Baltic Energy Market Interconnection Plan GRIP 2017

The energy policy supports the development of gas as transportation fuel. A network of gas-filling stations, both in form of compressed gas and LNG (Liquefied Natural Gas) is gradually expanding for on-grid and offgrid locations. Both biogas and natural gas are sold in these filling stations and the tendency towards biogas is increasing constantly. The energy policy supports also the development of LNG-infrastructure, which is enabling the replacement of other fossil fuels in offgrid locations and marine segment. Terminals would enable transport of natural gas to locations outside the natural gas pipeline network, thereby increasing the diversity and reliability of ener- gy supply, while helping to reduce emissions, particularly in the industrial sector where other fossil fuels are used. In 2008, the International Maritime Organisation agreed on a revised version of the so-called MARPOL Annex VI, which sets the limits on sulphur oxide (SO x ) and nitro- gen oxide (NO x ) emissions from ship exhausts. In 2012, the EU adopted a directive that requires the sulphur content in the fuel of vessels plying the Baltic Sea, North Sea and English Channel to be reduced to 0.1% in 2015. Also, the IMO’s Tier III environment protection rules for NO x reduction in defined Emission Control Areas (ECAs), will apply to ships keeled after January 2016. In order to meet the new environmental requirements, which apply to the above-mentioned areas, emission reduction measures must be employed. Hence, the role of LNG as a marine fuel will be enhanced but major developments in LNG storage and bunkering terminals must be introduced. To encourage further development of LNG infrastructure, the Government of Finland has supported the construction of LNG terminal by invest- ment grants. In order to enhance the functioning of the gas market, competitive gas prices and security of supply, a proposal of new Natural Gas Market Act has been prepared, which would implement the requirements of European harmonised gas market model either nationally with some exceptions or fully, if Finnish gas market would be connected to the European gas market. The new Natural Gas Market Act is expect- ed to be issued to the parliament for approval in spring 2017. The current proposal targets to the gas market opening. The market opening depends on the existence of pipeline connection between Finland and Estonia and connecting the Baltic gas system to the rest of the European gas system by GIPL-project. The Balticconnector project, for which the final investment decision was made in autumn 2016 connects Finnish gas system to the Baltic States in 2020. The existence of the interconnector enables also the possibility to integrate Finnish gas market to the merged Baltic gas market, creation of which is under evaluation at the moment by the Regional Gas Market Coordination Group (RGMCG) where the ministry, regulator and TSOs’ representatives of the Baltic countries and Finland are members.

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BEMIP Gas Regional Investment Plan 2017