Baltic Energy Market Interconnection Plan GRIP 2017

3.3.4 MARKET INDICATORS, SUPPLY AND DEMAND The natural gas supply in Finland is based mainly on import from Russia. Sufficient access to natural gas is ensured on the basis of a supply contract that is valid until 2030s. Increasing amount of biogas is produced and utilised in Finland and gradu- ally starting from 2016, the supply of LNG will also increase. The structure of the Finnish natural gas market differs from that of the common European market, where the supply of natural gas to private households and other small consumers plays an important role. In Finland, the vast majority of natural gas is supplied and consumed by major natural gas users, i.e. industrial enterprises, power plants and district heating plants. Local supply of natural gas accounts for less than 5% of the total consumption. In past years, natural gas has accounted for around 8–9% of Finland's overall energy consumption but its market share has been decreasing. Natural gas has had a key role in the combined production of electricity and heat by industry and the power plants of communities. Within recent five years, due to the decreasing demand and low market price of electricity combined with higher taxes on natural gas, the share of gas in CHP and heat production has decreased about 40% in past five years. About 1/2 of all natural gas consumed in Finland is used in the co-generation of electricity and heat and the remaining part is used mainly in industries. Other important uses are the production district heat as well as various industrial process- es and feed stock for chemical industry. Natural gas sales are affected by weather conditions, price development in the electricity and fuel markets, and industrial utilisation rate. A clear reduction was seen in Finnish natural gas consumption in past five years, with the consumption levels also falling below the longer-term average. In 2015 a total of 26.0TWh at net caloric value, equivalent to 28.9TWh at gross caloric value of natural gas was consumed in Finland. The development of the gas consumption in Finland can be seen in the graph below:

TWh

Groningen production, realised and future, TWh

60

50

40

30

20

10

0

2001

2011

2010

2014

2016

2015

2002

2012

2013

2003

2004

2009

2006

2007

2005

2008

Figure 3.18: Development of natural gas consumption, TWh (at gross caloric value) (Source: Gasum)

BEMIP Gas Regional Investment Plan 2017 |

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