Research on real-time pricing of electricity

Finland has a two-step organization for distribution of electricity. Producers operate as wholesalers to the industry and to electric utilities, which distribute electricity to end-users such as households, public buildings, services and small-scale industry. The sales are based on public tariffs. Here, the author describes some major pricing principles which have been generally approved in Finland. They have also been included in the national energy policy program. According to the matching principle, each customer pays for the cost he has caused. In the principle of cost accuracy, tariffs must follow the formation of the production cost structure and time fluctuation. The major goals in pricing are to cover long-term costs and to secure stable price development for electricity