Legal Alerts/23 Jan 2026

The Year in Review 2025: Changes to the Electricity Market Regulation

The year 2025 brought significant changes in electricity market regulation, with the Electricity Market Act (“the Act”) being amended twice. Firstly, the long-awaited change to the definition of connection lines was adopted in April, followed by amendments relating to high-voltage lines in October. In addition, the Finnish Energy Authority issued its decisions on Network Connection Pricing Methods (“Principles”, in Finnish: Liittymien hinnoittelumenetelmät) in mid-December. In this article, we address the key changes arising from these legislative amendments and new connection principles.

In addition to the legislative amendments,

the Market Court gave its decision in November on the Energy Authority’s decision concerning the regulatory methods for 2024–2031, which define the calculation of reasonable return for the network operators. The Market Court upheld the decision of the Energy Authority. Most of the network operators have appealed against the decision to the Supreme Administrative Court (the decision of the Supreme Administrative Court is expected during 2026).
Fingrid introduced conditional grid connection agreements for large industrial projects (250 MW or more). This model allows the connector to secure binding capacity at an earlier stage of the project, provided that subsequent project development meets the milestones set out by Fingrid. According to Fingrid, the model will be further developed based on the experience gained. Fingrid is also planning to introduce conditional grid connection agreements for large-scale production projects.

In 2026, we expect flexibility to take centre stage in the electricity markets. This is also recognised in the revised Act. The Act includes provisions on flexible grid connection agreements, as these agreements enable more efficient use of the networks at a time when grid capacity is scarce.

Amendments to the Electricity Market Act

The amendment that entered into force in July attracted considerable attention for a corrected definition of connection lines. The corrected definition enables power plants and BESS to be constructed behind the same connection point, even when they are not situated on the same real property unit. The amendment also included another important change that received rather less attention. The amended Act introduces a requirement that network connections must be provided within a reasonable time. It specifies that the time limits of 24 months for connections to the transmission network and high-voltage distribution networks, and 6 months for distribution networks, are upper limits not general timeframes. The maximum time limit may be extended where special grounds exist. “Acceptable reasons for longer than usual connection times may include delays caused by the permitting or by the customer. Delays may also occasionally arise in exceptional market conditions due to limited availability of certain network components, or due to restrictions and bottlenecks from another network operator. The resources of the contractor used by the network operator do not constitute an acceptable reason for slower delivery times.”

In October 2025, the Finnish Parliament approved to amend the Act to facilitate the integration of the increasing electricity production and consumption loads into the transmission and high-voltage distribution networks. Further details are available in our legal alert on the bill. This amendment entered into force on 1 January 2026.

Key amendments to the Act included, inter alia,

High-voltage distribution network development obligation: Distribution network operators will be entitled and obligated to develop and operate high-voltage distribution networks, if they have existing high-voltage networks. High-voltage distribution networks may in 2026 include networks exceeding 110 kV which were previously classified as connection lines or part of a transmission network. This amendment provides more connection options for electricity users and producers.

Broader use of separate lines: Operating separate lines will not constitute ‘network operation’ subject to network licensing, even if the connected power plant capacity exceeds 2 MW. This enables wind farms, solar farms and other electricity producers to construct direct connections to electricity-consuming facilities without network licensing or fees. Under the preceding Act, direct connections between electricity consumption and production by virtue of separate lines without a network licence was only possible if the two were located on the same real property.

Introduction of flexible connection agreements: In areas with limited network capacity, network operators must offer flexible connection agreements. These enable electricity users and producers to obtain network capacity more quickly, at least in part, with the possibility of increases later. Under the Principles (see below), earlier flexible connections receive no priority over later ones, meaning the available capacity agreed in existing flexible agreements may be reduced if additional flexible agreements are concluded.

Energy Authority decision on Principles

Following consultation periods in early November and early December, the Energy Authority issued its new Principles decisions to network operators on 15 December 2025. The previous principles were from 2020.

The Principles, once approved, are binding upon network operators, aim to give guidance on how the Act shall be applied and ensure that the networks are used as efficiently as possible. The new Principles introduce reforms with substantial implications for the rights and obligations of both network operators and parties seeking to connect to networks.

The new Principles reflect that access to grid has or is becoming problematic in certain areas of Finland and acknowledges a need to re-evaluate the distribution of capacity whilst encouraging development of particularly the high-voltage networks.

Key changes in the new principles include:

Allocation of capacity between parties seeking to connect to the network

The Energy Authority considers, the introduction large numbers of very high-capacity network connections as incompatible with non-discriminatory network services and customers' reasonable service requirements, as connecting extraordinary users may leave typical users without a connection.

Under the Principles, network operators must establish capacity thresholds to prevent high-capacity electricity connectors from blocking network access for typical connectors. The network operator shall determine, by region and voltage-level, the connection capacity above which the capacity allocation principles apply. The provision ensures capacity is allocated to meet the needs of multiple typical connectors rather than being reserved for a single high-capacity connector.

In practice, this provision changes the first-come, first-served principle. Network operators may need to assess more broadly which projects are connecting to the network, which fulfil the criteria for connection (see below) and allocate available capacity between them.

The network operator determines the actual capacity need of the connector & introduction of UIOLI principle

The Energy Authority notes that incorrectly granted connection capacity can delay network access for other parties. Whilst the connector's requested capacity serves as the starting point, the network operator shall ultimately determine the capacity.

If a connector has excessive capacity relative to actual need, without proper justification, the network operator must adjust the agreed connection capacity accordingly, thus firmly introducing the ‘use it or loose it’ principle (UIOLI principle) into Finnish electricity market regulation.

The network operator must require a certain level of maturity from projects before concluding connection agreements

Network operators must set out maturity criteria in their connection principles to ensure capacity is reserved for projects that are sufficiently certain to proceed. The aim is to prevent connectors from reserving capacity prematurely, which may block access for more other connectors.

Network operators may make binding connection offers once the project is i) sufficiently mature and ii) likely to proceed soon. Generally, a legally valid land use plan and building permit as well as submitted project permit and expropriation permit applications for the grid connection, if applicable, can be considered sufficient evidence that a project is likely to proceed.

If you have any questions regarding the matter, please feel free to contact any of Borenius' attorneys or those with whom you usually work.