Legislative amendment to boost clean energy investments and develop electricity grids approved
The amendment to the Electricity Market Act will promote the integration of the increasing electricity generation and growing consumption loads into the main grid and high-voltage distribution network. The Government submitted the Act to the President of the Republic for approval on 23 October 2025. The Act will enter into force on 1 January 2026.
“The electrification of society is proceeding fast and the investment plans of many industrial sectors increase the need to further improve our power system. With these amendments to the Electricity Market Act, we will strengthen Finland’s competitive advantage in clean growth. To attract investments, it is also important to preserve Finland as a uniform bidding zone with respect to pricing in electricity trade,” Minister of Climate and the Environment Sari Multala says.
The electrification of district heating and new industrial projects related to the clean transition, including data centres, clean hydrogen and green steal, are expected to significantly increase electricity generation and demand by 2040. At the same time, electricity consumption and generation are becoming increasingly separated into different parts of Finland. The growth in onshore and offshore wind power increases the production capacity especially in the Ostrobothnian regions, while energy consumption is growing the most in southern Finland.
The new act will promote the implementation of the most heavy-duty 400 kV electricity grids locally and regionally and the placement of electricity generation and consumption close to each other. Distribution network operators will be able to operate local and regional high-voltage distribution grids of 400 and 220 kV.
In future, the transmission system operator Fingrid will focus on the development of the national, interconnected electricity transmission system and cross-border interconnectors. To promote the utilisation of offshore wind power, the exclusive economic zone of Finland will be added to the responsibilities of the main grid operator.
A provision will be added to the Act that will also enable the distribution network operators to develop grids or parts of these that bring together separate generation entities. Subject to certain conditions, however, electricity generators could construct and operate jointly owned connection networks for electricity generation without an electricity network licence.
The provisions of the Electricity Market Act concerning the licences for electricity network operations was amended so that, regardless of the size of the power plant connected to the network, no licence will be required for the distribution of electricity directly to use via a direct line.
To ensure the reliability and cost-efficiency of the power system, the integration of oversized connections into the electricity system will be restricted.
The act now makes it possible to conclude flexible contracts concerning connections to the electricity grids. This will provide faster access to the grid for customers and enable more efficient use of the grid capacity while the network operator is strengthening the grid. As a permanent solution, flexible connection contracts will reduce the need to invest in the grids.
Land use required for grid construction will decrease as parallel 110 kV transmission lines can locally be replaced by one transmission line with a voltage of 400 kV. The amendment will encourage to place electricity consumption and generation close to each other and will curb the costs to electricity end-users arising from the need to strengthen the power system. Indirectly, it will also have positive impacts on the clean transition as it will facilitate the integration of renewable energy into the grid.
The Finnish Energy Authority was authorised to provide advance information concerning the licences required for electricity grid operations. The authority to make decisions on project licences for cross-border transmission lines and natural gas pipelines was transferred from the Ministry of Economic Affairs and Employment to the government plenary session.
Inquiries:
Arto Rajala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 064 828