Russian state-owned energy supplier RAO Nordic Oy cut electricity exports to Finland on Saturday in an unprecedented action. Though the cutoff followed Finland’s announcement that it is seeking membership in NATO, the company did not cite this as reasoning.
The energy supplier released a statement saying it had to suspend its electricity exports because Finland allegedly failed to make payments for its May electricity supply.
“Unfortunately, we are forced to note that for the volumes which have been sold on Nord Pool exchange since the 6th of May, funds have not yet been credited to our bank account. This situation is exceptional and happened for the first time in over twenty years of our trading history,” RAO Nordic said.
“Unfortunately, in the current situation of lack of cash income, RAO Nordic is not able to make payments for [Finland’s] imported electricity from Russia. Therefore we are forced to suspend the electricity import starting from 14th of May. We hope that the situation will get improved soon and the electricity trade with Russia could resume,” it added.
Timo Kaukonen, the manager of operational planning for Finnish transmission system operator Fingrid, did not challenge that they failed to pay for the supply but said the country was ready for all its electricity imports from Russia to end early Saturday morning.
“It is at zero at the moment, and that started from midnight as planned,” said Kaukonen.
According to a press release from Fingrid, the end of the Russian electricity supply would not threaten “the sufficiency of electricity in Finland.” Imported electricity from Russia accounts for approximately 10% of Finland’s total consumption.
“The lack of electricity import from Russia will be compensated by importing more electricity from Sweden and by generating more electricity in Finland,” said Reima Päivinen, senior vice president of power system operations at Fingrid.
Despite Russia saying the stoppage in electricity exports to Finland was due to lack of payment, pundits believe the action’s timing could be intended to send a message related to Finland’s move toward NATO membership.
“Russia’s move is officially related to payment issues and not to Finland’s NATO membership, but the coincidence in timing is striking,” said Samuel Ramani, associate fellow at Royal United Services Institute for Defence and Security Studies.
A recent report from OilPrice.com also indicates that natural gas could be the next target, as between 60% to 70% of Finland’s natural gas imports are from Russia. However, Finnish electricity demand is typically satisfied by oil, biomass, and nuclear power, with natural gas only representing 5% of the country’s total consumption.
