What does the price of electricity consist of?
The total price of electricity consists of electricity sales and the electricity system service, i.e. electricity distribution and taxes.
Electricity sale and purchase prices
The sale of electricity is subject to competition. Electricity purchase costs have the highest effect on the sale price of electricity. Electricity purchase prices are determined on the Nordic electricity exchange, Nord Pool.
Costs of electricity distribution
It is not possible to request for tenders for electricity distribution. Electricity distribution service, i.e. home delivery, is purchased from the local electricity network company. Electricity metering equipment and services are also provided by the local network company.
The price of the electricity network service is mainly determined by
- the construction of the electricity system
- the costs arising from maintenance and use, and
- compensation paid for the use of the Finnish main grid.
Electricity taxation
Electricity taxes consist of
- value added tax, which is 23 per cent for electricity products
- effective electricity tax, which is added to the electricity distribution price.
Sales – electricity sale price consists of electricity procurement costs. The sale price is open to competition.
Distribution – distribution price of electricity covers the construction and maintenance costs of the electricity network and costs of electricity distribution. Tenders cannot be requested for the distribution price.
Taxes – electricity taxation consists of value added tax and electricity tax.