Electricity prices - Finland

Finland Electricity Market: Sources, Pricing, and Dynamic Tariffs

Primary Electricity Sources

Finland’s electricity generation is now dominated by low-carbon sources, with nuclear power providing the single largest share. In 2024, roughly 95% of Finland’s electricity production came from fossil-free sources (nuclear, wind, hydro, solar, and bioenergy). Total consumption was about 82.7 TWh in 2024 (up 3% from 2023). The new Olkiluoto-3 reactor (1.6 GW, online in 2023) helped boost nuclear output and reduce reliance on imports. Key generation sources include:

• Nuclear Power: About 38–39% of electricity production, making it the largest source. Finland operates five reactors, and nuclear provides a stable base supply year-round. The addition of Olkiluoto-3 in 2023 significantly increased nuclear generation. Nuclear output was slightly lower in 2024 than 2023 (due to maintenance), but still ~30+ TWh, covering the biggest share of demand.

• Wind Power: Around 23–24% of generation. Wind capacity has expanded rapidly; wind output grew 37% in 2024 to 19.9 TWh. For the first time, wind overtook hydro as Finland’s second-largest source. On windy days, wind power can substantially cut prices and even lead to surplus generation.

• Hydropower: Approximately 16–17% of generation. Finland’s hydro dams (primarily in the north) provide flexibility and peaking power. In 2024, hydro production was slightly down (~6% lower than 2023), at roughly 13–14 TWh. Hydro became the third-largest source as wind eclipsed it, but it remains vital for balancing the system.

• Bioenergy (Wood, Biomass & Waste): Roughly 10–12% of generation. Finland extensively uses biofuels (e.g. wood residues, black liquor, agricultural biomass) in combined heat-and-power plants. This “renewable fuel” category is counted in the fossil-free share. Some peat and waste are also used in power plants. Electricity from fuel incineration (biomass/waste/peat) declined ~13% in 2024 as cleaner sources grew.

• Solar Power: Still small but growing – about 1–2% of generation. In 2024, solar output reached ~1.2 TWh (up 61% year-on-year). While Finland’s high-latitude limits winter solar production, summertime solar generation is rising as panel installations increase.

• Fossil Fuels: < 5% of generation in 2024. Finland is rapidly phasing out fossil electricity. Coal-fired generation dropped by 50% in 2024 to only ~1% of consumption. In spring 2025, the last coal plants (operated by Helen and Vantaan Energia) were closed – four years ahead of Finland’s 2029 legal coal ban. A small amount of gas and peat-fired capacity remains for peak loads and backup, but overall fossil use is minimal and planned to be eliminated. Finland’s grid operator maintains some reserve fuel-based capacity for emergencies.

• Imports/Exports: Finland historically imported power, but new domestic capacity is shifting the balance. In 2024, net imports supplied only about 4% of electricity demand – a sharp drop from previous years. Domestic production met ~96% of needs. Sweden is now the main source of imported electricity for Finland, especially during high-demand or low-wind periods. Imports from Russia have ceased since 2022 (due to geopolitical factors), increasing Finland’s self-reliance. At times of surplus (e.g. windy low-demand hours), Finland can export power to neighbors via Nordic interconnections. Overall, 2024 marked Finland’s progress toward electricity self-sufficiency, with the combination of nuclear and wind reducing dependence on imports.

Electricity Price Formation for End-Customers

Electricity retail prices in Finland are unbundled into several components. End-users pay for the energy itself and the delivery of that energy, plus government taxes. In practice, an electricity bill has three main parts: energy, network (transmission/distribution), and taxes, all of which are subject to VAT. Below is a breakdown of these components and how they affect Finnish consumers’ bills:

• Energy Commodity Price: This is the price for the electricity itself, set by the competitive market. Finland’s retail market is liberalized – consumers choose their electricity supplier and contract type (e.g. fixed price, variable, or spot-indexed). The energy price customers pay is typically based on wholesale market prices (Nord Pool) plus the supplier’s margin. For fixed-term contracts, the rate reflects market futures prices at the time of signing; for spot-based contracts, the rate fluctuates hourly with the Nord Pool price. Suppliers are free to set retail energy prices (no regulated tariff), so consumers can shop around. In practice, the energy component can be roughly 1/3 to 1/2 of the total bill, depending on market conditions. In early 2024, for instance, wholesale prices averaged around €46/MWh (4.6 c/kWh), a sharp drop from 2022 highs, which lowered the energy portion of bills. Suppliers may also charge a small fixed monthly fee as part of the energy contract.

• Network Transmission & Distribution Fees: This is the charge for using the grid – getting the power from generators to homes/businesses. It covers the local distribution system operator (DSO) costs and transmission. In Finland, you cannot choose your DSO; it’s a regional monopoly (e.g. Caruna, Elenia, etc.) that owns the local lines. The network fee usually has a fixed part (basic monthly fee) and a variable part (per kWh consumed). Some large users also pay capacity-based fees. These tariffs fund building, operating, and maintaining the electrical network. Network charges are regulated by the Energy Authority to ensure they are reasonable. For example, DSOs have had limits such as an 8% cap on annual rate increases. Distribution fees have risen in recent years due to grid investments (weather-proofing lines, etc.), but regulatory changes in 2024 aim to moderate long-term increases. For a typical household, distribution might account for roughly 20–30% of the total bill (varying by location and consumption). Notably, the transmission grid (operated by Fingrid) charges are embedded in what DSOs pay, so consumers don’t see a separate “Fingrid fee” – it’s all within the network tariff. Even if a customer pays zero for energy (e.g. solar net metering), they still pay the fixed network fee and taxes.

• Electricity Tax (Excise Duty): Finland levies an electricity consumption tax on end-users, collected via the DSO. This “sähkövero” is charged per kWh used and is added on the distribution bill. The tax is set by government to raise revenue and incentivize energy savings. There are two tax classes in Finland:

  • Tax Bracket I: The standard rate for households, services, and most businesses. As of 2024, bracket I is €0.02253 per kWh (2.253 ¢/kWh) before VAT – roughly 2.83 ¢/kWh including VAT. This includes a small “security of supply” fee. Virtually all residential customers fall under Class I.
  • Tax Bracket II: A much lower rate for eligible industries and greenhouses. This is only €0.00079 per kWh (0.079 ¢/kWh incl. VAT) – essentially a 97% reduction. Energy-intensive manufacturing, mining, and data centers can apply for this lower bracket. The policy supports industrial competitiveness. Private households are always bracket I.

  The electricity excise tax is a significant portion of a home user’s bill – for a household using 5,000 kWh/year, bracket I tax adds about €125 (plus VAT) per year. Tax revenues go to the state. (There is no separate “renewable fee” or similar – just this excise tax.) Finland’s government has occasionally adjusted this tax: for instance, from 2021 they lowered the industrial (Class II) rate to the EU minimum, and there have been discussions of raising the tax on data centers to the higher rate. The tax is listed on bills as a separate line item. Its purpose is partly fiscal and partly to encourage energy efficiency.

• Value-Added Tax (VAT): Finally, VAT is applied on top of all the above components – yes, Finland charges a tax on the electricity tax. The VAT standard rate in Finland was 24%, and was increased to 25.5% in September 2024 as a budget measure. Electricity for consumers is generally taxed at the standard VAT rate. (Businesses can deduct VAT, but households cannot.) So a residential customer effectively pays an extra 25% on the energy, network fee, and excise tax combined. VAT can thus constitute around one-fifth of the gross price. For example, if before taxes a household’s electricity cost is 10 c/kWh, after adding excise (~2.25 c) and then VAT, the effective price becomes ~15–16 c/kWh. According to industry figures, taxes (excise + VAT) make up about one-third of the total electricity price for a household bill. This share can fluctuate with wholesale prices – when market energy prices were very high in late 2022, taxes were a smaller percentage of the total, whereas when energy prices are low, the fixed tax per kWh looms larger. The VAT increase to 25.5% in 2025 will slightly raise end-user prices.

Customer Segment Differences: The composition of the bill is broadly similar for most customer groups (everyone pays energy+network+tax). However, larger customers often have different arrangements:

• Industrial and Large Business: Eligible industries use the lower electricity tax (Class II) as noted, substantially reducing their tax burden. Very large factories may be high-voltage connected, meaning they pay Fingrid transmission charges and a local substation fee instead of regular DSO tariffs. They often negotiate electricity supply through tender or use an in-house trading desk, often buying directly at wholesale prices. These users still pay the same base taxes (excise/VAT) unless exempt for some reason. Many industrial firms hedge prices via power purchase agreements or the futures market rather than standard retail contracts.
• Households and SMEs: Small customers typically pay the standard tax rate and have similar contract options. Households with electric heating (high usage) might see energy cost dominate their bill, whereas an apartment dweller’s bill might be majority fixed fees and taxes. In 2024, the average total price (energy+network+tax) for Finnish households was slightly below the EU average. Finland’s extensive use of spot-priced contracts (see next section) means many consumers experienced price volatility, but over the year Finnish retail prices (∼15–20 c/kWh for households) remained moderate by European standards. There are no regulated retail tariffs for households – all pricing is market-based, with the exception of temporary government aid (e.g. windfall taxes on producers or direct compensation during the energy crisis, not price caps). The Energy Authority monitors retail markets for fairness, and provides a price comparison website for consumers (sahkonhinta.fi). Overall, Finnish end-customers’ electricity bills are shaped by a competitive energy component, a regulated network fee, and uniform taxes – a structure designed to be transparent and to encourage efficient energy use.

Dynamic Electricity Tariffs (“Spot Price” Contracts)

Dynamic electricity tariffs – known in Finland as spot-price contracts (“pörssisähkö”) or hourly tariffs – are contracts where the price per kWh varies hour by hour based on real-time market rates. Unlike a fixed-rate plan, a dynamic tariff passes through the fluctuations of the Nord Pool power exchange to the consumer. Key features of dynamic pricing in Finland include:

• Real-Time Hourly Pricing: With a dynamic tariff, the electricity rate is constantly changing, typically set each hour according to the wholesale price. Customers do not pay a single flat cents/kWh rate year-round; instead, they pay a different price for each hour of consumption. For example, a kilowatt-hour used at 3 AM might cost only a few cents, while one used during a peak at 5 PM could cost ten times more. In essence, the price you pay follows the ups and downs of the market. This is usually based on the day-ahead market – prices are determined for every hour of the next day. As a result, households can see tomorrow’s hourly prices in advance and plan accordingly. Dynamic tariffs encourage consumers to shift usage to cheaper periods (e.g. run appliances at night when wind power is ample). In Finland and other Nordics, these tariffs are already common and have been shown to save active consumers money while helping balance the grid.

• Link to Nord Pool Exchange: Finnish dynamic contracts are directly tied to the Nord Pool electricity exchange (Finland bidding area). The hourly rate a consumer pays is usually the Nord Pool Day-Ahead Spot Price for Finland for that hour, plus a small supplier markup. Nord Pool publishes 24 hourly prices for the next day (for Finland’s time zone) each afternoon around 1–2 PM GMT (around 3 PM local). For instance, Helen’s “Exchange Electricity” contract explicitly bases its price on the hourly market price and updates daily at 3 PM for the next day. Similarly, Vattenfall’s hourly agreement stipulates that each hour’s price is the Nord Pool Finland spot price (the “Market Price”) plus a fixed markup (cents/kWh) and a monthly basic fee. In other words, the retailer passes through the wholesale price to the customer and earns their margin via a per-kWh fee (and/or monthly fee). This structure ensures the price is always “competitively tendered and up-to-date” by the market. If the Nord Pool price goes negative (which can happen during oversupply), some contracts even allow the retail price to go negative (paying the user). Typically, however, the markup and taxes mean the consumer’s effective price floor is zero. Overall, the Nord Pool link gives consumers price transparency and aligns retail prices with generation costs in real time.

• Smart Meters and Technology Requirements: Dynamic pricing is made possible by Finland’s 100% deployment of smart meters. By 2014, nearly all Finnish households had smart electricity meters installed, one of the earliest and highest coverages in Europe. These modern meters record consumption in hourly (or even 15-min) intervals and automatically report data to the utility. Remote readable smart meters are essential for hourly billing – without them, it would be impossible to track exactly how much power you used each hour and charge the correct hourly price. Finland’s 2009 legislation mandated at least 80% smart meter coverage by 2014, a goal exceeded to virtually 100%. Thanks to this, every consumer can opt for an hourly-priced contract and be billed accurately for the timing of their usage. The data flows through a national Data Hub so that any retailer can obtain a customer’s interval consumption from the DSO for billing. In addition to the meters, consumers often use smartphone apps or online portals to monitor prices and usage. Many suppliers provide apps that show real-time prices, next-day price forecasts, and even control smart home devices. Some tech-savvy users integrate smart thermostats, EV chargers, or water heaters that automatically adjust to price signals (for example, charging an electric car when the hourly price falls below a set threshold). In Finland, this automation is growing: for instance, some households let their heating systems respond to hourly prices. The high penetration of electric sauna heaters and EVs in Finland also offers flexibility – people can choose when to heat the sauna or charge the car based on price. All of this is enabled by the smart metering infrastructure. As of late 2023, roughly 30% of Finnish consumers were on spot-price contracts – a huge increase from about 14% a year before, indicating how quickly people have embraced hourly tariffs once technology and volatile markets made them attractive. This also means millions of hourly data points are handled, which the digital systems accommodate.

• Consumer Interaction and Experience: From the user’s perspective, a dynamic tariff requires a bit more engagement than a fixed one. Consumers are informed of prices in advance and can react to price signals. In practice, the hourly prices for the next day are published each afternoon (around 3 PM). Many Finns check an app or website (such as the Nord Pool app, their supplier’s app, or third-party services) to see when the cheapest and most expensive hours will be. For example, prices are often lowest late at night and highest on weekday early evenings. A price-conscious consumer might run their dishwasher or charge their battery storage at 2 AM when prices are low, and avoid using electric heating or other heavy loads during the 5–6 PM peak. Some retailers offer automated tools: Helen’s “Oma Helen” service lets customers monitor hourly usage and costs, and even provides alerts. Other companies (like Tibber, a digital-native energy company active in Finland) provide integrations that can automatically adjust smart home devices to consume more in low-price hours. Overall, consumers are becoming more accustomed to these fluctuations – a January 2024 survey indicated Finnish households have grown more flexible, with many willing to cut usage at peak price hours. However, dynamic pricing also means exposure to price spikes. During an extreme cold spell in January 2024, spot prices briefly hit €2.35/kWh for one hour, causing some bill shock. Many consumers reacted by temporarily reducing consumption or even switching back to fixed-price contracts after such events. Power companies noted thousands of customers moved away from spot contracts after the New Year 2024 price spike. Nonetheless, dynamic tariffs remain popular: despite some churn, the overall number of spot-price customers in Finland is high by international standards, and companies report that on the whole, interest in hourly pricing is steady or growing. In summary, Finnish consumers interact with dynamic tariffs by actively managing their usage or leveraging smart tech to respond to hourly price signals – enjoying low rates when the wind is strong or demand is low, and conserving energy when prices surge.

• Legal and Regulatory Framework: Finland’s embrace of dynamic pricing has been facilitated by supportive policies. At the EU level, the Electricity Market Directive (2019/944) and related regulations establish the right for consumers with smart meters to have dynamic price contracts and require suppliers to offer them. In fact, starting in 2025, European legislation mandates that all major electricity retailers must provide a dynamic pricing option alongside fixed-rate plans. Finland was ahead of this curve: dynamic (hourly) tariffs have been available for over a decade due to early smart meter rollout and Nord Pool’s transparent pricing. The Finnish Electricity Market Act already ensures consumers can choose their supplier freely and have access to their metering data; it was updated to transpose the EU directive, formally guaranteeing the availability of hourly-priced contracts for anyone who wants one and has the appropriate meter. Finland’s regulators have also worked to increase consumer awareness and trust in such contracts – for example, the state energy authority’s price comparison website lets users filter for spot-priced contracts, and new contract forms like “hybrid” plans (part fixed, part spot) are emerging and tracked by authorities. There is also an emphasis on consumer protection: retailers must clearly explain that prices can vary and there is no upper limit, so customers are not misled. Additionally, billing must be transparent – by law, bills in Finland must show an itemized breakdown including energy, distribution, taxes, etc., and if on a dynamic tariff, consumers are entitled to access their detailed hourly data. At the grid level, Fingrid (the TSO) moved to 15-minute balancing periods in 2023, and it’s expected that retail pricing may eventually follow with 15-minute dynamic rates to match (as hinted by industry experts). In short, the regulatory environment in Finland and the EU not only allows but actively promotes dynamic tariffs as a tool for demand response and market efficiency. The Nordic market structure – with Nord Pool’s day-ahead and intraday markets – provides the foundation, and Finland’s laws ensure suppliers and infrastructure keep up. By 2025, it’s effectively standard that any consumer can opt for a contract indexed to hourly market prices. This positions Finland as one of the leaders in dynamic pricing adoption, supporting the energy transition by making demand more flexible and engaged.

Major Electricity Providers Offering Dynamic Tariffs

Many electricity suppliers in Finland offer dynamic pricing (spot-indexed) contracts, especially given the competitive market and smart meter coverage. Below are some notable providers and the nature of their offerings:

• Fortum Oyj – Fortum (a major Finnish energy company, partly state-owned) is one of the largest electricity retailers in the Nordics. Fortum serves households, SMEs, and large enterprises across Finland. It offers a popular hourly-priced contract called “Fortum Tarkka”, where customers pay the Nord Pool hourly spot price + a small margin. Fortum Tarkka is marketed to tech-savvy consumers ready to optimize usage; the company notes it is “great if you’re ready to track prices” and shift consumption to cheaper hours. In addition, Fortum provides hybrid contracts (mix of fixed and spot) and other innovative products. As the incumbent in many areas, Fortum’s adoption of dynamic pricing has brought many Finnish consumers into the spot market.

• Helen Oy – Helen is the energy company of the City of Helsinki and a major retail supplier nationwide. Helen serves residential and business customers (from apartments to large buildings). Its default offering under its universal service obligation is a dynamic pricing product. Helen’s “Pörssisähkö” contract charges hourly rates based on the Nord Pool market price. Customers pay the spot price for each hour plus a fixed monthly fee and a margin per kWh. Helen actively promotes shifting consumption to off-peak hours, noting that prices are “usually lowest in the evenings, nights and weekends” and that next-day hourly prices are published by 3 PM daily. Helen mainly targets households and small businesses with these spot contracts. In early 2024, Helen had over 100,000 customers on spot pricing; however, after a price spike, Helen reported about 5,000 of its spot customers switched to fixed-rate deals in one month – highlighting that while many use dynamic pricing, some revert during volatile periods.

• Vattenfall Oy – Vattenfall is the Finnish branch of the Swedish state-owned utility. It is a significant retailer in Finland, serving households, SMEs, and larger industrial clients. Vattenfall offers a contract often termed “Tuntisähkö” which is a pure spot-price agreement. According to Vattenfall’s terms, the price for each hour is determined by the Nord Pool Finland hourly spot price plus a Vattenfall markup (¢/kWh) and a monthly basic fee. Customers must have hourly metering to enroll. Vattenfall provides tools like a mobile app for customers to monitor hourly prices and their consumption. Being an international player, Vattenfall also serves many business customers with tailored contracts (including spot-indexed deals and renewable PPAs). During the extreme high prices of Jan 2024, Vattenfall’s Finnish director noted some customers were “scared” by the record spot prices and switched away from hourly contracts, though many have since returned as prices normalized.

• Oomi Oy – Oomi is a newer consortium-based retailer (established in 2020 by several Finnish municipal utilities, including those of Oulu, Vantaa, Turku and others). Oomi focuses on residential and small business customers nationwide. It offers competitive spot price contracts – Oomi’s plans let customers pay the hourly market price with a fixed markup, similar to others. The company actively encourages customers to follow price developments on Nord Pool; Oomi’s website even lets visitors monitor the current and next day’s spot prices. As a large retail player (Oomi rapidly grew to hundreds of thousands of customers via its founding utilities’ base), Oomi has a significant share on dynamic tariffs. In the winter 2024 peak, Oomi’s CEO mentioned that “a few thousand” of their spot contract customers switched to other contract types when prices spiked, indicating Oomi had a substantial number on spot deals. Still, Oomi continues to market hourly pricing as a smart long-term choice.

• Väre Oy – Väre is an electricity retailer rooted in Eastern Finland, formed by a coalition of energy companies (like Savon Voima and others). Väre serves households and SMEs, especially in Eastern and Central Finland, but also sells nationwide. It provides spot price electricity contracts under various names. Väre has noted that Finnish consumers are becoming more accustomed to price fluctuations; during recent price surges, fewer of Väre’s customers reacted with panic compared to earlier crises. This suggests Väre’s customer base, many on dynamic pricing, are learning to manage volatility. Väre also offers an app and services for tracking hourly usage.

• Lumme Energia – Lumme is a medium-sized electricity retailer operating in parts of Southern and Eastern Finland (owned by local utilities like Suur-Savo Energia). It serves mainly households and small businesses in its regions. Lumme Energia actively promotes renewable and dynamic products, including spot-price contracts. In late 2023, even when some consumers were leaving spot deals due to high prices, Lumme saw more new customers starting spot contracts than leaving, indicating net growth in its dynamic tariff uptake. This showcases Lumme’s clientele trust in the long-term benefits of spot pricing. Lumme likely offers a standard hourly product similar to others (spot + margin).

Aside from the above, almost every local energy company in Finland now offers a spot-indexed tariff to their customers. For example, Tampereen Sähkölaitos, Turku Energia, Vaasan Sähkö, Lappeenrannan Energia, and many others all have hourly pricing options for residential customers. New digital entrants like Tibber (a Nordic startup) have also entered Finland, providing app-based dynamic pricing contracts to tech-savvy homeowners. In 2025, dynamic tariffs are not a niche product but a mainstream option – about one in three Finnish households is on such a contract, and all major suppliers (as well as dozens of smaller ones) compete to offer attractive terms for these customers. This competition includes varying the monthly fees or per-kWh margins, bundling services (like smart home devices or green energy add-ons), and providing user-friendly apps. The result is that Finnish consumers have a rich selection of dynamic pricing providers, empowering them to choose one that best fits their needs while taking advantage of the country’s clean and increasingly affordable electricity supply.

Peak and Off-Peak Hours

Finland 2024 – Average Hourly Wholesale Electricity Price (Nord Pool)

What the daily profile tells us

A classic “double‑hump” load curve

The shape you see (often called a camel curve) is typical for electricity systems in temperate climates:

1. Morning ramp‑up (≈ 07:00 – 11:00)

   • Offices, factories and schools start, electric heating is still running, and there is little solar generation in winter months.
   • Demand pushes the 10:00 spot price to €0.0815 / kWh, roughly 2.5 × the cheapest hour.

2. Mid‑day softening (≈ 11:00 – 15:00)

   • Commercial activity stabilises and, in the sunnier half of the year, rooftop and utility‑scale PV add supply.
   • Prices dip to the mid‑€0.06 range but stay above the overnight trough.

3. Evening peak (≈ 18:00 – 21:00)

   • People arrive home, cook, do laundry, charge EVs and turn on lights, while solar output falls to zero.
   • The second peak at 20:00 hits €0.0729 / kWh — lower than the morning record but still ~30 % above the daily mean.

4. Late‑night lull (≈ 22:00 – 06:00)

   • Industrial demand is lower, residential demand winds down, and wind production is often higher.
   • The cheapest hours (1‑6 h and after 23 h) sit around €0.033 – 0.046 / kWh.

Why the morning peak is slightly higher than the evening one

• Heating load: In Finland’s long heating season, electric resistance heaters and heat pumps kick in hardest just before midday when outside temperatures may still be low but solar is insufficient.
• Industrial cadence: Many heavy‑industry processes start early and stabilise by the afternoon, flattening the evening demand spike.
• Imports/exports & congestion: Nordic hydro scheduling often covers the evening ramp better than the sharp morning surge, keeping the 19‑20 h price a little lower.

Practical take‑aways for consumers

• Shift flexible loads (dish‑washers, EV charging, electric water heaters) to after 22 h or before 7 h to cut costs by up to 60 %.
• If night‑time isn’t an option, mid‑afternoon (14‑17 h) is usually cheaper than the two peaks.
• Time‑of‑use retail contracts or smart‑home automation can monetise these wholesale spreads.

(Remember: retail tariffs include grid fees, taxes and supplier margins, so the absolute cents/kWh differ, but the intraday pattern is very similar.)