, brought the congratulations of the state of Finland to the transmis-sion grid operator celebrating its decen-nial history. Timo Toivonen, President &CEO of Fingrid, is shown on the right.

7

The two topics of the semi-nar had a common denom-inator, which was describedby Matti Tähtinen, Fin-

grid’s director for stakeholder relations,in his opening words. Since 1998, Fin-grid has been sponsoring underwaterresearch at the wreck of the St Michel,which lies at a depth of 40 metres offthe south coast of Finland. The compa-ny has also published an illustrated ref-erence book on the ship and its valu-able cargo. The English edition of thebook was published in conjunction withthe seminar.

“The treasures recovered from the StMichel are part of our national heritage– just like the transmission grid”, MattiTähtinen stated.

Fingrid celebrated its 10-year history in a seminarwhere the topic of the transmission grid had anaccompanying theme: the tale of the ship St Michelwhich sank in 1747.TEXT BY Maria Hallila PHOTOGRAPHS BY Juhani Eskelinen

joki in Karelia for electricity supply tothe Pitkäranta mines.

“This being the centennial year ofthe Finnish Parliament, it is appropriateto remember how Finland, which hadjust recently gained its independence,banned in 1919 the exports of electric-ity produced by domestic power sourc-es and imposed strict conditions on for-eign ownership in companies which gov-erned Finnish natural resourc-es,” Paavo Lipponen said. Hewent on to the present sit-uation, where Finland ismuch more internation-al and where barriers areno longer set.

“At the same time,

The Speaker also presented his viewof the discussion prompted by Fingrid’sownership structure, which differs fromthat in the other Nordic countries.

“Sweden and Norway apply a uni-lateral ownership model while in Fin-land the transmission system operatorhas owners from several sectors: gov-ernment, industries and energy compa-nies. In the Finnish system, no individu-al party has absolute authority, and theresponsibility is shared.”

According to him, if the grid wastransferred to the government, capitalinvestments would probably become

more complicated.“A majority of all capital expenditure

in the Nordic grid in this millennium hasbeen carried out in Finland. I can see noreason why our well-functioning sys-tem should be changed to that appliedin our neighbouring countries, or com-bined with their system,” Paavo Lippo-nen stated.

Northern model countryin energy policy

According to Paavo Lipponen, the en-ergy policy applied in Finland has beenexemplary throughout history. “TheOECD has assessed that the strength ofFinland is a diversifi ed energy produc-tion architecture.”

The demanding northern conditionsand an energy-intensive business struc-ture will continue to set the boundariesfor the Finnish energy policy also in thefuture. Energy consumption per capitain the Nordic countries is much higherthan in Continental Europe.

“The Nordic countries have alsoworked to solve the energy issues, and

Ownership basis ofgrid operator secures effi ciency

Paavo Lipponen, Speaker of FinnishParliament, discussed in his presenta-tion the impact of energy infrastruc-ture on Finnish competitiveness. He re-minded the audience of the early stagesof electrifi cation in Finland all the wayfrom 1895, when three power plantswere constructed in the river Uuksun-

we have the problem that there is notsuffi cient capacity for sales, and morecompetition is needed on the market.”

Paavo Lipponen stated that the relia-ble supply and transmission of electric-ity are necessary for the welfare of so-ciety and development of business. Hecommended Fingrid for achieving a sit-uation where “the transmission pric-es in Finland are low, and we do nothave bottlenecks like in the other Nor-dic countries.”

FINGRID 3/2006 8

the electricity exchange is a good exam-ple of a market which works despite its problems.”

Paavo Lipponen said that the growth of the Finnish national economy still rests to a great extent on the compet-itiveness of the basic industry. The con-tinuity of this competitiveness can be ensured by energy decisions which take into account our special circumstances and by means of progressive technolo-gies which are also eligible for ex-ports.

He continued that the impor-tant markets in Russia, China and India will require gigantic capital investments in energy infrastruc-ture in these countries. “Especial-ly Russia is in urgent need for ad-ditional electricity production ca-pacity. IEA’s recent energy review also states that the need for ad-ditional energy in the EU area is approximately one third from the present level by 2030.”

Balanced energy palette comes from the joint effect

of several factors

Paavo Lipponen also touched on a recent topic, energy self-suffi cien-cy, by emphasising the importance of a balanced and diversifi ed energy palette.

“The security of supply of energy must gain more attention, which is why we need more own capacity, still reduc-ing the emissions,” he pointed out.

“The production capacity must match the growth in consumption, and there-fore nuclear energy has a focal role in the versatile energy production archi-tecture in Finland. Without new nuclear power capacity, in addition to the fi fth

reactor being constructed, Finland can-not manage its obligations concerning a reduction in carbon dioxide emissions.”

When speaking about the electricity market, Paavo Lipponen emphasised the signifi cance of reciprocity. “In interna-tional trade, all players must play by the same rules,” he underlined.

He said that it is in Finland’s interests that the energy market within the entire EU is liberalised at equal terms, and that

conducted with Russia on a new part-nership and co-operation agreement.

Fingrid’s challenges continueto be demanding

In his presentation, Timo Toivonen,President and CEO of Fingrid, gave a summary of the achievements of the company over the past ten years. (The phases of the various sectors and func-

tions of the company are described in detail in other articles of this ju-bilee issue.)

The presentation focused on Fingrid’s capital investments in the grid. These have been used for securing the transmission capacity over a long term, anticipating the needs of the market. Timo Toivo-nen stated that this type of far-reaching approach is typical of the Finnish transmission system op-erator, and it should also become more common among the trans-mission system operators in the other Nordic countries.

Thanks to capital expenditure by Fingrid, the transmission capacity between Finland and Sweden has almost doubled in 10 years, and the completion of the Fenno-Skan

2 cable connection, which is present-ly being constructed, at the end of this decade will provide a considerable ad-dition to it.

“At present, Finland and Sweden con-stitute a uniform market area for 93 per cent of the time, and the completion of the Fenno-Skan 2 sea cable will bring that fi gure to clearly over 95 per cent. The problems of the Nordic market are clearly in locations other than our west-ern border,” Timo Toivonen said.

this serves the objectives of the Lisbon strategy. According to him, the Commis-sion of the EU should make it clear to its member states that they must take care of suffi cient production capacity.

Lipponen said that the EU now un-derstands the need for a shared ener-gy policy vis-à-vis Russia. He consid-ered that the Lahti summit was a turn-ing point in this respect, and added that in the coming weeks, the EU will have a shared mandate for negotiations to be

9

Important decisions still need to bemade, he said in referring to the pro-gramme presented by Nordel, the co-op-eration organisation of the Nordic trans-mission system operators, in the sum-mer of 2004 for reinforcing the trans-mission connections within the Nordicmarket area.

In the past 10 years, electricity trans-mission capacity on Finland’s easternborder has been boosted by 50 per cent.Timo Toivonen said that it is not possi-ble to raise this capacity any higher inSoutheastern Finland without compro-mising system security.

Fingrid’s capital investments will con-tinue to be extensive, because the grid isageing and requires modernisation.

Other important and demanding fu-ture challenges for Fingrid include re-taining the role of a trailblazer on theevolving European electricity marketand accelerating developments on theNordic market.

“Furthermore, in all Nordic coun-tries there is a need to promote timelygrid projects which are based on futureneeds. The system security of the Finn-ish power system and Fingrid’s own op-erational effi ciency have to be kept atthe high level attained,” Timo Toivonen

listed Fingrid’s objectives for the nextten years.

Grid operator and idealsof classical humanism

“Fingrid not only upholds the Finn-ish electricity transmission grid but alsocarries responsibility in society. Thecompany aims to be a trailblazer in itsbusiness globally, but alongside this italso cherishes traditions.” This is whatAnna Nurmio-Lahdenmäki, marine ar-chaeologist, stated at the beginning ofher presentation. She guided the semi-nar audience to a fascinating world ofanother kind, taking the listeners over250 years back in time, to the tale ofthe three-masted galliot St Michel andits treasures.

“The wreck is a versatile refl ection ofcontemporary society and its ways oflife. It allows researchers to study manythings: technical achievements, trading,seafaring, botany, zoology, anthropolo-gy, or cultural history,” she said.

By sponsoring underwater researchand by publishing an illustrated refer-ence book on the ship, Fingrid has con-tributed to shared cultural legacy reallybecoming shared.

Anna Nurmio-Lahdenmäki said thatFingrid has shown that it works on avalue basis where the fundamental ide-als of classical humanism – goodness,truth and beauty – can be found in thevery core. She added that a desire tohead forward and to retain precious leg-acy to posterity are also included in theprinciples of humanism.

At the end of the seminar programme,the audience had an opportunity to learnto know the concise exhibition “S:t Mikael1747” at the National Museum of Fin-land. The exhibition was presented byresearcher Ismo Malinen of the Mari-time Museum of Finland.

The seminar had attracted about 100 representatives of Fingrid’s customersand other main stakeholders at the auditorium of the National Museum of Finland.

The older generation of the energy business wasalso represented in the seminar. Shown in thephotograph are former members of Fingrid’sBoard of Directors Juhani Ahava (on the left)and Juhani Pohjolainen (on the right). KaleviNumminen is shown in the middle.

FINGRID 1/2006 10

Kaikki kantaverkossa tarkastustyötä tekevät pääsevät kuluvan kevään aikana kahdeksi päiväksi koulun penkille, Fingridin järjes-tämään lisenssikoulutukseen. Kurssin päätöskokeen hyväksytysti suorittaneet saavat oikeuden tarkastaa Fingridin voimajohtoja. Koulutuksella tähdätään kantaverkon kunnonhallinnan laadunvarmistamiseen ja parantamiseen.

The distribution area of Vaasan Sähkö is bilingual, with Finnish and Swedish as the languages. “Some might think that this spells extra costs, but I think that it is a major resource,” Hannu Linna says. Natural in-teraction across language bar-riers is a great thing which en-riches the working environment, he adds.

The inexpensive price level offered byVaasan Sähkö has brought the compa-ny many new customers in recent years.“Our price may not be the cheapest inFinland continuously, but it is alwaysamong the lowest ones,” Hannu Linnasays.

In addition to an inexpensive pricelevel, the objectives of Vaasan Sähkö in-clude being regionally strong and op-erationally effi cient. The corporate andmanagement culture has been devel-oped extensively to support the achieve-ment of these goals.

Increased productionboosted growth

Vaasan Sähkö acquires almost all of theelectricity it sells from power plant com-panies owned by it through Etelä-Poh-janmaan Voima Oy (EPV) and from theNordic electricity exchange Nord Pool.

The ability of people – andenterprises – to react tochanges deteriorates ifthings run well and at a

steady pace for a length of time,” Han-nu Linna argues.

In transitions, you need to take bigrisks, but the results of the correct so-lutions may be evident quite quickly, hesays.

This has been the case at VaasanSähkö, a regional electric utility oper-ating in Western Finland, where he hasserved as the Managing Director since2001. The company’s profi t trend tookan upward turn in 2002, and reachedan excellent level in the next year. Ataround the time when the electricitymarket in Finland was being liberalised,before coming to Vaasa, Hannu Linnaheaded Korpelan Voima, another powercompany in Western Finland.

A steady pace forward may be something aspired by many enterprises.However, Hannu Linna, Managing Director of Vaasan Sähkö, is much moremotivated by distinct turning points. He says that the foremost changes inhis own career have been related to transitional periods. Fingrid’s Advisory

Committee will have a new Chairman at the beginning of 2007 – HannuLinna, a man whose dominating feature is activity.

TEXT BY Maria Hallila PHOTOGRAPHS BY Ritva Välitalo and FutureImageBank

Fingrid’s Advisory Committee to have a new Chairman

Challenges involved in changesintrigue Hannu Linna

“

“The ability of people –and enterprises – to re-act to changes deterio-rates if things run welland at a steady pace fora length of time.”

11

Hannu Linna describes Etelä-Pohjan-maan Voima as a strategic partner ofhis company. Vaasan Sähkö is its larg-est owner with a share of 40.8 per cent.EPV’s electricity procurement sourcesare its associated companies Vaskiluo-don Voima Oy, Teollisuuden Voima Oy,Rapid Power Oy and Pohjolan VoimaOy.

“Timely increase in our productionshares has accelerated decisively thesuccess of our company in recent years,”Hannu Linna says.

He says that Vaasan Sähkö has dou-bled its production volume in less than10 years.

“Our resources will grow further asthe Olkiluoto nuclear power plant andTornion Voima’s plant for the com-bined production of heat and electricity,which will go on stream in the early partof 2008, will be ready.”

Changes in the operatingenvironment

While the future outlook of his owncompany looks promising, Hannu Linnais more concerned about changes in theoperating environment of the business.He says that he is occasionally frustrat-ed by the extensive role of regulation inthe electricity business. He characteris-es the decision-making which infl uenc-es the operating conditions of the busi-ness as unstable in many respects.

Linna likes to compare the compe-tition and operating conditions of theelectricity business to those of other in-dustries, which he knows well havingserved in executive management in theprefabricated house and furniture in-

dustries for 11 years in the 1980s and1990s.

“When the electricity market was lib-eralised in the mid-1990s, I returned tothe energy business with enthusiasm. Iwas sincerely glad about this businessbecoming open to competition. In in-

“You sometimes notice that the deci-sions are made at the wrong level andthat they have not been thought overfrom the market player’s viewpoint. Theimpacts on individual enterprises maybe unreasonable,” Hannu Linna says.

He sees such unanticipated impactswhich distort the market especially inemissions trading, where “the EU hasassumed the role of a soloist in a glo-bal problem”.

“Emissions trading has changed theenergy business more than expected. Ithas raised the consumer prices of bothelectricity and district heat and infl u-enced the competitive set-up. Emissionstrading as a part of the price formationof electricity has undermined the cred-ibility of a free electricity market. Emis-sions trading only concerns Europe andour electricity market is in practice onlyNordic, even though the carbon dioxideproblem is global,” Hannu Linna says.

According to him, there are local at-tempts to correct distortions caused byregulation using various kinds of correc-tion mechanisms and subsidies, such asthe feed-in tariff intended to correct theweakened position of peat or by facili-tating the terms of connection of small-scale electricity production to the distri-bution network.

“Just adding a patch on an old patchonly results in more mistakes. The dis-tortions should be corrected at the samelevel where the original decisions weremade,” he points out.

More transparency

An amendment of the Finnish Electric-ity Market Act, which will come into

The distribution network of VaasanSähkö covers Vaasa, Mustasaari,Maalahti, Laihia, Vöyri andKorsnäs and small areas in Närpiöand Jurva. “For the past couple ofyears, our business has also encom-passed the sales of broadband con-nections,” Hannu Linna says.

dustry, I had learned to know the truemeaning of competition, and this makesit diffi cult for me to accept now that theoperating environment of the electricitybusiness is subject to so many rules andtheir constant changes.”

FINGRID 3/2006 12

force at the beginning of 2007, will alsochange the structures and operatingconditions of energy utilities. Accordingto the amendment, they need to sep-arate their network business from oth-er electricity business legally and oper-ationally.

There are also requirements that thisstructural reform, which aims to preventthe cross-subvention of various busi-nesses, should be taken even further,to the total separation of ownership aswell. In the EU, Holland is implementingthis type of strict separation.

However, Hannu Linna would not liketo go this far in Finland in the name ofsecuring free competition. He believesthat present regulation is suffi cient toguarantee the required transparency. Inthis respect, he shares the view of Eure-lectric, the European co-operation or-ganisation of the electricity business. Hehas served as the representative of Finnsin Eurelectric for the past eight years,most recently as the deputy chairman ofthe Network Committee for three years.

On the other hand, he points out thatFinland was actually way ahead of thepresent arrangement in terms of theseparation of ownership before the largecompanies were given the right to ac-quire the distribution networks.

“At that point, I proposed that verti-cal integration of the business should beprevented,” he says.

The structural change required bythe amended act has already been im-plemented at Vaasan Sähkö: at the be-ginning of 2006, the electricity networkbusiness was transferred from the parentcompany to Vaasan Sähköverkko Oy.

Strong voice of the business

Fingrid’s Advisory Committee, whichconsists of the representatives of elec-tricity transmission customers in theFinnish grid, is an important forum forHannu Linna. The Advisory Commit-tee discusses shared topical issues in thebusiness from the viewpoint of varioustypes of players.

“Fingrid needs the voice of the busi-ness, and this voice is strong in the Advi-sory Committee,” the new Chairman ofthe Committee says.

Involvement in the Advisory Commit-tee has convinced him of the impor-tance and functioning of this organ.

“It genuinely tries to fi nd new ap-proaches, and these efforts are sure tolay a foundation for the fi nal solutions,”he believes.

Hannu Linna feels that the most im-portant duty of the Advisory Commit-tee is to keep up to date. This year, theagenda of the Committee has comprisedexceptionally heavy issues.

“We have discussed the sea cable fromRussia and the power reserve situationextensively and profoundly,” he says.

Hannu Linna says that the versatilecomposition of the Advisory Commit-tee, which represents the various typesof players, guarantees that many, alsoopposing, opinions are brought to sur-face. “If this wasn’t so, the AdvisoryCommittee would have no meaning,”he emphasises.

Hannu Linna’s chairmanship coin-cides at a period when, according to hisown words, energy matters are more im-portant than ever before. As if to under-line the truthfulness of these words, yetanother international power failure tookplace in the weekend preceding this in-terview: overloading in a part of the gridin Germany led to a disturbance impact-ing half of Europe.

“In Finland, the suffi ciency and secu-rity of supply of electricity and relatedsafety have been so good for 30 yearsthat we occasionally forget what this alldepends on. So as to retain the good sit-uation, the aspect of security of supplymust be the foundation of all solutionstaken in the transmission grid and in thesolutions of all electricity market play-ers,” Hannu Linna points out.

13

FINGRID 3/2006 14

TEXT BY Tom Pippingsköld PHOTOGRAPHS BY SXC

FINGRID 3/2006 14

When Fingrid acquired the transmission grid businesses of Imatran Voimaand Pohjolan Voima in August 1997, it was the biggest asset transaction inFinland by that date executed in cash terms, having a value of 1,139 millioneuros (6,770 million Finnish markkas). Arranging financing for the trans-action was a major challenge for the recently-founded company. In tenyears, Fingrid’s corporate finances have stabilised, and its equity ratio hasgrown from the initial 10 per cent to a level of 25 per cent.

When Fingrid commen-ced its actual businesson 1 September 1997,

the sellers of the grid – Imatran VoimaOy, IVO Voimansiirto Oy and PohjolanVoima Oy – were paid a total of 209million euros (1,240 million markkas)as part of the purchase price. Thesefunds came in the form of equity andfrom the 30-year capital notes issue.

For the remaining part of the price,930 million euros (5,530 million mark-kas), the sellers gave a term of payment

Steady coursefor Fingrid’s fi nances

years

15

tablished a domestic Medium TermNote Programme and launched twoserial bonds. These bonds were arrangedthrough a tender procedure and theywere also oversubscribed, almost twotimes. The amount issued within thebond maturing on 15 September 2001was 61 million euros and the amount is-sued within the bond maturing on 18April 2006 was 32 million euros.

Moreover, the company agreed withthe Nordic Investment Bank (NIB)on a credit facility of 84 million eu-ros. A loan was also obtained from theEuropean Investment Bank (EIB), alt-hough it was not withdrawn until thespring of 1998.

In the autumn of 1997, the compa-ny signed both a domestic CommercialPaper Programme and a EuroCommercial Paper (ECP) Programme.At the end of the year, it had 346 mil-lion euros worth of commercial papersissued under both the domestic andECP Programme.

pital notes could be included in thecompany’s equity.

The tenor was 30 years, but the termsof the capital notes included an opti-on to call the notes on 15 May 2007and 15 May 2017. The capital noteswere arranged through a tender pro-cedure, and they were oversubscribed1.5 times, which indicated the interestof investors in the company even befo-re it had commenced ordinary businessoperations.

Debt fi nancing

Since the company aimedto pay back the remain-der of the purchase price

to the owners quickly andlaunch the company’s own funding, itsigned a 7-year syndicated revolvingcredit facility of 390 million euros withan international and domestic bankinggroup in August 1997.

In November 1997, the company es-

SYNDICATED LOANAS A BACK UP

BRIDGING FROM

SELLERS

SYNDICATEDLOAN

CAPITAL NOTES

EQUITY

EXTERNAL BRIDGING

(DOMESTIC CP, ECP)

NIB

DOMESTIC MTN

SYNDICATEDLOAN

CAPITAL NOTES CAPITAL NOTES CAPITAL NOTES

EQUITY EQUITYEQUITY

SYNDICATED LOANAS A BACK UP

EIB

EMTN

ECPDOMESTIC CP, ECP

EIB, NIB

DOMESTIC MTN

SYNDICATEDLOAN

EMTN

until 30 May 1998. Fingrid set an ob-jective to arrange its own fundingquickly, and consequently paid the lastinstalments of the remaining purcha-se price to the sellers on 30 December1997.The ambitious objective was met,but how did it all happen?

Equity fi nancing

Fingrid’s capital structu-re was determined by thecharters of the company.In accordance with these,the equity ratio must be

at least 20 per cent. WhenFingrid started its business, the

equity of the company was composed– in addition to the share capital – ofa share premium account and capitalnotes. The share capital consisted ofseries A and B shares. The owners ofthe series A shares were the foundingshareholders: Imatran Voima Oy (pre-sently Fortum Oyj), Pohjolan Voima Oyand the Republic of Finland. As a re-sult of lengthy negotiations, prominentFinnish pension, life and non-life in-surance companies became the share-holders of the series B shares. The sha-re capital and share premium accountaccumulated to a total of 112 millioneuros.

In its founding stages, the compa-ny utilised a debenture of capital notenature and issued capital notes worth138 million euros on 1 September1997. This was a signifi cant fi nancingoperation in those days, because in ac-cordance with the amendment of theFinnish Companies Act, which cameinto effect on the same day, the ca-

Figure 1. Trend in Fingrid’s capital structure 1 September 1997 - 30 September 2006

FINGRID 3/2006 16

Remainder of the purchaseprice paid

At the end of the fi rst fi nan-cial year, the company hence

had 250 million euros of equity fi nan-cing, 568 million euros of loans with-drawn from international and domes-tic investors and banks, and 346 milli-on euros of commercial papers, all the-se totalling 1,164 million euros.

In this way, by the end of December1997 the company had arranged all fi -nancing required by the business ac-quisition, and it paid the sellers the re-mainder of the purchase price by 30December 1997.

Credit rating and changingof capital structure

As early as when found ingthe company, it was clearthat it will acquire an inter-

national credit rating in orderto better utilise the international mo-ney and capital markets.

In order to achieve a high rating, itwas necessary that the equity ratio wasat a suffi cient level. This is whythe company utilised the capitalnotes in the formation of its ca-pital structure, because in thosedays capital notes could be in-cluded in equity in the balancesheet.

When the company had launch-ed its own funding in the au-tumn of 1997 and after the fi rstfi nancial year was behind, it wastime to apply for an internation-al credit rating. Moody’s Rating

Services assigned Fingrid a rating ofAa3 and Standard & Poors (S&P) a rat-ing of AA in the spring of 1998.

Later, in November 1998, S&P lowe-red its rating slightly to AA-, because atthat point the Rebublic of Finland de-cided to cut down its ownership in therecently established Fortum Oyj, whichwas a major shareholder in Fingrid.

Since then, Fingrid has had the sameunchanged credit ratings of Aa3 andAA- from Moody’s and S&P respecti-vely.

In the spring of 1998, the compa-ny had signed a frame contract for aEuro Medium Term Note Programme(EMTN) with a dealer group consistingof international and domestic banks.Earlier, the company had already issu-ed approx. 100 million euros worth ofdomestic bonds. However, the objecti-ve was to diversify the funding sour-ces further by entering the internatio-nal capital market so that the high cre-dit rating could be utilised better, i.e.having a lower margin and on the ot-her hand being able to extend the debtrepayment profi le.

Then changing almost the entire debtstructure from the original bank-fo-cused funding to primarily bond fund-ing took place next, between 1999 and2001.

After Finland started to use the com-mon currency of the EU area, the euro,Fingrid was the second company inFinland to launch a public bond in eu-ros in February 1999.

Due to the public euro emission anda high credit rating, the company wasable to pay back the bank loans in avery short period of time and borrowdirectly from investors, primarily frominternational life and pension insuran-ce companies and from bond funds byissuing bonds.

At present, Fingrid has outstandingapprox. 650 million euros worth ofbonds issued under the internationalEMTN programme (see the fi gure onthe previous page).

Risk management challenges

A high proportion of debt,and with the debt being with-drawn in many different cur-

rencies, required solid fi nancialpolicy to control the fi nancialrisks. In accordance with Fingrid’sfi nancial policy, foreign exchan-ge risks were hedged fully. Thegoal of interest rate risk manage-ment was to proportion the inte-rest rate risks of the entire balan-ce sheet to the applied tariff poli-cy as well as possible.

When Fingrid started its opera-tions, the interest rates were in anupward trend and it was necessa-

17

ry to stabilise the corporate fi nances.The company reduced the risks resul-ting from future interest rate fl uctua-tions by doing interest rate swaps andby borrowing partly at fi xed rate.

Fingrid attained a position as a re-liable and expert partner of its custo-mers when the actual operations of thecompany were stabilised in a few yea-rs, and its own fi nances developed po-sitively by accumulating the earnings.It was hence possible to reassess the fi -nancing opportunities in a more estab-lished operating environment.

The above-mentioned bond-focusedfi nancing and changing the entire debtfi nancing of the company from fi xedrate based to fl oating rate based werethe results of these reassessments. Inthis way, the company also benefi tedwhen the high level of interest rates fi -nally took a downward turn in 2003.

The interest rate risks are managedprimarily so that when the interest ra-tes are low, the company can hedge 70per cent of the interest costs over thenext fi ve years, and when the interestrates are high, the hedging level is only30 per cent.

Stable fi nances

Fingrid has adopted theInternational FinancialReporting Standards (IFRS)

in its fi nancial reporting.Companies issuing public securitiesmust adopt these standards no laterthan during the fi nancial year of 2007.Since institutional investors are a vitalstakeholder for Fingrid both as an ow-ner and fi nancier, the company’s Board

of Directors decided in 2003 that thecompany will adopt IFRS reporting asearly as 2005, i.e. at the same time asmost Finnish listed companies.

Today, Fingrid’s fi nances are stable,and the goal is to retain the equity ra-tio at approx. 25 per cent (FAS).

Demanding duties still left

In view of fi nances and fund-ing, Fingrid’s foremost chal-lenges include management

of interest rate risk as well asmanagement of price and volume riskresulting from loss energy purchases.The management of both of these app-lies a similar philosophy: the goal is tohedge the next few years.

Fingrid’s tariff policy stems from aprinciple according to which the com-pany does not aim to include poten-tial future risks in its tariff in advance,but pricing is based on the present costlevel, and momentary market changescan be covered temporarily by meansof the price fl exibility allowed by thecontracts, if such disturbances occur.

Moreover, since interest expense andloss energy costs have a major impacton corporate fi nances, Fingrid’s hed-ging policy and improved equity ratioprovide the necessary ”buffer” if surpri-sing changes were to emerge on themarket in the future.

FINGRID 3/2006 18

Fingrid’s capital investments anticipate theNEEDS OF CUSTOMERSAND MARKETFingrid has two main considerations in the development of the transmissiongrid. One is attending to the customers’ present and future transmissionneeds at a high level of system security, and the other is promoting thefunctioning of the electricity market by reinforcing the transmission capacityof the grid, anticipating market needs. Moreover, safety requirements mustnaturally be considered.TEXT BY Teuvo Kortesoja PHOTOGRAPH BY Juhani Eskelinen

years

19

During its ten years of existence, Fingrid has used a total of approx. 300 mil-lion euros in capital investments in the grid, based on increasing electricityconsumption, ageing of the grid, and connection of new power plants.

- 400 kilovolt lines 600 km- 110 kilovolt lines 500 km- new transformer substations (400 kV) 8- new transformer capacity (400 kV) 6,000 MVA.

Extent of the Finnish grid at the end of 2006:

- 400 kilovolt lines 4,400 km- 220 kilovolt lines 2,300 km- 110 kilovolt lines 7,500 km- transformer substations (400 kV) 30- transformer capacity (400 kV) 15,600 MVA.

Grid development programmeensures system security

During the past ten years, the Finnishtransmission grid has not had a singledisturbance with extensive consequenc-es. The outage period experienced byconsumers as a result of grid faults hasremained at a level of a couple of min-utes (Figure 1). The outages are mainlycaused by climatic factors.

The company maintains a constant-ly up-to-date grid development pro-gramme, which aims to secure reliableelectricity transmission to the custom-ers also in the future. During the next sixyears, a total of some 1,100 kilometresof transmission lines will be construct-ed in Finland. About 400 kilometresof these will be 400 kilovolt lines andsome 500 kilometres will be 110 kilovoltlines. Moreover, the 220 kilovolt grid inNorthern Finland will expand by approx.200 line kilometres.

Fingrid’s goal is to build the new linesin conjunction with existing lines dueto environmental considerations. Some600 kilometres of the new lines willbe constructed in existing rights-of-

ests when developing the grid. Accord-ingly, Fingrid has increased transmis-sion capacity both on Finland’s westernand eastern border based on this obliga-tion which was later also recorded in theElectricity Market Act.

The most important projects whichhave boosted the transmission capacityacross the border between Finland andSweden have comprised the series com-pensation of 400 kilovolt AC connec-tions between the two countries, seriescompensation of north-to-south 400kilovolt lines in the grid in Finland, andupgrading of substations having bear-ing on the transmission capacity. Thetransmission capacity of the existing seacable link has also been increased.

The transmission capacity will growfurther signifi cantly when the secondsea cable link to Sweden, which is underconstruction, will be ready at the endof this decade. Figure 2 shows the im-pact of the investments on the transmis-sion capacity across the western borderof Finland.

The transmission capacity on the east-ern border of Finland grew by 50 percent when the third 400 kilovolt trans-mission connection between Russia andFinland was commissioned at the be-

Figure 1 Reinfrocements ofFinnish grid 1997 - 2006

ways, about 400 kilometres parallel withpresent lines, and only approx. 100 kilo-metres will be built on completely newroutes.

Fingrid’s capital expenditure in trans-mission lines and substations in Finlandwill total approx. 65 million euros peryear in the coming years.

Total interestsof the market have priority

When Fingrid was being founded, oneof the objectives imposed on it was thatthe company is to promote the func-tioning of the electricity market so thatthe total interests of the market are giv-en priority over the company’s inter-

Figure 2 Transmission capacity onthe western border of Finland (MW)

ginning of 2003. This also necessitat-ed the reinforcement of the 400 kilovoltgrid between the Helsinki and Kymen-laakso regions.

The technical reliability of the two

Imports Exports

under construction undercon-struc-tion

The Finnish grid has been reinforced as follows:

min

/yea

r

transmission connections originally builtin the 1980s has been improved consid-erably as a result of good co-operationwith Russians. The connection arrange-ments have split the imports into twoparts which are independent of eachother. It has hence been possible to raisethe transmission capacity to its presentmaximum value of 1,300 megawatts.Figure 3 shows the impact of these in-vestments on the transmission capacityacross the eastern border of Finland.

When also considering the Fenno-Skan 2 link which is under construc-

in the 330 – 400 kilovolt grid in Nor-way has been just under 400 kilometres.In Sweden and Denmark, the additionsto the 400 kilovolt grid have been verysmall.

Insufficiency of investments in theother Nordic countries is refl ected neg a-tively in the market. The impact of thegrid on the market mechanisms can beillustrated by the period of time duringwhich the market on both sides of theborder remains uniform. The actual sit-uation in 2005 is shown in Figure 4.

The investments made in the cross-border capacity between Finland andSweden have decisively decreased thelength of time during which Finland isseparated as a price area of its own. Atpresent, such restrictions typically ac-count for approx. 5 – 10 per cent oftime.

Once the new sea cable link betweenFinland and Sweden is ready, it is possi-ble to go clearly below the level of 5 percent, which is Fingrid’s goal. In this case,the market will be restricted in extremesituations only. The investments re-quired to eliminate these remaining re-strictions are no longer sensible in viewof national economy.

It appears that once Fenno-Skan 2 isready at the end of this decade, thereis no more need to raise the transmis-sion capacity between Finland and Swe-den because of the needs of the electric-ity market. However, Fingrid and Sven-

FINGRID 3/2006 20

230 TWh/a 380 TWh/a 400 TWh/a

Figure 3 Transmission capacity onthe eastern border of Finland(400 kV, MW)

tion, Fingrid’s total capital expenditurein raising the cross-border transmissioncapacities is approx. 200 million euros.These projects have elevated the availa-ble transmission capacity from approx.2,000 megawatts to 4,000 megawatts.This corresponds to some 25 per cent ofthe peak load electricity consumption inFinland. The target in Continental Eu-rope in this respect is a level of approx.10 per cent.

Fenno-Skan 2 to reduce marketrestrictions to a minimum

During the past ten years, some 600 kil-ometres of 400 kilovolt lines have beenconstructed in Finland. The net increase

ska Kraftnät have plans for a third 400kilovolt AC connection between North-ern Finland and Northern Sweden. Thetransmission capacity of the two cross-border connections commissioned inthe 1970s is fairly low, and it is prob-lematic to arrange outages on them. Along-term outage on one of the linestranslates into a considerable restrictionin the transmission capacity made avail-able to the market. However, the thirdconnection would not really increase thetotal capacity offered to the market.

Fingrid has spent more money in thegrid than the other Nordic countries.Despite the extensive investment pro-gramme, the price level of grid transmis-sion in Finland has decreased by almost40 per cent in real terms even thoughat the same time the company’s equi-ty ratio has been raised from the initial10 per cent to the target level of 25 percent.

Fingrid’s investments in the grid willalso continue to be extensive. Duringthe next six years, more than 1,300 kilo-metres of new transmission lines will beconstructed in Finland. Moreover, the re-serve power capacity built in the 1970swill require extensive renovation and re-placement in the next ten years.

Despite these investments, Fingrid in-tends to retain the stability of both theprice level of grid transmission and itsequity ratio.

Figure 4 Size of uniform market area and shareof uniform market price of total time.

of time of time of time

21

Long-term grid development calls for good and closeinteraction with the customers and the other Nordictransmission system operators. The objective is thatthe necessary grid projects can be executed in acontrolled and timely manner.

TEXT BY Pertti Kuronen PHOTOGRAPHS BY SCX

Mere forecasts are not suffi cientGrid planning calls forclose co-operation

T he typical execution pe-riod of a transmissionline project is present-ly fi ve years or more. In-

dustrial units and power plants can becompleted in less than two years. Thesefacts were the starting point when Fin-grid launched confi dential and increas-ingly thorough customer co-operationin 2002 for the development of region-al grid planning. As such, these effortshave long traditions.

Regional development needs

As a practical measure, the Finnish gridwas divided into 13 regions based ongrid structure and geographical factors.Discussions were conducted with cus-tomers in each region concerning theneeds to develop the grid as well as an-ticipated consumption and productionvolumes.

The grid development needs werecompiled in a regional plan where in-dividual issues were not distinguishable.Once the regional plan is ready, confi -dential grid plans for each customer willbe drawn up together with the custom-er.

Initial planning revealed clearbenefi ts

The fi rst phase of planning, which tookthree years, was completed in 2005 in all13 regions. This procedure turned outto be very useful to both Fingrid and itscustomers.

This phase did not reveal actual se-vere problems, but, for example, it was asurprise that electricity consumption inLapland will grow faster than expected.

years

FINGRID 3/2006 22

This is why Fingrid launched an extensive220 kilovolt line project from Rova niemivia Kittilä to Vajukoski in Sodankylä, in-cluding the necessary substations.

A new round of planning will start atthe beginning of 2007, and the objec-tive is to go through all regions at inter-vals of about fi ve years.

Needs of the electricity marketextend beyond Finland

The electricity market is already open inthe Nordic countries and it is also open-ing in the other parts of Europe. In viewof the transmission grid, the challeng-es concern cross-border transmissionneeds and the other parts of the 400kilovolt grid. Naturally, reinforcementsin the highest voltage levels serve allcustomers connected to the transmis-sion grid.

The fi rst grid plan covering the en-tire Nordic market area was completedin 2002. The plan was drawn up in closeco-operation between all Nordic trans-mission system operators.

The analysis brought to surface fi veforemost Nordic grid projects which canbe used for responding to the challeng-es of the electricity market of the 2010s.One of these projects is the ongoingconstruction of the second sea cablelink between Finland and Sweden. Thisproject due to be ready in 2010 will raisethe transmission capacity by 800 mega-watts. The transmission capacity of thepresent sea cable is 550 megawatts.

Nordel has already launched the nextstage of analysis of what is needed inthe Nordic grid after the completion ofthese fi ve projects.

The Finnish grid has been divided into 13 regionsfor the planning of the transmission grid.

1. Lapland2. Kemi and Tornio region3. Oulu region4. Kainuu5. Ostrobothnia6. Savo-Karelia7. Central Finland8. Southern Ostrobothnia9. Pori and Rauma region10. Häme11. Southwestern Finland12. Kymenlaakso13. Helsinki region

400 kV grid220 kV grid110 kV gridother transmission lines

23

Increasing unit sizesin power production

Ten years ago – like still today – the larg-est power plant units in Finland were lo-cated at Olkiluoto in Western Finland.These units originally had a power of 710megawatts, but subsequent moderni-sation has elevated the power to morethan 850 megawatts. We are now fac-ing a new step when the new Olkiluoto3 unit, due to be commissioned in 2010,will be connected to the grid at a powerof 1,600 megawatts.

Adapting Olkiluoto 3 together withthe Finnish grid has been a long-termand challenging duty. In all, the variousanalyses have taken about fi ve years.They have examined and developedvery detailed issues concerning the re-inforcement of the grid as well as thestructures and regulation properties ofthe plant. The end result is a solutionwhich ensures continued system secu-rity of both the power plant and of thetransmission grid.

The co-operation conducted has beenconstructive and close, based on mutu-al trust. The connection of the plant tothe grid employs highly innovative so-lutions, such as so-called system pro-tection which can be used for shedding300 to 400 megawatts of loads prima-rily at groundwood plants and refi nermechanical pulp plants simultaneous-ly if the new power plant unit is dis-connected from the grid. In this way,the Olkiluoto 3 power plant unit is “re-duced” to a size of 1,300 megawatts inview of its impact on the grid. The im-plementation of system protection has

been enabled by positive co-operationwith Finnish large-scale industries.

Grid Code securessystem security

The earlier plans and dimensioningprinciples used as the basis of grid oper-ation have now been compiled in a Nor-dic Grid Code. One component in thisCode are the shared terms and condi-tions for connection to the grid. TheNordic Grid Code is published on the In-ternet at Nordel’s home pages.

Fingrid has revised the general con-nection terms and the specifi cations forthe operational performance of powerplants, based on the Grid Code. Thesewill be taken into use in new and re-newed contracts as of the beginning of

2007, after confi rmation by the EU. Theterms of connection as well as the tech-nical system requirements are supple-mented by separate guidelines which fa-cilitate the engineering of the custom-er’s connection. Particular attention hasbeen paid to ensuring the mutual func-tioning of industrial connections.

The engineering and operating princi-ples applied have resulted in a very highsystem security both in Finland and inthe other Nordic countries. The theoret-ical likelihood of a major disturbance inthe present grid is in the region of oncein 30 years.

Fingrid intends to retain the good lev-el of system security also in the future.This is one of the main principles of griddevelopment.

1. Fenno-Skan 2, project in progress,complete in 2010

2. Connection between Central and SouthernSweden (Sydlänken), decided, technicalsolution undecided, completein about 2013

3. Nea-Järpströmmen, decided,complete in 2009

4. Skagerrak 4, no decision5. Great Belt, decided,

complete in 2010

Total capital investmentsapprox. 1,000 million euros.

Priority cross-sections in the Nordel grid,agreed in the summer of 2004

FINGRID 3/2006 24

TEXT BY Matti Tähtinen PHOTOGRAPH BY Gorilla

Fingrid has succeeded in its objective to improve thegeneral grade for its performance, received throughcustomer feedback. At the turn of the millennium, thegrade was just above 8 on a scale from 4 to 10. Afterthat, customers have rated Fingrid’s grid service withan excellent grade in several consecutive years.

FROM GOOD TO EXCELLENT

Close co-operation be-tween customers andother stakeholders onone hand and Fingridon the other hand was

perceived as important as early as whenthe company was being founded. TheAdvisory Committee was established toserve as the forum of co-operation. TheAdvisory Committee brings forward thecustomers’ views and also supervises

Customer satisfaction

Fingrid’s performance. Customer satis-faction is measured regularly.

In the customer satisfaction survey inthe spring of 2000, customers rated ourperformance with a grade of just over 8on a scale from 4 to 10. We set a newvision for customer relations: we shouldearn an excellent grade, i.e. 9 or 10,from our customers.

The main ideas of strategy were fl ex-ible customer-oriented service, fruit-ful operative co-operation, and effi cient

interactive data exchange. The successfactors were in-depth customer knowl-edge, management of change, skills fornatural co-operation, proactive con-tacts with customers, and broadmind-ed utilisation of new customer serviceapproaches.

The most essential practical actionconsisted of making the customers ex-tensively involved in the preparation ofthe grid tariff that was to be revised for2002 to 2004, and development of in-

FINGRID 3/2006 24

Scale of grades: 4 to 10

Gri

d cu

stom

ers

years

25

teractive operating models both in cus-tomer service and regional grid plan-ning.

Challenges of monopoly status

At a round the same time, an editori-al with the heading “Impartiality makesno compromises with theory” was pub-lished in this magazine. The article dis-cussed the challenges involved in thesales of grid service from the protectionof a monopoly status. The main contentof the article was summarised in threeparagraphs:

“Fingrid is the only seller of grid ser-vices in Finland. According to the tradi-tional thinking pattern, this would meanthat Fingrid does not have to do anysales work; after all, there is no compe-tition, either. This is how it is in theory,but only in theory.

What Fingrid sells is an impartial gridservice with equal service and priceterms. This also involves selling a com-promise to the entire clientele. Func-

tional compromise solutions absolute-ly require that the customers and othermarket parties have trust towards Fin-grid. - -

The combination of impartiality anda monopoly status is subject to almostnatural doubt, which means that attain-ing trust requires both high-quality andcomprehensive customer efforts. In viewof Fingrid’s good operational and fi nan-cial results, the input in long-term cus-tomer co-operation has paid off.”

The wordof the customers weighs

We had a simple principle when we werebuilding the structure of pricing appliedto the grid service: the customers de-cide.

Initially, the grid fees concerned pro-duction and consumption in equal pro-portions. When the next three-year tariffperiod was being planned, it was statedthat there is no reason to circulate thegrid costs via the price of electricity, sothe fees were allocated almost entirelyto consumption.

Another main reason for the changewas the stabilisation of the compa-ny’s income fl ow when the cross-bor-der fees on the Nordic connections wereremoved.

After this, the main issue in the tar-iff structure has been how the smallergrid burden caused by regional produc-tion and customers who use electricityover a long period of operation shouldbe taken into account.

Fingrid’s customers are presently quitesatisfi ed with the structure of grid pric-

Pricing structure of main grid service in 2007

Trend in transmission price, %

Regional/distribution

network

Russia

winter period/other times

= Connection point fee 1,000 € per month cross-border fee

Transmission price

Transmission price, real

in

in

+

ing, which is why there are no structuralchanges in sight.

The operating model applied by Fin-grid has enabled an almost 40 per centreduction in the real price of grid serviceover the past 10 years. The price level ofgrid service in Finland is hence the mostinexpensive in all Europe.

Listening and discussing

Throughout its history, Fingrid hasfounded its relationships with its cus-tomers and other main stakeholders onspecialists and on an expert approach.We wish to endorse an open dialogueand to provide an opportunity to assessour operations, no matter whether weare dealing with network plans drawnup together with the customers, routes

of transmission lines, substation con-tracts, or clearing of faults in the pow-er system.

Fingrid’s Advisory Committee, whichconsists of the representatives of ourcustomers and other market players, hasdone pioneering work as a promoter ofinteraction. We have applied the samemodel to the development of power sys-tem operation and network operation,and most recently to the promotion ofpower system technology and exper-tise as well as stakeholder relations per-taining to environmental considerationsand offi cial matters. As many as some60 representatives of our customers andother stakeholders participate in thework of our various committees.

We have received good feedback, bothfrom within and outside our business, of

FINGRID 3/2006 26

the quality of our electronic services. Atpresent, we are upgrading our Extranetpages intended for our stakeholders sothat these pages will be even more com-prehensive and user-friendly.

Successful choices

When comparing the mode of operationand organisation of Fingrid’s customerinterface to other transmission systemoperators, two signifi cant differencescan be found. First of all, from the verybeginning, the customer interface in ourcompany has been the responsibility ofa specifi c organisational unit, and ap-pointed customer service managers takecare of the customer relations.

Another difference is that we do nothave a specifi c department or functionjust for regulatory matters and regula-tory authorities, as is the case in manyother countries.

It is to be hoped that we can contin-ue to focus on and trust the views of ourtrue regulator – all our customers – andhence secure the total interests of theFinnish society on the evolving electric-ity market.

In many consecutive years, the gradeobtained by us through customer feed-back has been 9, which is considered asexcellent. This encourages us to proceedon the chosen path also in the next dec-ade.

The front page of Fingrid’s Extranet site showshow diverse issues are covered by corporate functions.

27

During the past ten years, disturbanc-es in the transmission grid have causedan average outage of only a couple ofminutes per year to consumers. This hasbeen achieved as a result of persistentdevelopment work.

Of course, all power systems involve arisk of a major disturbance if faults ex-ceeding the dimensioning faults occurin them.

Model of two control centres

When Fingrid started in business, powersystem operation was considered as oneof its core areas in the implementationof system responsibility.

The Power System Control Centre waslocated in conjunction with the compa-ny’s head quarters in Helsinki in 1998.

The system security ofthe Finnish grid has beenat an excellent level for alength of time. There havebeen occasional extensiveblackouts in other parts ofthe world, but Finland has notsuffered from them. The mostrecent major disturbance inFinland took place more than30 years ago. The engineeringand operating principleapplied to the Finnish powersystem is to make prepara-tions for the worst possiblesingle fault at any givenmoment.

The main duty of the Power SystemControl Centre is to ensure the func-tioning of the Finnish power system inall situations. Other important duties inview of the market are congestion man-agement and taking care of the balancebetween electricity production and con-sumption in the whole of Finland.

A signifi cant reform in system opera-tion was carried out in 2001, when sev-en regional and local control centreswere closed and regional operation con-trol was centralised in the Network Con-trol Centre established in Hämeenlinna.The Network Control Centre is respon-sible for the control of the 110 kilovoltnetwork and for the planning and im-plementation of all switching relating toservice outages. The model of two sep-TEXT BY Reima Päivinen

PHOTOGRAPHS BY Juhani Eskelinen

High system securityrequires constant preparations for the worst case scenario

years

FINGRID 3/2006 28

arate control centres secures suffi cientreadiness for surprising crises.

Inter-Nordic security

An important cornerstone for powersystem operation in Finland is provid-ed by the inter-Nordic System OperationAgreement, through which the trans-mission system operators in Sweden,Norway, Denmark and Finland agree onthe principles applied to the operationof the Nordic power system.

The agreement lays the foundationfor shared procedures in system opera-tion and frequency regulation and pro-motes signifi cantly the effi cient use ofresources for instance in view of reservesrequired by fault situations.

Reserve power throughpurchases and contracts

In 1999, Fingrid acquired a total of672 megawatts of gas turbine capaci-ty in its direct ownership or in its con-trol through access rights contracts. Thegas turbines are needed as fast reserve indisturbance situations.

There are bilateral long-term contractswith power plant owners and industries

on reserves required by the maintainingof frequency. One important feature hasbeen the opportunity to agree on theuse of shedded industrial loads as re-serves for the power system. The con-tracts extend as far as to 2015.

Market effi ciency throughtransmission capacity additions

The liberalisation of the electricity mar-ket has been refl ected in the increasing-ly effi cient use of the grid. The transmis-sion situations between Finland and theother Nordic countries have varied dras-tically on the basis of the prevailing wa-ter reservoir situation and market priceof electricity. Fingrid has used signifi -cant capital investments to add to thetransmission capacity in recent years. Asa result, it is only rarely that Finland isseparated into a price area of its ownbecause of insuffi cient transmission ca-pacity.

The transmission lines and substationequipment need occasional repairs andmaintenance. It is challenging to sched-ule the outages so that they cause aminimum of disturbance to the market.

Balance service rules work well

The scope of Fingrid’s system responsi-bility was expanded in 1999, when bal-ance responsibility was also added to it.Fingrid assumed responsibility for main-taining a continuous balance betweenelectricity production and consumptionin the whole of Finland and for drawingup a nation-wide balance settlement af-ter each hour.

An important milestone in powerbalance management was achieved in2002, when the inter-Nordic regulat-ing power market started in full scale.Since then, players in the various Nordiccountries have been able to participatein the regulating power market, and theNordic regulating power resources areused effi ciently on a market basis.

The Network Control Centre inHämeenlinna is responsible forthe control of the 110 kilovoltnetwork and for the planning andimplementation of all switchingrelating to service outages.Shown in the photograph areNetwork Control Centre operatorsKati Koivunen and Juha Tirri.

29

The present balance service rules andpricing mechanism for balancing powerwere created during the contract peri-od for the year 2000. The goal has beento make it reasonably easy for a play-er to enter the electricity market and tobecome a balance provider, consider-ing the aspects of cost correlation andmatching principle.

The present balancing power mod-el has turned out to be good, and theuse of balancing power has stayed ata low level. Only minor changes havebeen made to the contract terms overthe years.

An excellent accuracy was reachedin a couple of years in balance settle-ment, i.e. in the nation-wide settlementof electricity transaction volumes. Thevolume of unsettled balancing power isonly a few megawatt hours per month.

The deadlines applied to the settle-ment procedure were shortened fromthe deadlines required by authoritiesthrough a contract between the balanceproviders and Fingrid, without compro-mising the accuracy of the settlement.The nation-wide balance settlement iscompleted in less than two months.

Up-to-dateoperation control tools

The operation control system suppliedby an American company in the mid-1990s was very progressive in its days,and it has been a reliable control tool forten years. The operation control systemwas later complemented by a separatesimulator, which has been used for prac-tising ordinary operation situations andalso the clearing of serious and very rare

disturbances, both among our own per-sonnel and together with customers.

The operation control system will beupgraded extensively in early 2007, af-ter which it will serve control rooms andFingrid’s experts even better for manyyears to come.

State of the power systeminterests the players

Fingrid shows the real-time electricityproduction, consumption and transmis-sion situation on its Internet pages. Thepage showing the state of the powersystem is by far the most popular choiceon Fingrid’s Internet pages, also amongparties other than the electricity marketplayers who need it in the managementof their power balance. Especially in thewinter peak load situations, the numberof visitors on this page grows manifold.

Volume of transmissionlosses to a minimum

Transmission of electricity in the grid inFinland causes annual losses of approx. 1terawatt hour, which is just over 1 per centof electricity consumption in Finland.

Fingrid purchases the loss energy forits grid from the electricity market, pri-

marily from the electricity exchange.The purchases apply a cautious princi-ple, with the purchase price hedged wellin advance. The goal is to minimise thevolume of losses in grid operation so asto reduce the costs, still not jeopardisingsystem security.

Good co-operation bringsbenefi ts to all

System operation is based on the co-op-eration of various parties. Close co-op-eration with the customers’ operatingorganisations in Finland together withNordic co-operation are a preconditionfor continuously good system securi-ty. Co-operation with the Russian partyand future co-operation with our Esto-nian colleagues are important in termsof fl uent system operation and provi-sions for disturbance situations.

Fingrid’s Internet pages provideinformation on issues such as thereal-time electricity production,consumption and transmissionsituation in Finland.

FINGRID 3/2006 30

Facilitating the mechanisms ofthe electricity market is one ofFingrid’s main duties. The com-

pany would not even exist had the mar-ket not been opened, which resulted ina need for a neutral transmission gridservice.

The Finnish and Nordic electrici-ty market is already well advanced, andwe have been assisting other Europeancountries as they have got under way.More and quicker results were probablyachieved in the early phases of the re-form than in recent years. The function-ing of the market, which attracted gen-

Not a sprint but aSTEADY MARCH TOWARDSA GENUINELY FREE ELECTRICITY MARKETTEXT BY Juha Kekkonen PHOTOGRAPH BY FutureImageBank

The early phases of electricity market liberalisationprobably gave an unrealistically optimistic idea of thereform. It seemed that the objectives were attainedquickly and easily. However, maybe what we are actuallydealing with here is a long march before the centennialmonopoly is turned into an open, well-functioning market.

eral satisfaction for quite some time, hasbeen subject to increasing criticism lately.

First steps of market freedom

In view of the market, one of the fi rstimportant issues for Fingrid was thetransfer of nation-wide balance man-agement to the recently founded gridoperator. The principles of balance ser-vice became transparent and equal toall. This made market access easier.

The expansion of the spot electricityexchange from Norway and Sweden toFinland was also among the foremost

steps in the early stages. This requiredrearrangements in the duties, struc-tures and ownership of the Norwegian-Swedish Nord Pool and the EL-EX ex-change, which worked in Finland. TheElspot market was opened in Finlandin 1998, which was followed by the re-moval of cross-border tariffs from ourNordic borders.

It took several years before the organi-sation of the Nordic electricity exchangereached its present set-up. The electrici-ty exchange is based on Nord Pool Spotwhich caters for the exchange trade ofphysical electricity and which is ownedby the Nordic transmission system oper-ators (TSOs). In practice, its spot marketdetermines the daily price of electricity.EL-EX’s product was modifi ed into anElbas intraday market which also cov-ered Sweden and has since expanded toDenmark. Moreover, the TSO’s arrangeda separate market place for regulating

years

31

power which they need during the on-going hour.

Alongside the electricity exchange,there is also bilateral physical trade. De-rivative products both on the OTC mar-ket and on Nord Pool ASA’s exchangeare available for price hedging. NordPool ASA is also an important clearinghouse.

Harmony and transparency

The TSOs have attempted to remove therestrictions of electricity trade not onlyby reinforcing the grid but also by har-

monising the rules and practices be-tween the Nordic countries.

Fingrid’s capital investments are dis-cussed in another article in this mag-azine. Nordic harmonisation has con-cerned issues such as transmission tar-iffs, which are rather uniform for elec-tricity producers within a certain range.The allocation of transmission capacityto electricity trade is mainly uniform.

The most recent harmonisationproject concerns the cost basis and pric-ing of balance service. This would alsopave the way for a Nordic retail market,which is a political objective. House-

holds can presently choose their suppli-er, but only between those operating inone’s own country.

Transparency is a characteristic trait ofthe Nordic market as compared to thesituation prevailing in the other parts ofEurope. Suffi cient and identical availa-bility of market information is vital formarket credibility and for a level play-ing fi eld.

There is much information availableon the TSOs’ Internet pages and espe-cially on Nord Pool’s website. How ever,the large players naturally have moremarket information at their dispos-al than the smaller players, and there isstill work to be done to improve trans-parency.

Nordic market provides anexample for others

Fingrid has also focused on devel-oping the European electricity market.These efforts have two types of goals.On one hand, there is a desire to en-sure that the market players in Conti-nental Europe need to play by the samerules as their competitors in Finland andin the other Nordic countries, i.e. with-out monopoly advantages given by theirhome market.

On the other hand, there is a needto fi ght tendencies in the EU’s legisla-tion that would impede the Nordic mar-ket mechanisms. These goals have beenachieved to a great extent; in fact, theNordic solutions have often been adopt-ed as an example in the EU.

For Finland, a very important issue iswhat types of principles are applied tothe outer borders of the European mar-ket area.

European Transmission System Operators(ETSO)

Members (presently 35 members)TSOs conducting co-operation with ETSO

FINGRID 3/2006 32

ETSO as a crucial developer

ETSO (European Transmission SystemOperators) has been a focal forum forFingrid. ETSO has achieved an estab-lished position as one of the key partieswhen market development is preparedwith the EU Commission and nationalregulators. In other words, ETSO is notjust a lobbyist, but it works for concretesolutions.

ETSO’s concrete achievements includethe removal of cross-border tariffs inEurope and a compensation system forthe costs of transit transmissions. ETSOalso serves as a think-tank for new ide-as and solutions, with the topics rangingfrom co-operation between TSOs andelectricity exchanges as well as bottle-neck management all the way to stand-ards applied to data communication onthe market.

The challenges of European TSO co-operation comprise the large number ofparties involved, different market devel-opment stages in various countries, dif-fi culties in the mutual co-operation be-tween regulators, and vertical integra-tion of power companies, which restrictsthe independence of many TSOs.

Heading on – albeit more slowly

The Nordic countries made good progressfor several years when there were sharedinterests and a political will. We are stillway ahead of the other parts of Europe.However, the pace has slowed down re-cently. The issues at hand are increas-ingly complicated in technical terms oreconomically, which also makes it morediffi cult to agree on them.

The Nordic electricity market was lib-eralised in a situation with excess sup-ply capacity. The price of electricity de-creased and was very cheap for a lengthof time. The price has risen clearly asa result of the excess capacity meltingaway and many other reasons. This hasalso brought to surface disappointmentand criticism towards the market mech-anisms.

However, the price trend depends on anumber of external reasons such as risein the price of fuels, and emissions trad-ing. In many countries, political reasonsprevent the construction of almost anytype of production capacity. Investorsfeel that the regulatory environmentis too uncertain for long-term invest-ments. On the other hand, it is only nowthat we have reached a price level whereinvestments in new capacity are viable.

One could say that the actual marketmechanisms work quite well. However,there are threats to the market, such asexcessive concentration of enterprisesand abuse of market power.

The market can be and must be de-veloped further, as has been stated in somany recent reports. Transparency canbe enhanced, competition supervisioncan be intensifi ed, and the functioningof the electricity exchange can be im-proved.

The TSOs have their own role in re-ducing transmission bottlenecks and inharmonising rules of the game. This willbe in Fingrid’s focus also in the future.

EIA process on the Seinäjoki –

Tuovila transmission line launched

New 400 kilovolt line in Ostroboth-nia makes preparations for a highervoltage level

F ingrid has launched the environ-mental impact assessment (EIA)procedure for the route of the

new 400 kilovolt transmission line fromthe Seinäjoki substation to the Tuovi-la substation in Mustasaari in westernFinland.

The route of the planned transmissionline will be located in the areas of Seinä-joki, Ilmajoki, Ylistaro, Isokyrö, Vähäkyrö,Laihia and Mustasaari. The length of thenew line is approx. 55 kilometres. It willalso replace the present aged 110 kilovoltline between Seinäjoki and Tuovila.

The new 400 kilovolt transmission linealso makes preparations for a shift-overfrom a voltage level of 220 kilovolts to400 kilovolts in the transmission net-work in the coastal regions of Ostroboth-nia. This will take place in stages over thenext 10 to 20 years as it will become nec-essary to replace the present 220 kilo-volt transmission network in the regiondue to its ageing. The new towers of theplanned 400 kilovolt transmission linewill also hold the 110 kilovolt transmis-sion line between Seinäjoki and Tuovila.

The transmission line route has onemain option, which is located in theplace of the present Seinäjoki – Tuovila110 kilovolt line. On the line section be-tween Tuovila and Laihia, a 110 kilovoltline will also be constructed on the same

33

Revised guidelines for transmissioncongestion management within the EU

The foremost changes brought bythe new regulations concern thecommunication of transmission

congestions and transparency of infor-mation. The new rules also require thatcross-border transmission capacity mustbe made available on market basis to elec-tricity trade parties throughout Europe.

For several years now, the Nordiccountries have been voluntary forerun-ners in the transparency of informationsupplied to the electricity market. Thenew regulations also brought some visi-ble changes to the Nordic countries.

During the past summer, the defi -nition principles of capacities and themaximum capacities during the normalgrid situation in the Nordic countrieswere published on Nordel’s and NordPool Spot’s Internet pages. The moreaccurate publication of the causes andlocations of transmission congestions isbeing prepared.

IN BRIEF

The European Commission has decided on new guidelines for the manage-ment of electricity transmission congestions and informing of the congestions.The decision came into effect 20 days after it was announced in the EU’s Offi -cial Journal, i.e. on 1 December 2006. The decision constitutes legislation whichbinds the EU member states.

The transmission system operators(TSOs) were given an obligation to re-port production interruptions and dis-turbances in excess of 100 megawattsto the market. In the Nordic countries,this information will be supplied in co-operation with Nord Pool Spot and theNordic TSOs.

Inspired by the new guidelines, ETSO(European Transmission System Opera-tors) is also implementing a web-basedsystem referred to as ETSO Vista, whichwill present issues such as the transmis-sion capacities of cross-border lines aswell as planned and actual transmissions.The new system was published in ETSO’sseminar in Brussels in November.

The new guidelines oblige the TSOsto use the bottleneck revenues primarilyfor projects specifi ed in advance to alle-viate the transmission congestions. Thisdecision is in line with the model ap-plied by Nordel.

Hannu Haasereceived honorary titleTarja Halonen, President of Finland,granted Hannu Haase, Managing Directorof Rovakaira Oy, the Finnish honorary titleof insinöörineuvos on 1 December 2006.Hannu Haase has been a member ofFingrid´s Advisory Committee since 2001and served as its Chairman in 2005 -2006.

towers. Various technical structural alter-natives will be examined in the vicinityof housing.

Information on the project is availableon the Internet (in Finnish) at www.fi n-grid.fi (Ympäristö ja voimajohdot =>YVA-menettelyt). The pages also contain rel-evant maps.

Fingrid willmake a furtherreduction in theprice level of gridtransmission

Fingrid’s positive cost trend has en-abled the company to transfer part ofthe profi t to improve the company’sbalance sheet. During the 10-yearhistory of Fingrid, its equity ratio hasgrown from 10 per cent to approxi-mately 25 per cent.

In line with increasing equity ratio, theprice level of grid transmission has hada decreasing trend. Most recently, thecompany reduced the transmission pric-es by an average of 5 per cent at the be-ginning of 2006.

Based on its positive economic out-look, Fingrid has decided to reduce theprice level of grid transmission by an-other 5 per cent as of 1 January 2007.

Fingrid has reduced the transmissionprice by a total of over one fi fth duringits 10-year existence.

FINGRID 3/2006 34

Fingrid’s asset management isfounded on profi cient per-sonnel. Personnel order thework for both maintenancemanagement and construc-

tion projects. Consulting services arenot used even in conjunction with themost demanding orders.

The operating model adopted re-quires focus on the essential and con-stant development of performance.This has been the case throughout Fin-grid’s existence. The procurement doc-uments are updated and modifi ed reg-ularly, and the processes are adjustedto the changing circumstances.

It is also important to transfer knowl-edge and experience from the seniorspecialists to new personnel. Compre-hensive and versatile in-house training,master-journeyman model and suc-

Fingrid purchases allprojects, services andmaterials relating to itsasset management fromoutside expert companies.The company wishes to bea knowledgeable customer,i.e. it wants to know exactlywhat it orders. This is whyeverything essential fromthe specification of workto its supervision is keptin the company’s hands.This is a demanding modelof operation, but the goodresults are rewarding andencourage us to continue onthe selected path.

Asset management is guided by ademanding butsuccessful operating model

TEXT BY Kari KuuselaPHOTOGRAPHS BY Juhani Eskelinen, Mika Kuivalainen and Risto Ryynänen

Pirkanpylväs tower being erected in Lempäälä.

years

35

cessful recruitment are the foremostmeans for ensuring expertise.

Modern tools have been developedand acquired to facilitate the work ofspecialists: database software, newdata transmission methods, camerasurveillance, and mobile technology.These are used for automating routinejobs and also for developing new infor-mation and methods so that the per-formance can be enhanced further.

Co-operation ensuresimprovement in supplier

relationships

Constant development of suppliers andtheir continued expertise are vital forFingrid’s success. This is why we em-phasise versatile development work. Wearrange various types of training pro-grammes, where participants from thesuppliers’ personnel are also invited.We also hold regular performance de-velopment and feedback sessions withthe suppliers and monitor the qualityof the suppliers’ performance throughaudits.

A specifi c Extranet interface, FgPart-ners, has been developed for the com-munications between the supplier andcustomer, for the ordering of small as-signments, and for reporting complet-ed work. Through FgPartners, the sup-pliers can update their information di-rectly in Fingrid’s data systems. Sincethe same information only needs to beentered in the system once, overlap-ping work is avoided and the qualityof information is improved. The sup-pliers can also use FgPartners to accessinformation which has bearing on theirwork, without the need to have the in-formation on paper.

Development efforts for occupation-al safety also represent co-operationbetween the customer and supplier atits best. This takes place through meanssuch as joint development projects,harmonisation of safety requirements,effi cient monitoring, and swift elimi-nation of defects detected.

Fair play as the basic principle incompetitive bidding

Fingrid’s competitive bidding policycan be summarised in two words: fairplay. All suppliers are aware of the rulesof fair play and trust the rules.

Fingrid’s construction projects andmaintenance management services aresubject to competitive bidding in ac-cordance with Finnish competition leg-islation and the EU’s directive on pub-lic procurement. All willing parties havebeen able to participate in competitivebidding.

During the procurement process, in-formation has been delivered to all par-ties simultaneously, and the quotationshave been opened in a separate open-ing event. The prices are not discussed

after the quotations have been submit-ted, but the correct pricing needs tobe done during the quotation phase.The contracts have been awarded tothe quotations which are economicallymost advantageous as a whole. All bid-ders have been informed of the quota-tion of the winning contractor.

The market has worked well, and asuffi cient number of quotations havebeen received for the projects so thatcomparisons have been possible and soas to verify the correct price level.

The assignments have gone rath-er evenly to different suppliers. Espe-cially in large projects, the price levelhas often been lower than budgeted.However, it is also in Fingrid’s intereststhat the suppliers conduct their busi-ness from a sound basis and take care

Fingrid’s assets

- 14,000 km of transmission lines

- 105 substations

- 2,000 km of optical fi bre, and

- 19 units of gas turbines (515 MW)

Equipment installation at substations requires great precision and skills.

FINGRID 3/2006 36

of the continuity of business, and thatthey can develop and secure their ownexpertise in the long term.

Value and numberof projects have doubled

Substation and transmission lineprojects are ordered as total contractsapplying the turn key principle. Thesupplier is hence responsible for de-tailed engineering, materials, construc-tion and installation work, as well astesting and commissioning. Fingrid isresponsible for the specifi cation of theproject, commercial procurement doc-uments and technical specifi cations.Naturally, Fingrid also manages andsupervises the project.

One of the benefi ts of this operatingmodel is that it allows to decide care-fully and individually in each case whatis needed and what is not. Unambigu-ous roles of the supplier and customeralso ensure that either party is alwaysresponsible for each decision and ac-tion. This improves the quality of theassignments and cost control essen-tially as compared to a model wherethese roles are mixed.

The crucial thing in the execution

of the projects is that the supplier andcustomer have seamless co-operation.This prevents mistakes and also bringsout good solutions to problems surfac-ing during the project.

The value and number of projectshave doubled since the early years ofFingrid. It is therefore necessary to de-velop the operating model continuous-ly.

Presently, we are developing qual-ity control and assessment so that inthe future we can take the suppliers’past quality and well-performed as-signments into account better than be-fore when choosing suppliers for newprojects.

Top results in maintenancemanagement

High-quality maintenance manage-ment – i.e. maintenance and localswitching operation – guarantees thatthe number of disturbances and faultsremains small. Competitive biddingof maintenance management assign-

ments ensures that the price level ap-plied is correct.

Fingrid has always been in the topleague in comparisons. The companyhas participated fi ve times in the in-ternational ITOMS benchmarking inmaintenance management. Every time,Fingrid has represented best practice,which means that both its quality andcost level have been among the best inthe benchmarking study.

Competitive bidding in maintenancemanagement follows the same prin-ciples as the procurement of projects.Competitive bidding is public and fair.The basic service contracts for main-tenance management are drawn upfor three years at a time. The suppli-ers are chosen on the basis of quali-ty and price.

Competitive bidding follows Fin-grid’s regional sectors. This guaranteesthat the faults are repaired by supplierslocated close to the relevant site. Spe-cial maintenance (such as that of trans-formers and circuit breakers) is ordered

Occupational safety is vitalin transmission line work.

Crossing lines atLapijoki.

37

on a nation-wide basis for 1 – 3 yearsat a time.

In the maintenance managementpolicy, we have shifted from mere time-based maintenance to condition-cen-tered and reliability-centered mainte-nance (RCM). Based on earlier expe-rience, equipment history and impor-tance of the relevant component, spe-cialists decide on a proper maintenanceprogramme for each item of equip-ment.

Modern data systems have facilitatedthis work greatly. The databases con-tain information on Fingrid’s equip-ment and its maintenance and faultsover a period of more than 15 years,which is unique for almost any trans-mission system operator in the world.

The documents and drawings oftransmission lines and substations aresaved in electronic databases so thatboth our own personnel and supplierscan examine them at their own offi ceor even at the relevant site.

The locations of all substations andtransmission line towers have also beensaved electronically. This facilitatesfi nding the right route for examplewhen driving to the fault site.

Success factor:correct basic solutions

Alongside profi cient personnel, correctmodes of operation and reliable sup-pliers, Fingrid’s primary success factorshave comprised correct basic solutionsand policy decisions made in Finlanddecades ago. These concern both thestructure of the grid and the outlining,implementation and maintenance ofthe various parts of the grid. Naturally,these have been developed constantly.

North AmericaAEP American Electric PowerBCT British Columbia Transmission CompanyITC International Transmission CompanyPGE Pacifi c Gas & ElectricTVA Tennessee Valley Authority

EuropeELI EliaEON E.On-NetzESB ESB National GridFGC Federal Grid CompanyFIN Fingrid OyjLAN LandsvirkjunNG National GridREE Red Electrica de EspañaREN Rede Eléctrica Nacional, S.A.STA Statnett

ITOMS = International Transmission

Operations & Maintenance Study

ITOMS 2005 participants

The condition of trans-formers is monitored bymeans of camera surveil-lance via the Internet.

TEN Tennet

Australia/New ZealandPLQ Powerlink QueenslandPNT SPI PowernetTND TransendTGD TransGridTRP Transpower New ZealandECT Electranet

OthersTNB Tenaga Nasional BerhadTCO TRANSCOESK ESKOM

In the international maintenance benchmarkingfor the transmission grid, based on results from2004, Fingrid was again in the top league.

Transmission grid maintenance in 2004

good

poor

Syst

em s

ecur

ity

Costs small

Includes: Substation maintenance Transmission line maintenance

high

FINGRID 3/2006 38

The commissioning of the third400 kilovolt transmission connec-tion between Finland and Russiawas celebrated in a working meet-ing at the Vyborg converter stationin February 2003. The represent-atives of the Russian and Finnishparties are shown here in front ofthe converter station.

years

39

ELECTRICITY FROM RUSSIA

TEXT BY Matti Tähtinen PHOTOGRAPHS BY Eija Eskelinen,Juhani Eskelinen, Leni Lustre-Pere and SXC

Commercial imports ofelectricity from Rus-sia to Imatra in Fin-land were launchedby Enso-Gutzeit Oy

in co-operation with Masinoexport andImatran Voima Oy in the early 1960s.The imports took place from the Rus-sian power system using a separate 110kilovolt connection, which was fed fromthe Svetogorsk and Lesogorsk hydro-power plants. A corresponding solutionwas used a few years later when elec-tricity imports started to the municipal-ity of Inari in Lapland from Kaitakoskiin Russia.

In a couple of decades, the total im-port volume grew to 100 megawatts.Imports took a steep upward turn inthe 1980s when imports of electricityfrom Vyborg were started through new

400 kilovolt connections to the Yllikkäläsubstation, which was specifi cally builtfor imports in the Finnish grid. The in-itial power was 300 megawatts, but bythe mid-1980s the capacity was raisedto a maximum of 900 megawatts after

the expansions of the Vyborg DC sub-station were completed.

Imatran Voima was in charge of elec-tricity imports on the basis of commer-cial policy contracts between the Sovi-et Union and Finland. The imports weresupplemented by a procurement con-tract of 100 megawatts signed by Teol-lisuuden Voimansiirto Oy at the begin-ning of the 1990s. The company alsolaunched the implementation of a 400kilovolt cross-border connection of itsown. However, this project was inter-rupted by the dissolution of the Sovi-et Union.

Transmission capacityfor all parties

After the long-term electricity importcontracts on the 400 kilovolt connec-

Electricity imports from Russia to Finlanddraw on traditions of more than four decades.Fingrid wishes to have genuine co-operation,

which benefits all parties, with Finland’s easternneighbour. It is important to use jointly acceptedprinciples for assessing the future and its needs.

FINGRID 3/2006 40

tions from Russia expired, the vacantcapacity could be made available to allparties as of the beginning of 2001.

Fingrid started the present-type trans-mission service at a power of 900 mega-watts. The capacity was later upgradedby 400 megawatts once the third cross-border line project, which had been in-terrupted earlier and later on acquiredby Fingrid, was completed in early 2003.The third cross-border connection wasused for connecting the modern 450megawatt combined cycle gas powerplant in northwestern St Petersburg di-rectly to the Finnish power system.

In Finland, this addition in import ca-pacity required not only a new cross-border line but also the construction ofthe Kymi 400 kilovolt substation andfrom there a transmission line of 100kilo metres to Länsisalmi in the Helsin-ki region. The system security of theseconnections has since been improvedmainly by Russians, who have carriedout extensive renovation projects at the

Vyborg DC substation and especially onexisting cross-border lines.

The cross-border transmission serviceoffered by Fingrid has been used by avery international clientele over the pastsix years. More than 10 actors have im-ported almost 60 terawatt hours of elec-tricity to the Nordic market during thatperiod. Moreover, some 20 other Finnishand foreign players have been interestedin capacity reservations.

Close co-operationwith various parties

Transmission of electricity from Rus-sia has required from Fingrid long-termand close co-operation not only with itscustomers but also especially with OAO”RAO UES of Russia”, which was re-sponsible for the Russian grid and for-eign connections. Later on, the numberof responsible counter parties has in-creased as the electricity market reformin Russia has progressed.

At present, Fingrid’s partner in long-term planning and contracts in Russiais JSC ”FGC UES”, which is responsi-ble for the main transmission grid andcross-border connections, as well as itsregional companies and offi ces in St Pe-tersburg and Vyborg. The technical op-eration of the entity composed of thethree 400 kilovolt transmission lines andrelated commercial issues require dailycontacts with ”SO-CDU for UES”, JSCwhich is responsible for the operation ofthe Russian power system, and also withJSC ”INTER RAO UES” which is the sell-er of electricity.

Goal: increased fl exibility

Administratively, the co-operation be-tween the grid companies in Finlandand Russia is co-ordinated by a systemcommittee, which assembles at leasttwice a year and more often if necessary.Three permanent work groups with spe-cifi c programmes work under the com-mittee, focusing on the preparation andfollow-up of contracts, planning of gridoperation, and technical co-operation.In many cases, preparatory work hasbeen expanded to ad hoc work groupsor projects and to an annual custom-er meeting.

The results and goals of co-operationare discussed in regular negotiations be-tween executive management. Present-ly, we are renewing the system contractgoverning the technical and commercialexecution of the transmission service.The goal is to increase the fl exibility ofcapacity use and operation of connec-tions and to make better preparationsfor extraordinary situations.

Partial view of the control panel at the Vyborg substation.

41

Future plans based on facts

There has been increasing interest inconstructing new cross-border con-nections and in new imports, especial-ly within companies other than the tra-ditional players. Technical analyses havebeen drawn up concerning cross-bor-der lines which would start from eitherthe Kola Peninsula or Viena Karelia. How-ever, most publicity has been attractedby the sea cable project from SosnovyiBor to Finland.

However, the increasing power bal-

ance defi cit in the St Petersburg re-gion needs to be taken into accountwhen assessing the availability of eventhe present level of imports. Addition-al imports would raise the risk of im-port restrictions even further and wouldalso entail major drawbacks for the sys-tem security of the Finnish power sys-tem and for the functioning of the Nor-dic market.

It has been estimated that the imme-diate need for capital investments in theRussian power system would be tens ofbillions of euros. This is a huge challenge

not only to the Russians themselves butalso to foreign investors.

It is necessary to make the co-oper-ation between the Russian and Finnishenergy players and parties infl uencing iteven closer than before. It must be pos-sible to assess the future and the com-ing needs on both sides of the borderusing mutually accepted principles. Forseveral years now, Fingrid has focusedand will continue to focus on genu-ine co-operation with its Russian coun-ter organisations, with this co-operationbenefi ting all parties.

FINGRID 3/2006 42

Environmental considerations are an important part ofFingrid’s corporate image. The implementation of newtransmission line projects depends crucially on attendingto environmental responsibility as well as possible.

TEXT BY Sami Kuitunen and PHOTOGRAPHS BY Juhani Eskelinen, Sami Kuitunen and SXC

FROM PROTECTED AREASTO STAKEHOLDER FORUMSFingrid’s many dimensionsof environmental responsibility

Environmental matters arepart of everyday life forboth Fingrid and its part-ners. One practical exampleof the management of en-

vironmental matters are the environ-mental reviews of maintenance. Suchreviews have been conducted at some70 substations of Fingrid having infl u-ence on the environment. An impor-tant point in environmental responsi-bility is that when the transmission linesare being maintained and developed, we

the same role in the transmission systemas all other towers. The landscape tow-ers, which have also won design awards,still prompt people from all parts of theworld to contact Fingrid and commendtheir appearance.

The landscape towers represent in-dustrial design which intends to makethe transmission line adapt better to itssurroundings.

The decision on landscape tow-er projects is made individually in eachcase. By the end of 2006, Fingrid has

functioningof the trans-mission gridand for grid de-velopment. One essen-tial component of this respon-sibility is the planning of new necessarytransmission connections and executionof the projects.

Over the years, plans for transmissionline projects have resulted in the launch-ing of more than 20 environmental im-pact assessments by Fingrid. The con-

constructed landscape towers in morethan 10 locations, most recently in Eura-joki and Lempäälä. The implementationof these towers follows technically andeconomically accepted solutions.

The long-term design project hasyielded a signifi cant number of imple-mented tower models, which could bereferred to as Fingrid’s landscape tow-er family.

Transmission grid – partof land use planning

Fingrid carries responsibility for the

tents of the procedures have becomeclearer during the course of these pro-cesses. There still seem to be challengesleft in line with EU-driven environmen-tal legislation and active developmentof various types of recommendations.

Over the years, Fingrid has focusedespecially on preliminary investigationsof transmission line projects so that wecould compare the available optionseven more thoroughly.

One turning point was the overall re-form of the Finnish Building Act andthe resulting Land Use and Building Act.In the Land Use and Building Act, the

are working every day on land owned bysomeone else.

Landscape towers as a fi gurehead

Transmission line towers gained a wholenew scenic dimension as a result of de-sign by Professor Antti Nurmesniemi inthe mid-1990s. Still, these towers have

Fingrid’s most recent landscape toweris being completed in Eurajoki. Alsoshown in the photograph is JormaValkama, the architect who designedthe tower.

43

FINGRID 3/2006 44

supraregional signifi cance of electric-ity transmission lines was recorded aspart of national land use objectives. Thepractical impacts of this solution can be

tors infl uencing them. Biodiversity andfi nding the positive impacts of transmis-sion line areas have become – alongsidetechnical issues – one of the most im-

scenery for the moving of butterfl ies, in-vertebrate occurring in transmission lineareas, and wolf spiders inhabiting bogslocated in these areas.

seen in Fingrid’s daily interaction with20 regional councils.

Utilisation and biodiversity

Throughout times, transmission lineshave involved a challenge to fi nd sen-sible uses for the transmission line ar-eas. A decade ago, Fingrid arranged acampaign for fi nding versatile uses forthese areas, with the campaign pro-ducing dozens of ideas. These includ-ed growing of herbs, ornamental plantsand other useful plants, grazing, andphysical exercise options.

Various environmental projects car-ried out by Fingrid together with expertshave shown that transmission line are-as have a great signifi cance for the oc-currence of plant and butterfl y speciesfavouring meadows. Research has aug-mented our basic knowledge of suchspecies and of the environmental fac-

portant areas of research and develop-ment within Fingrid.

Fingrid has sponsored biodiversity re-search in many ways. The company hasbeen involved in studying issues suchas birds nesting in transmission line ar-eas, nesting of kestrels in bird hous-es installed on transmission line towers,grazing of elks in transmission line are-as, the signifi cance of the structure of

It is justifi ed to ascertain these high-ly varied issues, because Fingrid’s trans-mission lines traverse almost 80 protect-ed areas. In addition to the above an-imal species, we have become familiarwith Russian fl ying squirrels and mostrecently with swamp frogs.

A clearing and management guide-book has been prepared for the mainte-nance of transmission line areas, and wehave studied the mechanical clearing oftransmission line areas, biological pre-vention of coppice growth, and the de-cay impacts of helicopter sawing.

Improvements through feedback

In order to improve our performance,we have always studied the opinions oflandowners concerning the proceduresapplied to our construction projects.Such inquiries have been conducted in

45

conjunction with all major transmissionline projects.

The suggestions given by the respond-ents have highlighted the need for moreinformation, and the fear of the poten-tial health hazards of transmission lineshas also surfaced repeatedly. On the oth-er hand, those landowners and residentswho have expressed their opinion on aproject feel later on that our line projecthas caused less impacts, than those whodid not express an opinion.

It is also often that Fingrid’s represent-ative has to balance between the con-tradictory views of authorities and land-owners when dealing with issues infl u-encing the route of a line. Fingrid hasalways attempted to secure the partic-ipation opportunities of citizens in thevarious phases of a construction project,and we have drawn up various checkliststo support the execution of projects.

On seven occasions, Fingrid has par-ticipated in the annual Farmari agricul-tural exhibition in Finland. Initially, ourmain duty at the exhibition was to makepeople familiar with the name Fingrid.Later, the exhibition has been important

to us because it provides an opportuni-ty to meet landowners face to face andto conduct discussions on issues such asmultipurpose uses of transmission lineareas, and construction projects.

The feedback we receive during theline construction projects is so valu-able to us that we intend to contin-ue gathering it. The implementation ofthe projects as well as research and de-

velopment work carried out have beenbacked by active and open stakehold-er interaction. Our partners have com-prised research communities, consult-ants, ministries and their various admin-istrative branches, other authorities, andlobbyists – not to forget direct feedbackfrom landowners. The stakeholder fo-rums launched this year contribute tothe promotion of these issues.

FINGRID 3/2006 46

Fingrid possesses extensive knowledge and expertise basisin Finland. The company intends to pursue that trend.Maintaining and developing the expertise of personnel ishence a focal area for Fingrid.

In its R&D which generates new expertise and expeditesfurther developments, Fingrid has focused above all onensuring the power system security.

Upon the launching of Fin-grid, it was transferred expe-rienced and profi cient person-

nel. However, constant development ofthe company’s duties and procedures hasmeant that learning new things has be-come a constant state of affairs even forthe “old hands”.

Final theses as themain means for induction

Very little know-how required by trans-mission system operation is created in

TEXT BY Jussi Jyrinsalo PHOTOGRAPHS BY Juhani Eskelinen

Finland outside our own company, andnew personnel have usually learned theirspecifi c duties after they have been hiredby Fingrid.

In many cases, new persons havelearned about power transmission gridsthrough fi nal theses required by theirstudies. During Fingrid’s ten-year history,we have commissioned or funded some80 fi nal theses or supplementary train-ing degrees. About 30 of these have beenMaster’s theses in power engineering.

The theses have been supervised bymore experienced specialists, and occa-

sionally the theses have concerned com-pletely new areas so that the supervi-sor has also had to learn new during thework. Such cases have often also useda more comprehensive control group sothat the information created would bediffused better within Fingrid.

Four levels in specialist career

In addition to the conventional manage-rial career, Fingrid applies a career pathfor specialists. Advancement on the man-agerial career is usually based on job rota-tion, comprehensive outlook and admin-istrative experience, while the specialistcareer is based on constant and deepen-ing development in an area of expertisewhich has bearing on the company, withno administrative responsibility.

The specialist career includes four lev-els, and a specialist’s independent exper-tise advances in line with these, but at thesame time the responsibility for sharing

Ari Marttinen, OperatingEngineer, at work at Fingrid’sPower System Control Centre inHelsinki.

Grid operator promotes and producesHEAVY-DUTY TRANSMISSION EXPERTISE

years

47

the information and for the independ-ent development of the relevant area in-creases also. About 90 persons have ad-vanced on the specialist career duringFingrid’s history, and some of them havealso supplemented their vocational qual-ifi cation during the process. In addition,more than 100 persons have participatedin internal job rotation.

In-house and joint training

Much of the technical training arrangedby Fingrid for its personnel has been pro-vided through the company’s own re-sources, because there is very little in-depth training on grid technology out-side the company. These efforts have re-sulted for example in a basic trainingpackage (book and lecture material) forthe transmission grid and several specialcourses.

So as to ensure that students of pow-er engineering receive high-quality edu-cation in electricity transmission technol-ogy, Fingrid has donated a fi ve-year pro-fessorship in power transmission systemsto the Helsinki University of Technologyas of the beginning of 2006. The personelected for the position has gone throughFingrid’s specialist career and drawn upher doctoral thesis in transmission tech-nology, which contributes to the teach-ing and research being focused on areaswhich are important for Fingrid.

The goal is to create a centre of exper-tise of a few persons around the profes-sorship so that the continuity of develop-ment projects in transmission technolo-gy could be ensured and also so that ex-perts with profound knowledge of trans-mission technology could be recruited byFingrid.

of major power plants. The latter werebased on close co-operation with re-search institutions and Fingrid’s custom-ers. This is a good example of how opti-mum results also call for close co-oper-ation with our stakeholders in develop-ment projects.

Interaction in development work

The focal areas in Fingrid’s R&D includeanalysis and control methods for manag-ing operational security and power trans-fers, technical solutions and maintenancemanagement which enhance system se-curity, and adapting the power transmis-sion system to its environment.

In the coming years, we will concen-trate on issues such as real-time manage-ment of the status of the Nordic pow-er system, utilisation of condition mon-itoring information on equipment, andstudying the environmental impacts oftransmission lines.

So as to make sure that R&D will cor-respond to the future needs, we will aimat active interaction with our stakehold-ers. We cannot necessarily identify all thechanges affecting us on our own, but weneed more eyes, ears and brains to sup-port our development work. To facilitatethis, we have established a technologyforum and a forum focusing on trans-mission lines and biodiversity so that wecan bring new parties to the creation ofideas.

We cannot manage on our own inR&D, but we welcome all developmentideas and co-operation opportunities of-fered to us.

The power system simulator isused for exercising normal grid op-eration and disturbance situa-tions in the grid. Almost the entirepower system in Finland has beenmodelled in the simulator.

R&D ensures the developmentof vital areas of expertise

Research and development is one wayof creating new expertise and ensuringcontinuous developments in strategicallyimportant areas. It has been characteris-tic of Fingrid’s mode of operation that itdoes not have a separate organisation re-sponsible for R&D projects, but instead,the development projects are a naturalpart of each organisational unit and workof each specialist.

Especial attention has been paid tomaintaining and promoting the systemsecurity of the grid by developing the en-gineering tools, network solutions, andgrid operation and maintenance.

As a result of the development projects,for example the fault tolerance and load-ability of the grid have been improved sothat it has been possible to double theoverall transmission capacity on the bor-der between Finland and Sweden. Thishas been accomplished through meanssuch as series compensation of the gridand modifi cations in the control circuits

FINGRID 3/2006 48

By virtue of a new act which came into effect on 15 December2006, Finnish condensing power plants which have been at stand-still are harnessed to secure electricity supply during the peakload period as of the beginning of 2007. The act is based on amodel drawn up by Fingrid. In line with the act, Fingrid will havemuch more latitude in maintaining a power balance betweenelectricity production and consumption, which has been entrustedto Fingrid.

Last January, the weatherin Finland was very coldfor about a week, alsobringing electricity con-sumption to record fi g-

ures. The all time high consumptionpeak in Finland, approx. 14,800 mega-watts, was reached on Friday 20 Janu-ary 2006.

All power plants which could be start-ed at a short notice were running, and

TEXT BY Eero Kokkonen and PHOTOGRAPHS BY Hannu Vallas and SXC

electricity was imported from Russia andSweden. Hydropower production had tobe restricted because of ice problems inrivers, and some of the condensing pow-er plants were closed for a long period oftime because their opportunities to con-tribute to market-based electricity pro-duction have become essentially pooreras a result of increased price of fuels andlaunching of emissions trading.

The peak load situation was managed

without consumption restrictions, al-though Finnish electricity supply had toresort to considerably high imports ofelectricity. Some 20 per cent of the elec-tricity consumed during that period wasimported from the neighbouring coun-tries even though electricity deliveriesfrom Russia were subject to long-termrestrictions attributable to the seller.

Continued increasein electricity consumption

Electricity consumption in Finland hasgrown at a rate of approx. 2 per cent peryear in recent years with the exceptionof 2005, when the stoppage in the pulpand paper industry reduced consump-tion signifi cantly.

It has been estimated that the growthin consumption will continue at the

Unused power plants in short startingreadiness as of the beginning of January

49

same level for some time to come. Thisalso means that the annual peak loadwill grow, although low temperaturesand the length of the cold period havesome signifi cance.

Nordel’s power situation forecast fornext winter suggests that the peak loadin Finland will grow by some 200 mega-watts from the fi gures reached last win-ter, i.e. to 15,000 megawatts.

Considerable capacity reductionsare a threat to the market

Finland has an estimated 500 – 800megawatts of separate condensingpower units which have been used verylittle in recent years or which have beenin complete standstill. This has been dueto the more expensive prices of fuels,impacts of emissions trading, and theNordic electricity market situation.

The price of heavy fuel oil in electricityproduction has more than tripled fromthe level of the mid-1990s, and the pric-es of CO2 emission trading, which com-menced in 2005, have ranged from 5 to30 euros per tonne on the market, Thisyear, Nord Pool’s weekly spot price ofelectricity has varied from 34 to 76 eu-ros per megawatt hour, while the high-est production costs of oil condensingpower have been almost 130 euros permegawatt hour.

This is why the owners of some pow-er plants have not received any pro-ceeds from the market for covering thecontinuous maintenance costs of theplants. Some of the owners have triedto reduce their costs by removing suchpower plants from readiness for use tolong-term storage and given a notifi ca-tion of the removal of the plant frommarket use.

The owners of certain power plantshave stated that fi nancial reasons forcethem to remove their plants from usepermanently. If this actually happens,the available production capacity dur-ing peak load situations in the comingwinters will decrease considerably.

Higher dependence on imports

Fingrid has analysed the power situa-tion on the basis of the estimated peakload and available production capacityin Finland, extending to the winter of2009/2010. The analyses took into ac-count the known construction projectsfor new production capacity and theimports of electricity from Estonia. Theimpacts of a fault at a large productionunit and the effects of import restric-tions of electricity were also examined.

The analyses showed that retain-ing the existing production capacity inreadiness for use is extremely important,because energy supply in the comingyears will depend crucially on importsof electricity.

In accordance with system responsi-bility imposed on the Finnish transmis-sion system operator, Fingrid has an ob-ligation to maintain a balance betweenelectricity consumption and productionduring each hour. Insuffi cient electricityproduction and potential import restric-tions will ultimately have to be man-aged by Fingrid during each hour. Inthe absence of resources, it may happenthat the only option to maintain a pow-er balance is to disconnect consumptionfor specifi c periods.

System security as the goal

About a year ago, Fingrid started to ex-amine a potential model which couldensure that condensing power capacity,which is under a threat of being closeddown, could be retained in short-termreadiness for use especially during thepeak load period in the winter. It soonbecame apparent that the introductionof the new arrangement is not possiblewithout separate temporary legislation.

The basic idea in the arrangement isthat Fingrid pays compensation to theowners of certain condensing powerunits when the owners maintain a 12-hour readiness for use in the winter pe-riod and a readiness for use of approx. 1month at other times.

Only such capacity which fulfi ls therelevant conditions and which has beenin minor use is eligible for the arrange-ment. Fingrid acquires the capacity byinquiring from the owners of powerplants which fulfi l the conditions a bidprice at which the owners are willing toparticipate in the arrangement.

Based on accepted bids, usage con-tracts between Fingrid and the pro-ducers will be signed for the period of1 January 2007 to 31 December 2008.The contracts will specify issues such asmaintaining of readiness for use andthe producer’s rights and obligationsconcerning the operation of the pow-er plant and handling of electricity pro-duced. If no inter-Nordic or other corre-sponding arrangement is created duringthe contract period, the same model willcontinue, if needed, until the expiry ofthe act using specifi ed contracts.

In accordance with the model, Fingriddoes not participate directly in electric-ity trade, but a producer is obliged to

FINGRID 3/2006 50

give electricity sales bids to the marketin accordance with a bidding structureagreed with Fingrid. The producer pricesthe sales bids, considering the require-ments laid down in the act.

The goal is to submit the sales bidsso that the disturbance caused to themarket is as small as possible. An imple-mented sales bid is an indication of mar-ket need for peak load electricity and atthe same time a clear starting signal forthe power plant in question. The pro-ducer is obliged to draw up a separatebalance settlement concerning electrici-ty production and related sales, and thesettlement shall be reported to Fingrid.

If the electricity sales bids are not re-alised but Fingrid sees, on the basis ofconsumption and production forecastsprepared by it, that some peak loadpower covered by the arrangement isneeded for the needs of the power sys-tem, Fingrid requests the starting of thenecessary power plant units. The stop-ping of a power plant is always agreedbetween Fingrid and the producer.

It was initially planned that the sys-tem would be fi nanced by allocating thecosts through separate fees to the bal-ance providers and non-Nordic importsin equal proportions. During the prepa-ration of the act, however, it turned outthat this is not possible, which is whythe law proposal presented that half ofthe costs would be allocated to the feesconcerning transmissions in Finland andthe other half to transmission fees onimports from Russia and Estonia.

The report drawn up by Fingrid wassubjected to a work group of the FinnishMinistry of Trade and Industry, and theMinistry sent it to circulation for com-ments together with preliminary legisla-tive amendments last summer. The basic

structures of the model have been dis-cussed in Fingrid’s Advisory Committee,Power System Committee and balanceseminar. The model has also been dis-cussed in several organisational meet-ings within the business.

Fingrid’s modelas the basis of the act

After the peak load situation last win-ter, the Ministry of Trade and Industryarranged two discussion events amongthe electricity business. The goal was tofi nd means for securing the readinessfor use of electricity production capaci-ty in peak load situations.

The events did not come up with anactual solution, but the necessity of cre-ating quickly a temporary model wasstated jointly. In the latter event, it wasagreed that a shared work group be es-tablished between the Ministry, the En-ergy Market Authority, and Fingrid. Thegroup’s objective was to create a tempo-rary model and draw up the necessarylaw proposal so that once passed, the actwill secure the readiness for use of therelevant capacity as of 1 January 2007.

The Ministry of Trade and Industrycompleted the law proposal by mid-Oc-tober, and the act became effective afterthe due process on 15 December 2006.The act will be valid until the end ofFebruary 2011.

The act deals with the regulations re-lating to the model on a rather gener-al level, and the procedures presented byFingrid in its report have constituted thebasis of the act.

The general justifi cations of the actestimate that the costs of maintainingthe readiness for use would be dividedso that approx. 50 per cent will be allo-

cated to the Finnish parties and some50 per cent to parties importing elec-tricity from Russia and Estonia. The feeswill be levied as part of the transmis-sion fees.

The act gives the Energy Market Au-thority main responsibility for supervis-ing the implementation of the arrange-ment. The Energy Market Authority ac-cepts the rules appended to the usagecontracts to be signed between Fingridand the producers, and these rules mustbe made public.

Model to be adopted

Fingrid has received replies to its inquir-ies concerning the power plant capacity.The replies suggest that the total capac-ity would be 600 megawatts. The totalcosts of the arrangement will be about10 million euros per year.

When this article is being written, thepreparations for the relevant agreementsto be signed with the producers and forthe related practical measures have pro-gressed so far that only the signaturesare missing.

The Energy Market Authority con-fi rmed the rules for the arrangement in-cluded in the agreement on 20 Decem-ber 2006. The rules are public and availa-ble on Fingrid´s Internet pages.

The procedures in accordance withthe arrangement and the 12-hour start-ing readiness of the power plant unitswill commence on 1 January 2007.

Grid ABCThis article series deals with the main operating principles, equipmentunits and components in the main grid. The earlier articles have dealt withsubstation equipment, power and instrument transformers, switching de-vices, operation control system, and relay protection.

TEXT BY Harri NurminenPHOTOGRAPHS BY Harri Nurminen

and Juhani Eskelinen

DIRECT CURRENTELECTRICITY TRANSMISSION

In the early days of electrifi cation,during the second half of the 19thcentury, the choice between al-ternating current (AC) and direct

current (DC) initially favoured the lat-ter. The fi rst concise electricity transmis-sion systems used direct current and de-livered electricity mainly for the needsof lighting.

The development of the AC inductionmotor led to the creation of a compet-ing system, and around the 1890s, ACsystems replaced direct current in elec-tricity distribution. As early as then, thecompetitive edges of alternating currentincluded the boosting of voltage usedon the transmission lines by means oftransformer. This enabled increasing-ly economical and loss-free electricitytransmission over long distances.

Presently, most of electricity is trans-mitted using alternating current, both inthe Nordic Nordel grid and globally. Still,ever since developments in power con-verters were achieved in the 1950s, DClinks have also been constructed. Directcurrent is in fact a better option than al-ternating current in certain special cas-es; sometimes even the only option.

The fi rst rectifi ers/inverters were im-plemented using mercury-arc valve de-vices, and from the 1970s onwards by

means of thyristor valves (such as on theFenno-Skan link). Presently, the optionsinclude power transistors used earlier infrequency converters (e.g. EstLink).

A high voltage direct current (HVDC)connection has for example the belowadvantages (+) and drawbacks (-) overan AC connection of the same capacity:

+ The transmitted power of the con-nection can be controlled freely and it isindependent of AC networks at the endsof the connection or parallel to it.

+ Power control is very quick, andavailable transmission capacity can beused as power reserve or for the powercontrol of parallel AC connections.

+ The system connects AC networksasynchronously, i.e. the networks canhave different frequency or at least dif-ferent kinds of frequency control prin-ciples (for example the Vyborg DC con-nection between the Nordel grid andthe Russian UPS system).

+ The overhead line has a simpler linestructure and a narrower right-of-way.

+ No stability problems; long connec-tions can also always be loaded up tothe thermal limit.

+ The power factor of a DC line/cableis always 1; no need for the compensa-tion of reactive power.

- The power converter stations are ex-

51

pensive and complicated (= additionalcosts).

- The power converters consumemuch reactive power which usuallyneeds to be produced at the power con-verter station.

- The power converters produce har-monics, the spreading of which must beprevented by means of fi lters installed atthe power converter station.

Thyristor building of the RaumaDC substation. Shown in the pho-tograph are Fingrid’s Line RouteSpecialist Hannu Ylönen (on theleft) and Protection SupervisorPekka Lepistö.

FINGRID 3/2006 52

The reasons for choosing direct current can be economic or technical. Be-low are the three most common application areas:

Figure 1.6-pulse bridge.

Grid ABC

Figure 2. Determination of capacityof DC connection.

1On suffi ciently long overhead lines,the additional costs caused by po-

wer converter stations are compensa-ted by a less expensive line structure.Such connections up to several thou-sands of kilometres in length have beenbuilt for example in North America, In-dia and China when utilising electrici-ty production capacity (usually hydro-power) located far from the consump-tion areas.

2In cable connections built across awaterway, the maximum available

distance for alternating current is about50 - 100 kilometres depending on thevoltage. Over longer distances, the capa-city is lost in the transmission of reacti-ve power created by the high capacitan-ce of the cable. Long and high-capacitysea cable links can only be carried out indirect current (such as Fenno-Skan).

3Due to technical and also histori-cal reasons, power systems in dif-

ferent parts of the world are not syn-chronised with each other and may alsohave different frequencies. In Europe, forexample the Nordic Nordel, UCPTE inWestern Europe and UPS in Russia areall 50 Hz systems but asynchronous witheach other. A frequency of 60 Hz is in usein North America, but there are severalsystems which are asynchronous witheach other. The main islands in Japaneven use different frequencies. Such sys-tems can be connected by means of aback-to-back DC connection, wherethe rectifi ers and inverters are located“back to back” at the same substation.Of course, there can be a cable or evena line between the systems, like betweenthe 50 Hz and 60 Hz systems in Japan.

The basic component in a conventional power converter station provided withthyristors is a 6-pulse bridge (Figure 1), where each of the six branches is referred toas valve. In simultaneous operation are always those two valves which switch the al-ternating voltages (UR, US, UT) with the highest absolute values to direct voltage(UD), which is hence composed of the fl uctuation waveform of the 3-phase alter-nating voltage.

The diode bridge, which is familiar forexample from the alternator of a car, isin a way multiplied to have three phas-es. Moreover, the ignition of the thyris-tors can be delayed by the desired cur-rent delay angle unlike with diodes,which always “pass” a positive voltage.The main principle is to use the currentdelay angle to control the magnitudeof the direct voltage at each end of theconnection so that the HVDC connec-tion starts to follow the basic equationof electrical engineering, P = U x I, inaccordance with Figure 2. The powerconverters serve as current sources (thedirection of current is always the same),and the power direction is reversed by

changing the polarity of voltage. And soyou’re ready to transmit electricity…

In practice, both the power convert-er itself and its control algorithms aremuch more complex. The purpose ofa HVDC link is to transmit large pow-er volumes in a trouble-free manner be-

53

between the bridges gives a more evenvoltage fl uctuation waveform, which re-duces considerably the need to fi lter theharmonics. The 12 valves are typicallygrouped into three towers of four valveseach, hanging from the ceiling of thevalve building.The HVDC transformers feed the three-phase alternating voltage separately toeach 6-pulse bridge. In Rauma, there arethree single-phase three-winding trans-formers, each of which feeds a 6-pulsebridge connected both to a star and to adelta. The on-load tap-changers of thetransformers assist the control of directvoltage, which is primarily carried out bymeans of the current delay angles of thepower converter.The AC fi lters restrict the access of har-monics created by the power converterto the AC network and also produce re-active power for the needs of the powerconverter. The reactive power compen-

tween the terminal substations. Powercontrol must be very precise and quickand also adapt to possible changes anddisturbances in the AC network. Along-side the actual high-voltage compo-nents, the control systems at each pow-er converter station have a crucial role.These “system brains” have constantdata communications with each other,and they are fully doubled in order toguarantee system security.

The main components of a HVDCsubstation are shown in Figure 3 andpartly also in the aerial photograph ofthe Rauma substation, which is a con-ventional HVDC station equipped withthyristors.The 12-pulse thyristor bridge in the valvebuilding is composed of two 6-pulsebridges connected in series. The 30 de-gree angular phase difference (accom-plished by means of a star-delta switch)

FINGRID 3/2006 53

Aerial photograph of the Rauma substation.

sation capacity needed is about half ofthe active power transmitted. The Rau-ma substation has three 80 Mvar units,two of which also serve as AC fi lters andthe third is a compensation capacitorwithout fi ltering.A DC fi lter is needed if the DC connec-tion leaving the substation is an over-head line, as in the case of Rauma (thefi rst 33 kilometres to the Rihtniemi cableterminal). This prevents the induction ofdisturbances to surrounding audio-fre-quency communications networks (suchas telephone networks).Smoothing reactors smooth the directcurrent by restricting the rates of changeof current. Their dimensioning has animpact on a number of factors in viewof the operation of the power converter,such as fi ltering, fault currents, and uni-formity of current at small powers.The DC fi eld connects the valve build-ing to the DC line or cable leaving the

FINGRID 3/2006 54

Grid ABC

Figure 3. Main components of a power converter station.

substation. In addition to the necessaryswitching devices and measuring in-struments for direct current and directvoltage, the fi eld houses the necessarysmoothing reactors and DC fi lters.An electrode is needed as the path ofthe return current on monopolar HVDClinks such as Fenno-Skan (there is onlyone cable between the substations).The fi gure does not include the valvecooling system, which is crucial in termsof the operation of the power converter.The cooling system leads the heat cre-ated in the thyristor valves outdoors bymeans of water circulating in the cool-ing circuit and condensers situated out-doors.The HVDC links based on state-of-the-art power transistors represent awhole new level of technology as com-pared to thyristors in terms of both ba-sic structure and control algorithms. Onthe other hand, to those knowledgeablein electric motor drives, power transis-tors are very familiar. Like frequency con-verters, the power converter serves as avoltage source, and direct current can becontrolled freely (and also reversed). The

control properties of power transistorsare excellent, but on the other hand theirlosses are many times higher than in thy-ristor technology, at least presently.The HVDC projects carried out andplanned in the world in recent years aremostly ordinary HVDC links. The marketshare of power transistors is also limitedby their maximum voltage and currentratings, which are considerably poorerthan with thyristors. At present, a trans-mission capacity of approx. 400 MW ata voltage of +/- 150 kV can be achievedwith power transistors, while thyristortechnology gives 3,000 MW at a volt-age of +/- 500 kV (e.g. the Three Gorg-es – Shanghai HVDC overhead line un-der construction in China).

However, the situation may changeas a result of developments with com-ponents. The next target level for pow-er transistors is 1,000 MW, which alsomeans doubling the maximum voltage.On the other hand, ordinary HVDC linksof +/- 800 kV are being planned in theFar East, achieving transmission capaci-ties in excess of 6,000 MW.

Estlink cablein operation The power and its direction in the

cable can be viewed on Fingrid’s In-ternet pages.

The Estlink cable connection betweenFinland and Estonia was inaugurated on4 December. The power and its directionin the cable can be viewed on Fingrid’sInternet pages on the “State of powersystem” display which is updated everythree minutes (www.fi ngrid.fi ).

The cable connects for the fi rst timethe Baltic countries to the Nordic elec-tricity market. The length of the cable is105 kilometres, of which 75 kilometresare sea cable. The transmission capacityof the cable is 350 megawatts.

The cable is initially used by the elec-tricity companies which own it. How-ever, by 2013 the ownership will betransferred to the transmission systemoperators in the Baltic countries andFinland.

Electricity production capacity in theBaltic countries presently exceeds theirown need, which is why electricity willbe transmitted from south to north atleast to begin with.

5555

IN BRIEF

Olkiluoto gas turbine power plant to rooftop height The topping-out party at the Olkiluoto gas turbine power plant was held on 12 October. This plant project is shared by

Fingrid and Teollisuuden Voima Oy (TVO), with Fingrid constructing the plant to its ownership and TVO participating inthe capital investment costs at a share of 50 per cent. The location of the plant was decided by TVO’s local need for re-serve power and the company’s opportunities to offer operation and maintenance services to Fingrid.

YIT Kiinteistötekniikka Oy and NakkilanKonepaja Oy.

The main designer of the plant is ÅFEnprima Oy, architectural design hasbeen carried out by Pori Arker Oy, con-struction planning by Insinööritoimis-to WSP SuunnitteluKortes Oy, and ven-tilation engineering by Satakunnan In-sinöörikeskus Oy.

The power plant buildings will beready in February 2007. Indoor equip-ment installations have already com-menced at the site. The installation ofthe two gas turbine sets delivered bythe German company MAN TURBO AGcommenced in November. Each set hasa power of 50 megawatts.

L.L.-P.

million euros. The project involves al-most 30 other contracts and deliveries,with the main contract for the construc-tion work being the largest. Fingrid isresponsible for the building project as awhole while TVO is responsible for thesupervision of construction work.

The main contractor in the construc-tion work is Rakennus Vuorenpää Oy,which is responsible for the building ofthe concrete-frame buildings and otherconcrete structures. The steel frame forthe turbine building as well as its wallsand roof are delivered by Normek Oy.Other contractors involved in this stageof the project are Rauman Kaivin Oy,Rauman Sähköpalvelu Oy, Vesi-Vasa Oy,

The Olkiluoto gas turbine plant to becompleted in June 2007 will satisfy Fin-grid’s and TVO’s needs for additional re-serve power capacity in the near future.The plant will reinforce Fingrid’s reservepower capacity required in the manage-ment of disturbances in the power sys-tem, and secure auxiliary power sup-ply to TVO’s power plants in the eventof disturbances in external supply fromthe transmission grid. The joint projectwas possible because the two parties donot have simultaneons needs for reservepower.

The total capital expenditure amountsto approx. 50 million euros, of which themain machinery accounts for approx. 30

In conjunction with the topping-out party, the guests had an op-portunity to visit the power plant site under the guidance ofProject Director Martti Merviö (in the bottom photograph).

TEXT AND PHOTOGRAPHS BY Reija Kuronen and FutureImageBank

The Finnish main grid, part of our national assets, needs to be che- ris hed and maintained. Fingrid’s Line Supervisors know the locationof just about every tower in their area. They are to make sure thatthe transmission lines remain in good condition and that electricitycan travel without disturbance. Line Supervisor Ossi Muuronen isone of the persons who oversees the Finnish grid. Ossi moves in thenatural environment with his senses alert.

Work of line supervisor

What are the thoughtsof Ossi, to whomthe great outdoorsare part and parcel

of both work and hobbies? How doeshe go about his work and what does hethink about it? Is there time to watchwildlife while moving in the forest? Idecided to fi nd about these things andjoined Ossi for a day.

The professional eye only pays atten-tion to the condition of the transmissionline. Are there signs of damage in thetowers, lines and foundations? Is clear-ing of vegetation needed and are theinsulators in place? Being interested inwildlife, Ossi says that he also keeps aneye on the signs of life in the forest.

Nature enthusiast and hiker

Characteristic of autumn, the dawn isgrey outside Fingrid’s Hämeenlinna of-fi ce. The clouds are hanging low and itlooks very much like rain. We start the

drive towards the fi rst target of today,the Tikinmaa substation.

It’s a long day ahead. Ossi has tak-en along his notes which show the worksites systematically. The work list con-tains sites in the same area so that thetime spent driving would be as short aspossible. Today, the work area is in theTampere region. The car takes us closeby, but the rest of the way has to bedone on foot.

On the way to the substation, we talkabout Ossi’s background. He is a Mas-ter of Science in Agriculture and For-estry and a passionate nature lover andwoodsman. The natural environment isclosely associated with both his workand leisure time. Did he fi nd his voca-tion or was it the other way around?

Forest expert brings specialexpertise to the company

“It was I who found this profession,”Ossi says. While still a student, he found

a summer job in Petäjävesi in an elec-tricity transmission company, spendingdays clearing the forest. A few summerslater, he came to Hämeenlinna to dothe same work. It later transpired thata permanent position of a Line Super-visor was available in Hämeenlinna. Thiswork suited a forest specialist and viceversa – and so the company obtainedspecial expertise for the management ofits transmission lines.

We change some thoughts about thetransfer of knowhow possessed by theageing generation to the younger em-ployees. Ossi says that he came to learnhis work from a clean slate even thoughhis colleagues helped him wherever nec-essary. After fi ve years on the job, youhave a grasp of the duties and can see“the forest for the trees”. “Still, you learnnew things all the time, for instanceabout technical issues.”

We arrive at the Tikinmaa substation.Ossi walks under the lines and looks up.This time, he is examining the newly-installed jumpers, the wires connectingthe circuits, of the down leads. He hasthe use of a camera so that the exam-ination results can be viewed later on.After careful observations, we head on.

Responsible for morethan one third of the grid

Ossi Muuronen and his colleague KariLindholm are jointly responsible for thearea of Southern Finland in the Finnishtransmission grid. This area houses morethan one third of the line kilometres in

57

FINGRID 3/2006 58

ing to a report, machinery has blockedditches. We park the car at the edge ofthe transmission line area.

“There is no point in driving the lastfi ve metres,” Ossi says and adds that hehas personally experienced what this oldwisdom of line supervisors means.

Many things to watch

It is already raining quite heavily. Wemust put on rainwear and go on footinto the forest. My rubber boot slipseasily out of inexperience, but Ossi is al-ready way ahead of me on the clearedarea.

The most important tools of Line Su-pervisors in the terrain are their owneyes and ears.

“The results of the work are based onprecise observations. You need to keepyour eyes and ears open while walkingthe lines,” Ossi says. If you miss some-thing, the consequences may be nega-tive for a great number of people. Theobjective of the work is to ensure thetrouble-free transmission of electricityand safety of power lines.

Natural environmentalways close by

In the watery conditions, we head forthe next sites. The work list comprisesinspections of reinforcements and con-creting for towers to be erected, requestfor comment from a landowner con-cerning the location of a storage build-ing, and inspections of cleared areas invarious transmission line areas. The LineSupervisor has a “photographic mem-ory” when it comes to tower locationsand transmission line areas.

Even though the day is not actual-ly something you dream of when walk-ing in the forest, the bright yellow leavesbrought by autumn glimmer amidst thegloom of autumn. The presence of thenatural environment is strong wher everwe drive.

Is it easy to move in the forest whenthere is a metre of snow? Ossi says thatit is not necessary to wade in deep snowthat often, and skis are a great help inthe winter. In terms of line maintenance,spring is the best season, because treeshave not broken into leaf yet, making it

“The results of the work are based on preci-se observations. You need to keep your eyes

and ears open while walking the lines.”

the whole of Finland, so there is muchto inspect.

Ossi drives some 50,000 to 60,000 kil-ometres a year. He spends more than onethird of his annual working hours on theroad, most of it in the summer. Ossi saysthat driving is already a routine part ofwork. While driving, he thinks about thefuture assignments, answers telephonecalls and plans future work.

Offi ce always along

Our talking is interrupted regularly asOssi answers his mobile phone. There aretelephone calls from landowners, sup-pliers and colleagues. Ossi answers, lis-tens and says that he will get back: “I’llcheck, I’ll see…” His offi ce always fol-lows him in the form of the telephone,and much of his day is spent talking onthe phone. On the other hand, you can-not do everything on the road: the ac-tual offi ce is a place for planning andscheduling the work stages and forkeeping contact with other parties.

The next stop is a transmission linearea under construction, where, accord-

59

easy to monitor the lines and move inthe terrain.

Tough spots, but you get throughthem with restraint

The forest roads seem endless, but luck-ily the rain ceases – occasionally. Ossichecks the various cleared areas andmakes a lot of notes. There are alsotough spots every now and then – af-ter all, the transmission lines traverse onsomeone’s land, and landowners do notnecessarily like that.

“The matters must be handled withrestraint, and an understanding is al-ways the goal,” says Ossi. He appreci-ates the attitude of Finns: they normallyaccept things once the matter has beenhandled appropriately and proper argu-ments have been used.

There are also near miss situations.The most recent such event, a fi re on atower in Porvoo, is still in fresh memory.A real danger lurked close, because thecollapse of the burnt tower leg couldhave caused much damage also to theadjacent transmission line.

However, successful action preventedmajor damage. Ossi is sincerely satisfi edwith the way the situation was managed– information was provided in time, ac-tion was taken swiftly, and the co-oper-ation with the supplier ran smoothly.

“I’m on the line”

Ossi tells about the days when he wasdrawing up his Master’s thesis in Lap-land in the summer. This period hasleft an indelible impression in his mind.For Ossi Muuronen, work and hobby

are linked with each other seamlessly.He has a cottage in Lapland, hundredsof kilometres from his home, which hevisits frequently throughout the year.He also says that just the other week-end, he spent the night beside a camp-fi re close to his home in the Evo hik-ing area. Forest is also a place for fi sh-ing and mushroom picking with friends,and for cross-country skiing in the win-ter. Ossi speaks of nature in a warm andrespecting manner.

The telephone rings when Ossi is re-viewing the site. “I’m on the line here,”says Ossi to the caller. They discuss thematter at hand right there and then, inthe middle of a yellow-and-grey thicket.Between the telephone calls, Ossi tellsme about the ongoing job and the re-sults of each inspection.

Mutual knowhow exchange

While walking further, we talk about theimportance of a good workplace com-munity. Ossi commends his colleagues,with whom all matters can be managedin good co-operation and understand-ing. He and his closest colleague KariLindholm share the work areas and ar-eas of responsibility. Ossi is in charge offorest-related matters in the whole ofSouthern Finland and for technical is-sues in the Häme-Uusimaa region while

Kari is responsible for technology inSouthwestern Finland.

Ossi thinks that their job descrip-tions complement each other very wellwhen knowhow is exchanged mutual-ly. Straightforward co-operation bene-fi ts each and brings more meaning tothe work.

Worries fall off in Lapland

Does Ossi’s work interfere with his lei-sure time or the other way around? Ishe interested in transmission lines evenwhile on holiday?

Ossi admits that he may sometimessuffer from a Line Supervisor’s occu-pational disease: his head starts to spinwhenever lines come into sight. Still, hesays that worries soon fall off especial-ly in Lapland, and he also tends to sep-arate work and leisure time in other re-spects, too.

Back on the road, this time towardsthe home offi ce. It’s getting dimmer,and a more unexperienced trekker isalready getting tired. Ossi has left mewith an impression of a Line Supervi-sor who is truly dedicatedto his work andwho respects thegreat outdoors.His work and inter-est meet each oth-er in a natural com-bination.

“The matters must behandled with restraint,and an understandingis always the goal.”

FINGRID 3/2006 60

IN BRIEF

Protection system faults are sometimes the reason for disturbances in electrici-ty supply. Fingrid and two Norwegian parties drew up a joint analysis of line andtransformer protection faults on the basis of fault statistics from the Finnish andNorwegian transmission grids. The results were presented last June in Stockholmin the international PMAPS conference of the power system business.

PMAPS (Probabilistic Methods Appliedto Power Systems) conferences havebeen arranged since 1986 at intervals oftwo or three years.

The PMAPS conference last summergathered some 300 participants fromabout 40 countries. The number ofconference publications was 192. Thesewere divided into fi ve topics, and aboutten publications from each topic werefi rst chosen to be reviewed by a jury. Thepublication “Protection system faults -a comparative review of fault statistics”

drawn up by Fingrid, Helsinki Universityof Technology, Sintef and Statnett wasincluded in the top league of publica-tions chosen by the jury.

The main observation in the publica-tion is that problems in line and trans-former protection are usually related toits unnecessary operation, not so muchto its failure to operate.

“In half of all cases, the unnecessaryoperation of protection results from hu-man reasons. In other words, errone-ous triggering is caused by the engi-

Dr. Liisa Haarla from Fingrid and Ph.D. Gerd Kjølle from Sintefagreed on making a comparison of protection faults in the sum-mer of 2005. Gerd Kjølle works as senior researcher in Sintefand Liisa Haarla now holds the fi ve-year position of Professorin Power Transmission Systems at the Helsinki University ofTechnology. The professorship was donated by Fingrid in 2005.

Kankaanpää – Lålby transmission lineconstructed by the French company Transel SAS

Fingrid will renew the 110 kilovolt transmission line running from Kankaanpää to the Lålby substation near Kristii-nankaupunki in western Finland. The contractor in the project costing approx. 7.5 million euros is the French compa-ny Transel SAS.

neering, settings, installation or testingof the protection. Problems occur espe-cially in modern microprocessor relays,which feature many setting options andhence also involve several potential fail-ure possibilities,” say Lauri Koivisto andPatrik Lindblad, who represented Fin-grid in writing the report.

They say that unnecessary operationis highlighted in transformer protec-tion, because transformers are expen-sive components, and their protection isoften secured through various types ofprotection.

“On the other hand, unnecessary op-eration ultimately comes in cheaperthan a failure to operate, which may re-sult in the destruction of the transform-er,” they add.

In Norway, protection faults accountfor 20 per cent of electricity not deliv-ered while the corresponding fi gure inFinland is only 4 per cent. According tothe publication, the difference is prob-ably due to geographical and structur-al differences and divergent statisticalpractices.

The construction work commencedby foundation work in December,

and the towers will be erected in thelate winter. The line with a total lengthof 81 kilometres will be constructed inparts from one station to the other so

that undisturbed electricity supply inthe region can be ensured.

The site of the new transmission linenow has a line with wooden towers,constructed in the 1970s, which will bedismantled. The new towers are guyed

steel portal supports. The disconnectorsand substation portal supports at theKankaanpää substation will also be re-newed. The line will be ready in Octo-ber 2008.

Finnish-Norwegian expert team fi nding protection faults

61

Telemark and balance service

“Good morning,” sounds the cheerful greeting from almostevery workstation in the open-plan offi ce of our unit whenI get to work after 8.30 on Monday morning. As the com-puter is switching on, the wallpaper image of snowy moun-tains takes my thoughts back to the travel plans made in theweekend. I don’t have to wait much longer before I can dotelemark turns again on the slopes.

Received e-mail brings my thoughts back to our offi ce. Abalance provider states that they have patched up their sa-les information and asks what the situation with the Sep-tember balances is.

My daily work involves information on the sales of elect-ricity by Finnish electricity sellers and measurement rea-dings on how much electricity is consumed within a cer-tain network. Since it is diffi cult to store electricity or pre-dict its consumption, someone has to take care of balan-cing the difference between the plans and actual situati-

on. As a result of our work, wefi nd out how much our balanceprovider customers have consu-med the product we sell, balan-cing power.

The day is fi lled with the ringing of telephones as our ba-lance settler colleagues throughout Finland inquire aboutmeasurements or regret the absence of readings. Someo-ne wishes to have instructions on how to process the dataand on the reporting schedule. A number Excel spreadsheetsand edi messages are sent out to the world daily so that theelectricity transactions could be settled and so that all ba-lance settlers would have identical information.

After lunch, I participate in an internal meeting on theemissions of gas turbine plants. We review the situationconcerning the emission rights of the plants and schedu-les for verifi cation in the next year. Everything seems to bein order.

I return to our unit just in time for the afternoon coffeebreak. While sitting on the couch of the coffee room, we tryto solve a tricky problem someone has just presented. It isnot always easy to come up with a sensible answer, but cre-ativity is a resource that rarely runs out, so our happy laugh-ter can be heard far away.

Our offi ce is getting quieter as my early bird colleaguesare switching off their computers and heading for home.This is a good time to concentrate on reading. Pasi Lintu-nen is expecting my comments on our new balance settle-ment tool which is presently being drawn up.

I become absorbed in reading the related document un-til the ringing of the telephone interrupts me. There are somany numbers on the display that all of them do not evenfi t in the space provided. As I pick up the handset, I havetime to think that being an international call, this is goingto take more than my local dialect. Luckily, the caller speaksclear English, and after we have talked for a while, he seemsto be content with the replies received on balance serviceand the terms used in the balance service agreement. Thistime there is no reason to continue in writing – not all fo-reign players are instantly up to date with the proceduresapplied in Finland.

Before going home, I print the agenda of the RECS groupmeeting to be held tomorrow. I am in the group to hearabout news concerning the certifi cate market for renewableenergy in Finland and elsewhere in Europe. This informationis of use for Fingrid in our offi cial duty as the party grantingcertifi cates of origin. We wish to attend to this duty as fl e-xibly as possible, in co-operation with the customers.

It is snowing outdoors as I walk to the bus stop. Eventhough this is not yet permanent snow, it is no longer asdark as before, and I and my friend could go jogging inthe beautiful winter weather. I continue with a smile on myface. It has been a good start for the week.

FINGRID 3/2006 61

In this column, Fingrid’s employees write about their one dayat work. This time, the column has been writtenby SUSANNA VALKONEN, who works as a Specialist inthe Balance Service Unit.

All in a day´s WWOORKRK

IN THE NET

FINGRID 3/2006 62

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Time is now.

63

how much of an average working dayis spent on agreeing on schedules andtiming of meetings.

At forty years, you try to take a holdof time and have a rumbustious “overthe hill” party. At fi fty, you celebrate ina more restrained manner. At forty, youmay play with the idea of still head-ing towards the midpoint in your life,the zenith of the hill. At fi fty, you knowthat you just passed the halfway andit’s all downhill from there.

When the horizon no longer moves,just you towards it, time gains a newmeaning.

Or rather, life gains a new meaning.The large post-war generations are

now approaching an age by whichthey must accomplish their missionin life. Secondary busyness no longerappeals to them. And you can see it.For some, the rat race accelerates to ablinding speed while others deliberate-ly fall off the race to a whole new ex-istence. Some wish to show once moretheir competence while others wish tolive as long as there’s time.

Hastelessness and quietness are be-coming a brand which is as sought-af-ter as pure water and long human re-lationships. In our bit-by-bit life, thereare glitches even in the time machine.Creativity experts have once again in-vented the importance of boredom. It’sjust that people no longer have the timeor courage for just being, only for do-ing. Lack of things that keep you busymay reveal gorges in the structures oflife. Besides, boredom is free, and sure-ly, nothing cheap can be good, right?

You have to surrender yourself to becarried by time.

There is nothing as democratic astime. We all have the same 24 hours aday. But since is also money, it makes

people unequal. The haste of a million-aire is completely different from thatof a single parent mom working at thecheck-out counter of a local shop.

Many people buy themselves time bybuying services. They buy welfare. Atthe same time, they inadvertently buythemselves out of their everyday being,the very one that keeps them attachedto life when they once notice – oftenquite unexpectedly – that they are nolonger in a hurry.

Besides, not all wish to have moretime. Time drags slowly for the unem-ployed, sick and those who wait, espe-cially if time is all they can expect, notlife.

Shared time is at least twice as deep asnormal time while the time of a lonelyperson seems manifold in length. Dur-ing holidays – Christmas, New Year –people tend to gather together for areason. Shared rites help us to meet theperishability of time but also encour-age us to receive new time.

People have the right to expect andacquire more life in their years. But theydo not have the right to require anddemand more years in their lives. Bothquantity and quality are important intime. This is why milestones such as thechanging of the year are often pointsof profound self-study for many.

We need to let ourselves be taughtby time.

Luckily there is enough time.

Hilkka Olkinuora is the columnist of the Fingrid magazine. She presentsherself as follows: “Minister and journalist from Tampere, wrote earlierof economy, nowadays also again a student. Also works at workplaces,and discusses electric encounters in this magazine.”

Another year at an end.Where did it go?

Where does time go?At Christmas, every-one knows it. Parents of

small children know it throughout theyear. It goes in haste. Christmas rushand work pressures. Congested yearsand quality time.

However, more time becomes availa-ble all the time. The wise in the MiddleAges had an explanation for this. Theyconcluded that God creates more timecontinuously, so it does not run out.

If this is so, what is the length of timein which this world is being made? Forsome reason, the wise said that it is9/13 of a second. In other words, youcan never be ahead of your time; timeis always a fraction of a second aheadof you.

Time does not run out, but therenever seems to be enough of it. Theysay that time fl ies; that is probably whywe have to run just to stay in place.But we cannot catch up with time al-though even the less profi cient in lan-guages can say that their motto is:carpe diem!

You have to make yourself availablefor time to catch up with you.

God creates time, but people cameup with haste and the devil inventedthe calendar. Originally intended tointerpret the interrelations of path ofstars, crop and game yield and humandestinies, the calendar has become acorset of development and an aid ofslavery, no matter how well hidden in-side the communicator it may be.

When people get older, they have toadmit in many ways that life cannot becontrolled after all, but life controls us.You can try to harness the imminentchaos by controlling time. Just think

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Helsinki

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FINGRID OYJArkadiankatu 23 B, P.O.Box 530, FI-00101 Helsinki • Tel +358 30 395 5000 • Fax +358 30 395 5196 • www.fingrid.fi