RAO Nordic Oy has quickly become a strong leader in Finland’s power sector. The company was established in Helsinki in 2002 as a 100% subsidiary of the Russian power group Inter RAO UES (part of the restructured power giant RAO UES) to import electricity to Finland and sell it through bilateral contracts to customers and through the Nord Pool single energy market. After less than two years of operations, RAO Nordic was listed among Finland’s top 500 companies.
Today, having grown rapidly, it is active mainly in the Nordic region as well as in the Baltic, where it has established a subsidiary, Inter RAO Lithuania, as its regional base. RAO Nordic aims to continue to expand in the Nordic region as well as elsewhere in Europe and to augment its range of services.
Core business: electricity trading
Oleg Zakataev, Managing Director, explains, “Electricity trading is our core business at RAO Nordic.” RAO Nordic operates in the over the counter (OTC) trading market and is also involved in physical and financial trading through the Nord Pool Power Exchange.
RAO Nordic has achieved impressive success, increasing its number of employees from five to 15 and boosting its market share of cross border electricity trades between Russia and Finland from 50 MW to 980 MW, or around 10% of Finland’s overall electricity consumption. The company is currently working on boosting that market share further. Oleg Zakataev says, “Since the cross border market is limited, we are looking for other opportunities, including buying and physically selling within Finland. We are in the Finnish price zone within Nord Pool, which means we can cover the entire market.”
Operating in the Finnish energy market with access to Nord Pool is a distinct advantage for RAO Nordic. Nord Pool (which includes Finland, Norway, Estonia, Sweden and Denmark) is the largest liberalised electrical energy market in Europe and the second largest exchange trading in EU emissions allowances (EUAs) and global certified emission reductions (CERs). Nord Pool’s international derivative products, clearing house and consulting services are provided in partnership with NASDAQ OMX Commodities. As Oleg Zakataev points out, “The Finish energy market is totally liberalised and transparent, with a clear regulatory environment and benchmarks, and is based on the Nord Pool price system.”
Reliable partner for domestic and foreign companies
RAO Nordic has positioned itself as a reliable partner for foreign companies operating in Finland, and it welcomes the chance to establish new relationships. One of its competitive advantages is its highly skilled team. Oleg Zakataev says, “In trading activities, it is crucial to have very professional and experienced employees, and we are proud that we have been quite successful in attracting high level experts to work with us.” He notes that Finland offers exceptional business opportunities thanks to its strategic location connecting the Nordic countries, Central Europe and Russia, as well as its EU membership and excellent business environment.
The EU’s ambitious energy targets for 2020 have created more opportunities for RAO Nordic, which aims to take part in power and electricity projects geared to meeting 2020 goals. Oleg Zakataev says, “Finland is the best place to learn from when it comes to energy efficiency and sustainability. For example, Finland’s latest feed-in tariffs initiative for wind power is very attractive for potential investors. We aim to participate, invest, and partner in projects to build new wind parks through that initiative.”
RAO Nordic welcomes the chance to get involved in other EU power projects. Oleg Zakataev says, “RAO Nordic and our parent company are very interested in participating in new power ventures, and having the opportunity to get financing through EU funds will be essential in helping us complete the projects and also take the experience back to Russia, which is also turning green. We plan to begin with smaller projects and then evolve gradually. Once we are ready to expand, the need for financing will increase, and we will need more cooperation with the EU and investors.”
One of RAO Nordic’s goals is to benefit its parent country, Russia. Oleg Zakataev says, “We have a unique opportunity to take the most advanced ideas and technologies, including our experience in the liberalised Finnish energy market, and export them back to our home country. This can help to create new partnerships between Russia and the EU more effectively than any political speeches could do! We have a history of bringing back home the trading experience and expertise we have gained here in Finland. So why not do the same with investments?”
Addressing potential partners and investors, Oleg Zakataev concludes, “I see RAO Nordic as a business ambassador. We are open to any partnership with Finnish and European companies interested in joint projects to be implemented in Finland.”