Electricity Market Act Reform 2025: Key Changes, Compliance Essentials & Opportunities for Energy Projects

Authors: Elisa Panula, Jenny Karlsson, and Saara Järvelä Read Time: 5 min

The upcoming amendments to the Finnish Electricity Market Act (HE 45/2025) will transform the way grid connections and energy production are regulated. For project developers, energy companies, and legal advisors, understanding these changes is essential for protecting investments and ensuring compliance. With the law entering into force on 1 January 2026, stakeholders must act promptly to align projects and contracts.

Key Changes in the Finnish Electricity Market Act

1. New Definitions and Licensing Flexibility

One of the most notable changes is the introduction of a new definition for ‘electricity generation connection network’. This refers to a network that connects two or more power plants or storage facilities to the grid through a shared connection, owned by one or more producers or storage operators. At the same time, the definition of ‘connection line’ has been clarified to cover all equipment and lines needed to connect a user, power plant, or storage facility to the grid.

Building and operating a production connection network will no longer require a grid operator’s licence, provided that electricity is not supplied to wholesale customers or end users. This opens the door for greater flexibility and competitiveness, allowing, for example, several wind farms to connect through a single network without triggering licensing requirements. However, this flexibility comes with responsibility: contractual arrangements must be precise, and measurement areas must be correctly defined to avoid costly mistakes.

2. Possibility to Build Over 110 kV Networks

The reform introduces a significant change for high-voltage network construction: it will now be possible to build networks with a voltage level exceeding 110 kV. This opens new opportunities, particularly for large industrial and energy production projects that require efficient electricity transmission over long distances. For clients, this means better capacity and flexibility when connecting large production facilities to the grid. At the same time, it can reduce bottlenecks and improve security of supply, but it requires careful planning and management of the permitting process.

3. Expanded Development and Connection Responsibility

The responsibility for developing and connecting regional and local high-voltage networks will be broadened. In practice, this means that network operators’ obligations to ensure connection possibilities and sufficient grid capacity will increase. For clients, this brings more predictability and certainty that new production projects can be connected under reasonable conditions. On the other hand, it may increase costs for network operators, which could be reflected in connection fees. A special provision applies to distribution system operators that do not currently operate a high-voltage network: under certain conditions, they may refuse to develop a new one.

4. Flexible Connection Agreements

The reform introduces the possibility of more adaptable connection agreements, which can significantly benefit project developers and energy companies. Two main types of flexibility are emerging:

• Fixed-Term Flexible Connection Agreements
  These agreements allow temporary adjustments to connection capacity or conditions for a defined period. They are particularly useful for projects with phased commissioning or seasonal production variations. For example, a wind farm might secure additional capacity during peak production months without committing to permanent infrastructure changes.
• Permanently Flexible Connection Agreements
  These agreements provide ongoing flexibility in connection terms, enabling long-term adaptability to changing operational needs. This could include the ability to increase or decrease capacity over time or integrate new technologies such as storage without renegotiating the entire contract.

Flexible agreements reduce the risk of delays and cost overruns by aligning grid connection terms with project realities. They also support innovative business models, such as hybrid generation-storage setups. However, the increased complexity means that contractual clarity is again critical: roles, responsibilities, and technical parameters must be precisely defined to avoid disputes.

5. Detailed Project Information in Permit Applications

Permit applications for electricity network licences must now include more detailed information about the project, including confidential details regarding the intended use of the connection network and the connected facility. This elevates the importance of confidentiality and requires applicants to pay special attention to the content and accuracy of submissions.

This means that the Energy Authority’s role in evaluating permit processes and timelines is growing. Recent experience shows that processing times can vary significantly, and the influx of applications has led to congestion, causing delays. Clients should prepare for longer timelines and build flexibility into project schedules. A well-prepared comprehensive application can help mitigate these risks, but proactive planning is essential.

💡Confidentiality
💡Accuracy
💡Timeline consideration

6. Paid Advance Ruling Requests

A major change introduced by the reform is that advance rulings are now possible under the amended law. This gives project developers and energy companies a valuable tool for obtaining legal certainty on complex regulatory questions before committing significant resources. Advance ruling requests are subject to a fee of EUR 6,800. Advance rulings can provide critical legal certainty in complex connection or permitting scenarios, helping avoid costly mistakes later. Clients should factor this into early-stage planning and decide strategically when an advance ruling is worth pursuing.

Transitional Rules and Legal Certainty

Agreements signed before the new law enters into force will remain subject to the old rules, ensuring legal certainty and safeguarding investments that have already been made. This means the new requirements will not apply retroactively to existing contracts. If you have signed a connection agreement before the law takes effect, now is the time to review your documentation.

Measurement Areas and Balance Responsibility

Under the new law, a measurement area can be either a connection line or a network, and this definition determines who the balance responsible party is and how production and consumption are reported. It is even possible to have several measurement areas within a single connection line, meaning that a battery and a wind farm could have separate balance responsible parties. Approved metering systems are required, and errors in energy measurement can lead to serious consequences.

Legislative Status

The legislative process is complete, and the law will enter into force on 1 January 2026. The Energy Authority and Fingrid regularly publish guidance related to the amendments.

Planning a new project or reassessing existing agreements? Our Energy Team is ready to guide you through the upcoming regulatory changes and help you secure a competitive edge.