Electricity exchange price around same level in 2015 as in former closed market

Last year’s weighted average electricity exchange price was 31.08 euros per megawatt-hour in the Estonian price area, which is only 38 cents more than the regulated price in force until the end of 2012.

As a result, the electricity price last year was below 30.70 euros, or below the former regulated price, for 53 per cent of the time.

According to Taavi Veskimägi, chairman of the Elering board, last year proved that the opening of the market does not necessarily mean a rise in prices for consumers. “Prices were at 2012 regulated price level for Narva power stations. This was good news for consumers, bad news for producers. Especially for those who have to earn their revenue selling electricity and not through getting subsidies,” said Veskimägi.

“Due to the current production reserves in the Nordic-Baltic electricity market, prices are falling, but this is currently taking into account the fact that both the connections and useable emergency capacities are sufficient to cope with whatever realistic production or consumption scenario in the region,” added Veskimägi.

The Estonian power exchange price in December last year was 26.72 euros per megawatt-hour and the price fell by 19 per cent compared with November. In Finland, the price was 26.56 euros, and the Nord Pool Spot electricity exchange system price 18.85 euros per megawatt-hour, or 24 per cent lower than the November price.

In Latvia and Lithuania, the electricity prices fell by 16 per cent, reaching 38.34 euros per megawatt-hour last month. The Latvian and Lithuanian price was 11.62 euros higher than the Estonian price.

The electrical connection with Finland was in use last month for 724 hours in the direction of Finland to Estonia, and 54 per cent of the transmission capacity on the market was used. The Latvian connection was in use last month almost all hours in the direction of Estonia to Latvia, and 94 per cent of the transmission capacity was used.

Carbon dioxide emission quota prices, which influence the price of electricity, were in the range of 8.06-8.59 euros per ton, and the average price was 8.28 euros per ton. Prices were slightly lower than in November.

On the basis of transactions on the Nasdaq OMX Commodities market conducted on the last trading day of December, the average electricity price in the NPS Estonia price area will be 37.46 euros in January, and the price for the first quarter of 2016 will be 35.99 euros per megawatt-hour. The last price is around five euros higher than in transactions from a month earlier.

Revenues from the transmission capacity of the Estonia-Finland connections in December totalled 121 638 euros, and on the Estonia-Latvia connections, these totalled 3.3 million euros. The yearly, quarterly and monthly product auction prices for risk hedging instruments or PTRs-limited sold to market participants were significantly lower than the actual price difference between the Estonian and Latvian price areas. As a result, market participants who bought back PTRs-limited earned over 2 million euros in total in December. Elering’s profit for cross-border capacity distribution for the previous month was 1.7 million euros in total.