Finland, Norway, and Sweden

In Scandinavia, substantial progress in privatizing electricity has occurred and the beginnings of an interregional electricity market are currently underway. Thus far, Finland and Sweden have agreed to the creation of a broad electricity market encompassing all of the Scandinavian countries.

After the United Kingdom, Norway has been the most aggressive of the European countries in introducing competition into electricity markets. Norway deregulated its electricity markets in 1991 and 1992. The 1990 Norwegian Energy Act, which became effective in January 1991, calls for increased competition in the production and sale of electricity. It also allows consumers to select their suppliers. Statkraft, the state power company, was divided into two independent government-owned companies; a production company (Statkraft SF) and a transmission company (Statnett SF). Since privatization, there have been some regional mergers in Scandinavian electricity. In April of 1996, Norway's Statkraft bought into Sweden's Sydkraft for $179 million {see Endnote 223}.

Sweden is moving toward competitive generation and distribution markets at local, regional, and national networks. Several foreign investors have shown an interest in acquiring Sweden's electricity assets.

In addition to the Statkraft purchase, France's Electricity de France acquired a 25-percent stake in Graninge, and Germany's Preussen Elecktra acquired a 12-percent share {see Endnote 224}. Graninge is Sweden's sixth largest power producer {see Endnote 225}. Imatran Voima (IVO), the state-owned Finish power company, acquired a 50-percent share of Gullspangs Fraft, another Swedish utility {see Endnote 226}.

In Finland, electricity legislation took effect for the first time in June 1995, removing licensing requirements for power plant construction, power sales to ultimate customers, and imports and exports of electricity. Mandated transmission access and unbundling of various functional activities were also required under the legislation. A regulatory body will be established for oversight of the transmission network. The Finnish government also announced that it is considering the privatization of the state-owned utility IVO. IVO has become active in several cross-border electricity investments. In addition to its Swedish investment, IVO has also invested in independent power projects in the United Kingdom.