As it became clear that the Finnish model was not compatible with that of the Nordic market, the Finnish Government proceeded to separate their transmission grids from IVO and PVO and to create the new national transmission company Fingrid, now at the core of the power industry in Finland. The Finnish power market is that it was designed in an original way, relying largely on market mechanisms, consumer choice, and consumer information. The use of regulation is kept to the minimum. If this happens frequently, Fingrid incurs losses, which signal the need to invest in transmission lines. The rules are straightforward, predictable and effective.
Attention needs to be given to market power in the Finnish electricity market.
Finland and the wider Nordic market are still relatively concentrated. Finland does regulate price according to a fixed formula. Prices are controlled through ex post plaintiff action by the competition or regulatory authority. This approach can be cumbersome. The authorities in charge are active, but it is not clear if they are strong enough to prevent abuses.