Electricity Purchases in NPS Estonian Bidding Area Down 15% in February

Purchase amounts for the Estonian bidding area of the Nord Pool Spot (NPS) electricity exchange fell nearly 15% due to decreased activity by Latvian market players, as well as a price increase compared to January, brought on by February’s cold weather and consumption growth.

The cold wave that arrived in early February led to increased power consumption throughout Europe, causing a rise in energy prices both in the Nordic countries and in Central Europe. In February, the average electricity price for the NPS Estonian bidding area came out to 48.47 EUR/MWh, an increase of 8.7 EUR/MWh compared to January that was caused by colder weather and increased consumption.

Compared to February of 2011, the price in the Estonian bidding area stayed nearly the same (47.7 EUR/MWh), while the Finnish price fell by 11.77 EUR/MWh year-on-year. The decline in Finland and other Nordic countries was caused by the higher fill rate of hydro reservoirs this year. In addition, this winter saw the launch of Fenno-Skan 2, the new power link between Finland and Sweden, which increased the throughput capacity between the two countries. However, Fenno-Skan 2 suffered an emergency shutdown at the end of February and according to current plans, the link will not become operational again before May.

A total of 361 GWh of electricity were sold in the NPS Estonian bidding area in February, most of which was as before provided by Estonian market players (251 GWh), with Latvians selling 5.0 GWh and Lithuanians 105.7 GWh. The most important change was the significant increase in sales by Latvian and Lithuanian market players, despite the fact that Baltpool maintained a higher price rate than Estonia. Since the NPS Estonian bidding area is not connected to the Baltpool power exchange, the market is not operating efficiently and the electricity flows do not always go from the lower-priced area to the higher-priced one.

Purchase amounts fell by 15% in February to a total of 381 GWh. This decrease is primarily down to Latvian market players, who decreased orders significantly, to 96 GWh compared with 163 GWh in January.

Similarly to January, February’s purchase amounts overtook sales, with the difference being imported from Finland to Estonia via the EstLink 1 cable. However, the amount imported from Finland fell significantly compared to January, with net imports standing at 19 GWh (99 GWh in January). Total exports to Finland were 67 GWh and imports 86 GWh (compared to 22 GWh and 121 GWh in January, respectively).

CO2 emissions prices grew in February as well, but no sudden changes were recorded, and the peak price remained below 10 EUR/t.

The EstLink 1 power flow in February was Finland to Estonia 54% of the time and Estonia to Finland 46% of the time.

The full report for February is available here (only in Estonian).