19.10.2018

System operator – Electricity system license for a closed distribution system

We assisted an industrial client in the licensing of a closed electricity distribution system. A closed distribution system is a particular case in terms of operation and regulation. It distributes electricity within a geographically confined industrial or commercial site or a shared services site. In addition, it does not serve the needs of households but primarily those of its owner or operator or, alternatively, an integrated group of users. This distinguishes a closed distribution system from a general electricity distribution system. Due to the nature of its operation, a closed distribution system is subject to different administrative requirements than a general distribution system.

Our advice covered both the application stage with the Finnish Energy Authority and the subsequent appeal proceedings with the Administrative Court. The license decision became legally final after the Administrative Court upheld the decision of the Finnish Energy Authority and rejected the appeal lodged by a third party. The outcome required our team’s in-depth knowledge of the electricity market legislation in Finland and in the EU.

Latest references

We are advising the wind energy company OX2 in the development and permitting of two offshore wind farm projects. The planned offshore wind farm projects called Halla and Laine are located in the exclusive economic zone of Finland. A step forward toward Finnish offshore wind power production was taken in January 2022 when two OX2 projects received the first exploration permits in the Finnish EEZ: the Halla project to be constructed west of the Hailuoto island and the Laine project to be constructed west of the city of Pietarsaari, both located in Western Finland. The exploration permits enable more extensive exploration of the seabed, providing wider information about the project areas. OX2 plans to fit up to 310 offshore wind farms on the explored areas, which, if completed, would generate 23 TWh of environmentally friendly renewable electricity. In 2020, electricity production in Finland amounted to 67 TWh. If completed, the offshore wind farm projects would significantly increase Finland’s wind power capacity. In addition to exploration permits, other authority permits are also required to carry out a wind farm project. Both of these OX2 projects are now undergoing an environmental impact assessment. In addition, preliminary negotiations with the authorities and stakeholders have been held for both projects. The projects are still in an early stage of development, and the electricity production is expected to start by the end of this decade. OX2 develops and sells wind and solar farms in Finland and Europe. OX2 has taken a leading position in large-scale onshore wind power since 2004, having developed and sold approximately 3.2 GW of wind power in Sweden, Finland, Norway and Poland.
Case published 25.2.2022
We are assisting Novana Oy with the permitting of a vanadium recovery plant planned in Pori, Finland. Novana has reached an agreement with the highly specialised global steel company SSAB to recover the by-products of the steelmaking process into high-grade vanadium products. Novana has also concluded an agreement with Neometals, an innovative project development company. Neometals believes its proprietary process has the potential to place this vanadium recovery project within the lowest quartile of production costs globally. The recovery of metals from by-products in an environmentally friendly manner is a high priority for Europe. Novana aims to use the by-products from SSAB’s steel production to recover high-purity vanadium for use in energy storage solutions, principally vanadium redox flow batteries, without the need to mine and process vanadium using traditional methods. The recovery process will be powered by renewable energy. Approximately 75% of the global vanadium supply is produced in China and Russia. It is estimated that the Novana vanadium recovery plant once operational will create a significant opportunity to supply vanadium to the European vanadium market.
Case published 5.3.2021
We advised a data centre operator in its investment in a data centre facility expansion project in Finland. Our advice covered the critical preconditions of data centre investments, including the electricity transmission infrastructure and the supply arrangements, permitting of the infrastructure and the operations and questions related to construction and real estate. Our client’s investment is among the largest foreign investments into data centre operations in Finland. The investment evidences that Finland’s cool climate, existing infrastructure and political atmosphere continue to attract new data centre investments. Our client benefited from our team’s versatile experience in the energy sector, real estate development projects and complex infrastructure projects.
Case published 3.7.2019
We are advising PVO-Vesivoima Oy in a process involving changes to the company’s fishery obligations under water law. The process was initiated by an application submitted by the Lapland Centre for Economic Development, Transport and the Environment (ELY Centre) concerning the obligations of the company’s hydropower plants located in the Iijoki River. We are assisting the company in responding to the ELY Centre’s application. The process is a significant precedent in Finnish water law. If the ELY Centre’s application is approved as is, the company would incur heavy additional costs and the use of the plants to produce regulating energy would be severely restricted. The Iijoki River is one of Finland’s most significant rivers that has been harnessed for the production of electricity. Hydropower from large rivers is a major form of regulating energy production in Finland. Hydropower is domestic and in practice emissions-free. The approval of the application would have a major negative impact on the possibility to produce hydropower on the Iijoki River and, thus, on the functioning of the Finnish electrical system, security of supply and climate change mitigation.
Case published 7.6.2019