New common Estonian-Latvian-Finnish gas market gets off to successful start
The first quantities of natural gas on the common gas market between Estonia, Latvia and Finland launched today, 1 January 2020, flowed from Latvia to Finland via Estonia.
The gas streams planned for the first day of trading cover the entire current transmission capacity of the newly completed Estonian-Finnish gas link, Balticconnector.
“The launch of the new market area has meant a significant increase in the activity of cross-border gas trading between these countries. Consumers and the economy of the entire region stand to benefit from the increased competition. The results of the first day of trading on the common market clearly confirms that the establishment of Balticconnector was the right decision, in spite of the scepticism broadly expressed in regard to the necessity of the connection,” said the chairman of the Elering management board, Taavi Veskimägi.
The gas flowing to Finland on the first day of trading originated from the Inčukalns facility in Latvia, from which gas sellers supply their customers in Finland.
In the past, transmission fees had to be paid for moving gas from one country to another, but starting from the New Year, gas flows within the common Estonian-Latvian-Finnish gas market without monetary expense for market participants. Transmission fees for maintenance of the gas network are payable only if gas enters or exits the common market.
The gas market covering Estonia, Latvia and Finland is the first bidding area in Europe to encompass three countries.
To ensure that the market functions flawlessly in the new situation, the gas system operators Elering, Latvia's Conexus Baltic Grid and Gasgrid Finland formed a monitoring group for the opening of the new market. The system operators will continue cooperation for further development of the regional gas market, drawing on the experience from the new common tri-country gas market.
The annual volume of the gas market is approximately 40 terawatt-hours.