Annual Report 2012 - Fingrid

or project is evaluated and reported as part of the
project proposals and alternative measures.
Protection against risks
Guidelines for protection against risks are maintained
in Fingrid’s instruction system. The instruction
system is composed of three levels:
Management principles; documents which
describe Fingrid’s management.
Policies; documents which specify the principles
and describe the operation of the main processes
and Fingrid’s management perspectives.
Guidelines; detailed guidelines which specify
the policies.
Risk protection takes place by reducing the likelihood
and/or seriousness of a disadvantageous
event. Damage and loss related to a risk are restricted
by means of advance protection measures
and/or corrective action carried out in retrospect.
The main means of practical protection are (usually
in this particular order): changing of procedures,
contingency plans, guidelines and safety arrangements,
improvement of technical solutions, contractual
limitation (major and unexpected risks), and
derivatives and insurance policies (risks distributed
over several parties).
Protection measures are drawn up and development
projects are launched whenever necessary to control
the risks identified as being major, and the corporate
operative indicators are supplemented for their
monitoring if necessary. Extensive projects or ones
having great significance are named strategic development
projects and presented as part of Fingrid’s
strategy. The President appoints project leaders for
such projects, approves the contents of the projects
and monitors their progress.
Limitation of risks
The limitation of risks is based on the identification,
classification, evaluation, and reporting of the
risks. The risks are limited using various mechanisms
and measures, such as by setting limits in
euros, by requiring collateral, by monitoring the financial
standing and credit rating of a counterparty,
and by using contractual limitations.
Foremost risks and factors of uncertainty
In addition to the foremost risks affecting the company,
Fingrid has identified, as part of its corporate
social responsibility, the risks that have a major impact
on society. In its selected strategic focal areas,
Fingrid has taken into account the management
of the risks that affect both society and the company
and made preparations for the risks using various
means.
The foremost risks shared by Fingrid and society
comprise a major disturbance, lack of confidence
in the electricity market, and environmental risk.
One of the company’s biggest business risks and
the biggest risk in terms of society is a major disturbance
related to the functioning of the power
system. A wide-spread disturbance in the power
system may be caused by several simultaneous
faults in the grid, inoperability of Fingrid’s operation
control system, insufficiency of production
capacity, external events, or problems related
to operation support systems or data security,
preventing grid operation entirely or partially.
Fingrid is prepared for a wide-spread disturbance
concerning Finland or the Nordic power system
by making capital investments in the transmission
grid and in reserve power. In its strategy,
the company also focuses on the versatile utilisation
of the operation control system, expedited
disturbance clearing, and management of power
shortage situations. Fingrid also makes preparations
for disturbance situations by means of various
reserves, procedural guidelines, contingency
plans, and exercises.
The loss of confidence in the electricity market is
a significant risk for Fingrid and society. This risk
may be realised for example as a result of insufficient
transmission capacity or high prices of electricity.
The company aims to contribute to the integration
of the European electricity market and to
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