Functioning of competition in the Finnish retail electricity market

Abstract

The Finnish retail electricity market has been fully open for the past ten years. However, it has been estimated that still about 70 per cent of household customers buy electricity from their local incumbent supplier. The Finnish customers have been less active than their Norwegian and Swedish counterparts, although the retail markets were opened approximately at the same time in these three countries. In each country, there still exists several barriers to competition. One of the most significant ones is the lack of customer activity. At present, the Nordic energy regulators are making efforts towards an integrated Nordic retail market in order to increase competition. The increased amount of suppliers alone will hardly be enough to increase competition. The main focus should be in improving customer activity.