While the Nordic country is due to announce its intention to join NATO on Sunday, the Russian company responsible for supplying electricity has decided to deprive it of its energy because, according to it, of unpaid bills.
This is a new stage in the tumultuous relations between Russia and Finland. This Saturday, Moscow suspended its electricity deliveries to its neighbor due to unpaid bills, announced RAO Nordic Oy, 100% owned by the Russian company InterRAO. This decision comes against a backdrop of rising tensions between Moscow and Helsinki, which has announced its desire to join “without delay” to NATO under the influence of the Russian offensive in Ukraine.
Helsinki-based RAO Nordic Oy has not received payment for electricity supplied to Finland since May 6, the group said in a statement, noting that “This situation is exceptional and takes place for the first time in more than twenty years”. “We are therefore obliged to suspend the import of electricity from May 14”, explains the supplier. “We hope that the situation will soon improve” and that deliveries from Russia will resume, adds the group. The company did not say whether these settlement issues were related to European sanctions targeting the Russian economy after the invasion of Ukraine. As the main importer of Russian electricity to the Nordic markets, RAO Nordic has also been active in the European Union since 2002.
According to Fingrid Oyj, a Finnish energy transmission company, RAO Nordic had notified it that it would stop imports because it was having problems receiving payments from Nord Pool. “Nord Pool is the one paying them. Fingrid is not a party to this electricity trade. We provide transfer connection from Russia to Finland”, Reima Paivinen, Fingrid’s senior vice president of operations, told Reuters. Asked whether payments should be made in rubles, the Nord Pool spokesperson kicked in: “We never had settlements in rubles, only in euros, Norwegian kroner, Swedish kroner and Danish kroner, according to our standard procedures.”
About 10% of the electricity consumed in the country
The operator of the Finnish electricity network, for its part, assured that it could do without Russian electricity, which represents around 10% of the electricity consumed in the Nordic country. “We were prepared for this and it won’t be difficult. We can manage with a little more imports from Sweden and Norway,” said Timo Kaukonen, an operations manager at network operator Fingrid, on Friday. The capacity to import Russian electricity to Finland is currently around 900 megawatts (MW), he explained. Already at the end of April, Fingrid had reduced the import capacity from Russia from 1,300 to 900 MW in order to “safeguarding the security of the electrical system in Finland” in a context of developments in the international situation.
Finland currently has four fully operational reactors at two power plants, supplying around 30% of the country’s electricity. A fifth, a 1,650 MW EPR reactor built by France’s Areva, was also commissioned in March at the Olkiluoto site in the south-west of the country. But, at the end of April, its operation at full capacity was pushed back from July to September. As a reminder, the construction of this EPR reactor, which alone should provide about 15% of Finland’s electricity consumption, was undermined by additional costs and twelve years behind the initial program.
Tensions at the top
At the beginning of May, the two neighboring countries had already clashed indirectly on the energy field. A contract with the Russian group Rosatom to build a nuclear reactor in northern Finland had indeed been canceled due to “risks” related to the Russian invasion of Ukraine, according to the Finnish-majority Fennovoima consortium leading the project. The latter pointed out that the Rosatom subsidiary involved in the project, RAOS Project, “has been unable to mitigate these risks”. “This means that the cooperation with RAOS Project is terminated with immediate effect.” Estimated at more than 7.5 billion euros, the 1,200 megawatt reactor project, located in Pyhajöki, in northern Finland, dates back to 2010 and had already suffered from numerous delays and uncertainties.
These announcements are part of a context where geopolitical tensions are at their highest. On Thursday, the President and Prime Minister of Finland expressed their support for membership “without delay” to NATO, specifying that the decision of the Nordic country would be announced on Sunday. Finland’s entry into NATO would be “certainly” a threat to Russia, reacted the Kremlin. “The enlargement of NATO and the rapprochement of the Alliance to our borders do not make the world and our continent more stable and more secure”, warned Russian spokesman Dmitry Peskov on Thursday. Russian diplomacy has also affirmed that if Finland joins, it will be “obligated to take reciprocal measures, military-technical and otherwise, in order to put an end to threats to its national security”.