362 S. KILPELÄINEN ET AL.
The vision extends the energy business interest towards services, also
reaching small customers and towards enabling new business models.
Securing a positive outlook for profits in the energy business is important in the emerging market since energy companies will be needed in
the future as well. Because of EU regulation, there is no return to the
old system where publicly owned, vertically integrated utilities predominated, while counting on new energy cooperatives and private individuals
to bear the main responsibility for energy provision services is probably
not realistic. Moreover, public actors expect to receive some tax income
from the sector although so far electricity and fuel taxes have been more
important to this end. The fate of the energy business is especially open
in the district heating sector where many existing infrastructures operated
by publicly owned companies face the prospect of a lower utilisation rate.
The smart grid working group was tasked with proposing operating
methods and regulations for enabling the changes outlined in the vision.
The resulting proposals seek to clarify the roles and rules in the electricity
market to ensure fair competition among incumbent and emerging actors,
to support the development of new business models as well as innovations
helping to decrease the electricity costs of customers. The group proposes
that demand flexibility, the provision of new services to customers as well
as energy storage should be treated as competitive business activities (for
energy storage, see next section). They also call for a customer-driven
retail model (Ministry of Economic Affairs and Employment 2018, pp. 12
and 16). The main proposals of the group received solid support from
many stakeholders in our interviews.
To provide flexibility services and enable the participation of small
customers in the electricity market the group directs attention to aggregators. While the industry has so far been the main actor providing flexibility
services—by offering to reduce consumption in peak demand situations—
aggregators could unleash the flexibility potential of small customers.
Their participation in the flexibility market is expected to improve security
of supply, in view of the weakened outlook for the demand of baseload power and the associated weak profit outlook for those incumbent
companies whose business revolves around base-load power. Flexibility
can likewise improve efficiency, taking less costly resources better into
use, while driving down costs for electricity users. Equal treatment of all
actors and the understanding that aggregators bear the responsibility for
any imbalance they might cause are central to ensuring that aggregators
The vision extends the energy business interest towards services, also
reaching small customers and towards enabling new business models.
Securing a positive outlook for profits in the energy business is important in the emerging market since energy companies will be needed in
the future as well. Because of EU regulation, there is no return to the
old system where publicly owned, vertically integrated utilities predominated, while counting on new energy cooperatives and private individuals
to bear the main responsibility for energy provision services is probably
not realistic. Moreover, public actors expect to receive some tax income
from the sector although so far electricity and fuel taxes have been more
important to this end. The fate of the energy business is especially open
in the district heating sector where many existing infrastructures operated
by publicly owned companies face the prospect of a lower utilisation rate.
The smart grid working group was tasked with proposing operating
methods and regulations for enabling the changes outlined in the vision.
The resulting proposals seek to clarify the roles and rules in the electricity
market to ensure fair competition among incumbent and emerging actors,
to support the development of new business models as well as innovations
helping to decrease the electricity costs of customers. The group proposes
that demand flexibility, the provision of new services to customers as well
as energy storage should be treated as competitive business activities (for
energy storage, see next section). They also call for a customer-driven
retail model (Ministry of Economic Affairs and Employment 2018, pp. 12
and 16). The main proposals of the group received solid support from
many stakeholders in our interviews.
To provide flexibility services and enable the participation of small
customers in the electricity market the group directs attention to aggregators. While the industry has so far been the main actor providing flexibility
services—by offering to reduce consumption in peak demand situations—
aggregators could unleash the flexibility potential of small customers.
Their participation in the flexibility market is expected to improve security
of supply, in view of the weakened outlook for the demand of baseload power and the associated weak profit outlook for those incumbent
companies whose business revolves around base-load power. Flexibility
can likewise improve efficiency, taking less costly resources better into
use, while driving down costs for electricity users. Equal treatment of all
actors and the understanding that aggregators bear the responsibility for
any imbalance they might cause are central to ensuring that aggregators