Baltic electricity prices converge in February

Following the activation of the NordBalt Lithuania-Sweden electricity connection, the electricity exchange price in Latvia and Lithuania fell significantly in February, coming close to Estonian price levels.

In the Nord Pool (NP) Estonian price area, the electricity day-ahead price fell by a quarter compared with January to 28.28 euros per megawatt-hour. In Latvia and Lithuania, the fall totalled nearly 41 per cent and prices averaged around 29.65 euros per megawatt-hour.

In Finland, the price totalled 26.09 per megawatt-hour last month, giving a monthly fall of 31 per cent. The NP system price fell by 33 per cent to 19.94 euros per megawatt-hour. The price fall in comparison with January can be explained due to the significantly warmer weather in the Baltic and Nordic States.

Cross-border power flows moved similar to previous months from Finland to Estonia and from Estonia on to Latvia. In the Finland-Estonia direction, 73 per cent of the transmission capacity provided for the market was used on the basis of day-ahead transactions, and in the Estonia-Latvia direction, 79 per cent of the transmission capacity available was used. The number of hours in which the full transmission capacity of those directions was used totalled over 200 for both the Finland-Estonia and the Estonia-Latvia connections.

Carbon dioxide emission quota prices, which influence the cost price of electricity, continued falling from 6.81 euros per ton in January to 5.15 euros in February. The price of emission quotas fluctuated between 4.67 euros and 5.81 euros per ton, which is comparable with the low price in 2014.

On the basis of transactions on the Nasdaq OMX Commodities market conducted on the last trading day of February, the average electricity price in the NP Estonia price area will be 30.55 euros in March, and the price for the second quarter of 2016 will be 29.35 euros per megawatt-hour. In the case of Latvia, the respective price forecasts are 29.05 and 31.20 euros.

Elering’s profit for cross-border capacity distribution across the Estonia-Finland and Estonia-Latvia borders for February was over 1.6 million euros in total.