FINGRID GROUP – MANAGEMENT’S REVIEW 1.1.−31.3.2025

Fingrid follows a six-month reporting period in compliance with the Securities Markets Act and publishes Management’s Reviews for the first three and nine months of the year; the Management’s Reviews contain key information illustrating the company’s financial and other development.

The information presented in the Management’s Review relates to Fingrid Group’s performance in January–March 2025 and the corresponding period of 2024, unless otherwise indicated. The figures presented here have been drawn up in accordance with the International Financial Reporting Standards (IFRS). The Management’s Review is not an interim report in accordance with the IAS 34 standard. The figures are unaudited.

• The transmission reliability rate of Fingrid’s transmission system was high, at 100 (99.99991) per cent, and the availability of electricity was good. Due to a mild winter, electricity consumption in Finland decreased from January to March, amounting to 23.8 (24.6) terawatt hours. The emissions from the electricity consumed in Finland decreased.
• The company estimates that the gross capital expenditure in 2025–2028 will amount to roughly EUR 1.7 billion, EUR 623 million of which is committed. 432 (528) MW in renewable production capacity was connected to the main grid.
• Turnover for January–March was significantly lower than in the previous year. The balance service’s share of the company’s turnover decreased to 47 (59) per cent due to lower imbalance power prices. The costs of maintaining the electricity system are subject to volatility.
• Fingrid’s share of the accrued congestion income was EUR 71.4 (75.0) million. Fingrid’s income on the financial transmission rights (FTR) issued on the Finland–Estonian border amounted to EUR 13.5 (15.2) million, and the congestion income credited to their holders was EUR 26.9 (11.4) million. Fingrid used congestion income for investments and to cover operational costs.
• Operating profit, excluding the change in the fair value of derivatives linked to operational activities, was EUR 119.5 (119.8) million. The allowed regulatory profit remained at the previous year’s level. Profit before taxes was EUR 103.1 (81.0) million. The company’s financial position remained strong.

Review by the President & CEO: Mild winter contributed to good adequacy of electricity, market advanced towards 15-minute time unit

“In compliance with Fingrid’s forecasts, the winter of 2024–2025 was relatively problem-free, thanks to the reliably functioning power system and unusually mild weather. The fault detected in the EstLink 2 transmission cable on Christmas Day would have jeopardized the adequacy of electricity supply in exceptional circumstances. ‘The unusually warm weather decreased the consumption of electricity, with the consumption peak on 4 February as low as 13,314 megawatts.

The mild winter also helped keep the maintenance costs of the electricity system in check. The distribution of electricity consumption over the hours of the day demonstrated the increased impact of the day-ahead market: consumption tended to shift from high-priced hours to less expensive times of the day.

The preparations for repairs on the damaged EstLink 2 transmission connection have progressed. According to the current repair schedule, the connection is due to resume its operation in mid-July. In early March, it was announced by Fingrid and the Estonian TSO Elering, the 50/50 owners of the EstLink 2 transmission connection, that the companies have decided to waive enforcement of the seizure of the Eagle S, the vessel suspected of damaging the cable, due to the financial risk involved. The TSOs will instead seek damages by legal action.

During the first weeks of the year, public concerns were voiced as to whether Fingrid is capable of connecting new industrial-scale consumers to the main grid in southern Finland. The consumption of electricity has increased faster than expected in the region, while at the same time local adjustable generation capacity has been phased out and electricity imports from Russia have discontinued. The already concluded main grid connection agreements will be implemented on schedule. The availability of the main grid connection capacity in southern Finland will be less strained in 2027–2028, once the investments to reinforce the main grid are completed. The capability to connect new consumption in southern Finland is facilitated by the ability of new consumption to adjust its use of electricity and close cooperation between Fingrid, the local DSO and the customer.

The first quarter of 2025 saw major steps towards a 15-minute electricity market. The 15-minute Market Time Unit was introduced on the intraday electricity market between Finland and Estonia in January and between the Nordic countries in March. The go-live of the Nordic 15-minute balancing power markets took place successfully in early March. These markets are a precondition for a pan-European transition to 15-minute day-ahead markets in June 2025.”

Main business events

• The consumption of electricity in Finland in January–March amounted to 23.8 (24.6) terawatt hours. During this period, the electricity Fingrid transmitted to its customers amounted to 18.8 (18.7) terawatt hours, which represents 79.0 (76.2) per cent of Finland’s total consumption. Fingrid transmitted in its grid a total of 81.3 (79.3) per cent of the total electricity transmission in Finland.
• The electricity supply was not in jeopardy as the electricity system and domestic generation capacity operated reliably. The unusually warm weather of the winter 2024–2025 also contributed to the lower electricity consumption, compared with the previous winter. The consumption peak on 4 February remained as low as 13,314 megawatts.
• 432 (528) MW in renewable production capacity was connected to the main grid, consisting of 285 (491) MW of wind power and 147 (37) MW of solar power. A new wind power production record was set on 18 March 2025, with Finnish wind power parks generating a total of 7,296 MW.
• The second transmission connection between Finland and Estonia, EstLink 2, experienced a failure in December 2024. The repairs of the broken cable are progressing and, according to current information, the EstLink 2 connection will return to commercial operation in mid-July.
• The new Nordic mFRR energy action market, a key component of the power system reserve markets, was rolled out successfully in March. The start of operations was a major joint undertaking between the Finnish, Swedish, Norwegian and Danish TSOs and electricity market parties. The mFRR market has experienced significant price volatility and several high peaks in balancing power prices.
• The transition to 15-minute granularity on the electricity market progressed as planned during the period under review, increasing confidence that the adoption of 15-minute trading on the day-ahead market in summer 2025 will also be successful. The intra-day market went over to 15-minute trading between Finland and Estonia in January and between the Nordics in March.
• Fingrid achieved an excellent result in the International Transmission Operations and Maintenance Study (ITOMS), which assesses the efficiency and quality of electricity transmission system operators. The system security of Fingrid’s main grid was once again rated as high, achieving the best score of the benchmarked companies. The cost-effectiveness of Fingrid’s maintenance operations also improved in comparison to other companies.

Legal proceedings and proceedings by authorities 

On 2 January 2024, Fingrid appealed to the Market Court against the Energy Authority’s decision on the terms and conditions of balance service. The appeal mainly concerns the collateral model for balance responsible parties presented in the decision. In November 2023, the Energy Authority issued a decision on the terms and conditions for balance responsible parties, which include the principles for how collateral requirements are determined. The Energy Authority’s decision includes major changes to the current collateral terms and conditions and sets apart Finland’s collateral model from that used in other Nordic countries. The most significant changes to the current collateral model include a major reduction in the required collaterals, elimination of the requirement to provide an adequate additional collateral and a possible collateral ceiling. The reduction of collaterals required from a balance responsible party will increase joint liability for counterparty risks among the all balance responsible parties.

On 29 January 2024, Fingrid appealed to the Market Court against the Energy Authority’s decision on the methods concerning the specification of the profit for the electricity transmission grid operations for the sixth regulatory period 1 January 2024–31 December 2027 and seventh regulatory period 1 January 2028–31 December 2031. According to Fingrid’s assessment, the decision on the regulatory methods is a significant weakening of the electricity transmission grid operations’ reasonable profit regulatory method that expired at year-end. In Fingrid’s view, the assessment of impacts in preparing the regulatory model decision has been deficient and there are still issues open to interpretation related to the presented decision. The decision weakens Fingrid’s ability to invest. Fingrid’s goal is a solution that would also enable the future development of the grid, allowing the hundreds of billions in green transition investments in Finland to be implemented as planned.

On 15 February 2024, Fingrid appealed to the Market Court against the decision given by the Energy Authority on 11 January 2024 on the scope of the national transmission system operator’s systems responsibility regarding the grid connection of the OL3 nuclear power plant. Teollisuuden Voima Oyj (“TVO”) lodged a request for an investigation with the Energy Authority on 25 May 2022 related to the claims by TVO that Fingrid has neglected its obligation to develop the main grid as stated in the Finnish Electricity Market Act and/or other applicable legislation, and that, as a result, it has placed unlawful restrictions on connecting the Olkiluoto 3 nuclear power plant to the grid, and that Fingrid is in breach of its administrative obligations linked to carrying out its public administrative task. The Energy Authority states in its decision of 11 January 2024 that Fingrid fulfilled its development, connection and transmission obligations in accordance with the Electricity Market Act. The Energy Authority also found the 1,300 MW power limit specified in Fingrid’s connection terms justified and did not find Fingrid to have restricted Olkiluoto 3’s access to the grid. In its decision, the Energy Authority sees, however, that Olkiluoto 3’s protection scheme falls under Fingrid’s responsibility based on a transmission system operator’s protection scheme as intended by legislation and that Fingrid is in breach of Article 9 of the Commission Regulation (EU) 2017/1485 establishing a guideline on electricity transmission system operation and its obligation in line with Section 10, Subsection 1 of the Act on the Control of the Electricity and Natural Gas Market (2013/590) to bring the determination principles for fees it applies before the Energy Authority for approval prior to their implementation. 

In accordance with the Energy Authority’s decision, Fingrid submitted its proposal concerning the determination principles for fees related to the OL3 protection scheme on 30 April 2024. The Energy Authority issued its decision on the determination principles for fees on 30 December 2024. According to the decision, TVO shall bear the costs for reimbursements to response resources connected to system protection and for the construction, maintenance and use of data communication connections. The decision states that Fingrid shall bear the costs for acquiring the response resources and awarding contracts, managing the protection scheme and the tests to be carried out on the response resources for system protection, as well as for the maintenance of the measurement and monitoring system for system protection in Fingrid’s operation control system. Fingrid and TVO have agreed on provisional fee arrangements for Olkiluoto 3’s protection scheme as of 1 January 2025. The agreement is based on the decision issued by the Energy Authority on the costs for the protection scheme on 30 December 2024. The provisional fee arrangements for the protection scheme do not directly affect the legal proceedings concerning the protection scheme’s extent, which are still ongoing in the Market Court.

Fingrid received an expropriation permit for the widening of the Torna–Lautakari right-of-way for the neutral line on 27 October 2022. In the kick-off meeting for the expropriation procedure on 1 December 2022, the expropriation committee decided that the expropriating party is obligated to assume responsibility for the tree stands within the scope of the rights and restrictions set in the expropriation permit, unless otherwise agreed. The final meeting of the expropriation procedure was held on 16 November 2023. Fingrid appealed against the decision concerning the Torna–Lautakari tree stands’ expropriation to the Southwest Finland District Court’s Land Rights Court on 22 December 2023.

Events after the review period

On 2 April 2025, Fingrid Oyj’s Annual General Meeting approved the financial statements for 2024 and decided on the distribution of dividends in compliance with the proposal for dividend distribution presented in the financial statements. The first instalment of the dividend, totalling EUR 90,187,800.00, was paid on 7 April 2025. Eeva-Liisa Virkkunen was elected as a new member of the Board of Directors and also as the new Chair of the Board, and Leena Mörttinen was re-elected as the Deputy Chair of the Board. Jero Ahola, Anne Jalkala and Mikko Mursula were re-elected as Board members.

The company has not changed its earnings guidance from what is stated in the Financial Statements Bulletin of 4 March 2025.

Further information:

Asta Sihvonen-Punkka, President & CEO
+358 30 395 5235 or +358 50 573 9053

Jukka Metsälä, Chief Financial Officer
+358 30 395 5213 or +358 40 563 3756

Fingrid is Finland’s transmission system operator. We secure reliable electricity for our customers and society, and shape the clean, market-oriented power system of the future.

Fingrid delivers. Responsibly.
www.fingrid.fi

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