Elering’s Q1 revenue growth meets the prognosis

Elering’s first quarter revenue increased by 8 million reaching 42.5 million euros. “In the winter months, financial results are positively affected by both the increased electricity consumption and winter tariff structure,” said Peep Soone, Financial Manager of Elering.

Elering’s financial results are significantly affected by the seasonality and a considerable part of the annual profit is earned in the first quarter of the year. For instance last year the profit from the first quarter made up to 46 per cent of the annual net profit. In the second and third quarter, the size of revenue and the profitability together with transmission volumes will decrease significantly.

Operating costs grew by 3.8 million euros and reached 20.6 million euros. The main reasons behind the growth in operating costs were the increases in the purchase cost of both balance energy and loss electricity in connection with the opening of the electricity market. Net interest costs decreased by 0.3 million euros.

In the first quarter, Elering’s operating profit reached 21.9 million and net profit 20.6 million euros. The whole net profit will be used to finance an extensive investment programme in the amount of 200 million euros. This amount exceeds the operating cash flow by approximately four times and additional loan capital is needed. This year the biggest investment projects are EstLink 2, the second interconnection between Estonia and Finland, and the first unit of Kiisa emergency reserve power plant. In the first quarter, 15.8 million euros’ worth of investment was made into fixed assets, approximately the same amount as a year ago.

Elering’s full Q1 financial report is available here.

Elering is an Estonian electricity system operator which aims to guarantee a high-quality electricity supply to Estonian consumers at all times. To ensure supply, Elering maintains and develops a national transmission network and its external connections. It manages the Estonian electricity system in real time, ensuring that the transmission network functions well and that there is a balance between production and consumption.

Micro producers Generate 28 Megawatt-Hours of Renewable Energy in Q1

Most of the micro producers were only added to the list of subsidy recipients in the second half of last year.

A total of 1520 euros in renewable energy subsidies was paid out to micro producers in the first quarter of this year. The largest one-month subsidy – 355 euros – was paid out in March to the owner of a 100-kilowatt wind turbine. The smallest subsidy amount was 0.91 euros, paid out in February to the owner of a solar power plant.

The combined capacity of the generating equipment between the 16 micro producers is 405 kilowatts. Out of these, 11 are solar power plants, with a combined capacity of 69 kilowatts. The largest solar power plant has a capacity of 10 kilowatts, and the smallest one – 2.5 kilowatts. Over the first three months, owners of solar power plants claimed subsidies for 5.7 megawatt-hours of electricity produced.

There were five wind-powered electricity micro producers as of March, with a combined installed capacity of 336 kilowatts. The smallest micro producer’s wind turbine is a 10-kilowatt unit, and the largest one has a 150-kilowatt unit.

Micro producers are power plants with a capacity of up to 200 kilowatts.

Electricity Export Nearly Doubles in March

Exports to Finland grew by more than a factor of four, to 66 gigawatt-hours, and exports to Lithuania nearly doubled, to 250 gigawatt-hours. Exports to Latvia grew by 61 percent, coming to 263 gigawatt-hours.

286 gigawatt-hours of electricity were imported in March, which is a tenth more than the same time last year. Out of total imports, Finland provided 40 percent, Latvia 39 percent, and Lithuania 21 percent.

Estonia’s March electricity output grew by 35 percent year-on-year on the back of exports, coming to 1095 gigawatt-hours. Domestic consumption increased by eight percent at the same time, to 810 gigawatt-hours. The average air temperature in March was five degrees cooler than the same time last year, causing an increase in consumption. Estonia’s electrical balance had a surplus of 286 gigawatt-hours in March.

Latvia produced two percent more electricity this March than in the previous year, with total output reaching 513 gigawatt-hours. At the same time, Latvia’s hydro power plant cascade produced 44 percent less electricity in March than last year, due to the fact that the natural springtime increase in the water flow of the Daugava had not yet achieved full strength. Domestic electricity production enabled coverage of 73 percent of Latvia’s own electricity consumption in March, and the total deficit in the March electrical balance was 194 gigawatt-hours. Latvia imported most of its additional electricity from Estonia, while a smaller share came from Lithuania.

Lithuania’s electricity output in March was 11 percent higher than in the previous year, at 334 gigawatt-hours. Production managed to cover only 37 percent of Lithuania’s electricity consumption in March, so 566 gigawatt-hours of electricity had to be imported. The consolidated results of Lithuania’s electricity trade show that in March, imports from Estonia came to 190 gigawatt-hours, while 412 gigawatt-hours, or 68% of the total, was imported from third countries. At the same time, the consolidated electricity trade numbers show that Lithuania exported 36 gigawatt-hours of electricity to Latvia in March.

The combined electricity deficit of the Baltic States was 474 gigawatt-hours in March, a decrease of 26 percent compared to the same period last year. March’s deficit accounted for 20 percent of all Baltic consumption. Consumption across the Baltics grew by 7 percent in March, year-on-year.

In the Nordics, March saw an annual increase in output of 5 percent and an increase in consumption of 11 percent. Denmark saw production rise by 36 percent, while in Finland it was 16 percent, and in Sweden it was 2 percent. The growth came despite the fact that the water level in hydro power plant reservoirs was 38 percent lower compared to March of last year. Electricity output in Norway, which produces a significant part of its electricity in hydro power plants, fell by three percent in March. At the same time, consumption in Norway grew by 14 percent year-on-year.

Overall, the Nordics imported 428 gigawatt-hours of electricity this March. A year ago this month, the Nordics had exported 1.6 terawatt-hours of electricity.

The full electricity system report for March is available here (in Estonian).

Universal Service Electricity Purchases Fall to 13 Percent of Total Consumption in March

The average electricity consumption amounts of universal service clients are clearly smaller than those of clients holding a contract, as shown by the fact that in consumption point numbers, universal service users hold a 30 percent share. The other 70 percent of consumption points have an electricity purchase contract. The share of customers holding a contract grew by approximately two percentage points in a month.

Out of all customers holding a contract, 83 percent have signed a limited-term contract, while the other 17 percent have an unlimited-term contract.

Since the start of April, 1009 customers have changed their electricity seller despite already having a valid contract with another seller in March.

In March, the market shares of balance providers by electricity volume (including electricity consumed as a universal service and in network losses) were as follows:

Cold Weather Drives Up Electricity Market Price in March

The price grew the most in Norway’s Bergen price area, while the smallest increase occurred in Danish price areas. The latter were affected by the electricity price in Germany, which fell due to an increase in wind power output.

Norway’s March electricity consumption was 14 percent higher than the same month last year, alongside increases of 11 percent in Sweden, 8 percent in Finland and 6 percent in Denmark. At the same time, the availability of hydro energy in the Nordics decreased as much as 38 percent compared to the same period of 2012, as a result of the continued cold weather. While Norway is normally a significant exporter of electricity, last month it only managed to cover 94 percent of domestic consumption.

Estonia saw average air temperatures nearly five degrees below the same period last year, and the market price of electricity grew by 13.7 percent month-on-month, to 45.28 euros per megawatt-hour.

Power exchange prices also grew in the NPS ELE and NPS Lithuania price areas, by 11.4 percent to 46.18 euros and by 8 percent to 46.35 euros respectively. Finland’s price was slightly lower than Estonia’s, at 45.01 euros, an increase of 14.2 percent. Estonian and Finnish prices were equal for 74 percent of all hours in March.

In Latvia, production covered 73 percent of consumption in March, while in Lithuania it was only 40 percent. Latvia’s March output fell because a gas-fired power plant with a capacity of over 400 megawatts was shut down for annual maintenance. The maintenance was planned in anticipation of a typical year, when the Daugava River would normally have enough additional water flow to cover the deficit.

Power flow along the EstLink 1 undersea cable was mostly in the direction from Estonia to Finland at the beginning of the month, but starting from the second half of the month, power flow from north to south increased. Power flow from Finland to Estonia occurred in hours when significant amounts of electricity were flowing from the Estonian price area to the NPS ELE price area. Overall for the month, the power flow was from Estonia to Finland for 230 hours and from Finland to Estonia for 323 hours. In March, EstLink 1 operated at maximum capacity for 76 hours in the direction from Estonia to Finland, and for 118 hours in the direction from Finland to Estonia.

The price of natural gas imported into Estonia in March grew by four percent month-on-month to 33.52 euros per megawatt-hour, in Elering’s estimation. The price growth was caused both by the increase in the nine-month average price of liquid fuels, and by the weakening of the euro.

Carbon dioxide emission quota prices have stayed low since the start of the year, supporting the competitiveness of fossil fuel based power plants. By mid-March, the prices of emission quotas fell to 3.45 euros per ton, rising to 4.89 euros by the end of the month.

The full electricity market report for March is available here (in Estonian).