Estonian and Finnish Electricity Prices Equal for 80% of Hours in August

According to data from the Nordic power exchange Nord Pool Spot (NPS), the price of electricity in day-ahead transactions was the same in Finland and Estonia for 80% of all hours in August, and the price across the three Baltic states was the same for half of all hours.

Fill rates of Nordic reservoirs was lower in August than it was in the same period of the previous two years, reaching 75% of the maximum possible level and causing the NPS system price to rise 4.7% to 35.40 euros per megawatt-hour.

Overall for the month, Norway’s production exceeded domestic consumption by 22%, while in Sweden this figure was only three percent. Denmark’s domestic production covered 74% of local consumption, while in Finland it was 72%, in Latvia – 60% and in Lithuania – 46%. Sweden’s ratio of production to consumption fell by 15 percentage points compared to July.

The average price of electricity in the NPS Estonia price area was 43.66 euros per megawatt-hour in August, going up by 8.6% compared to July. In Latvia and Lithuania, the price remained equal for the entire month at 51.31 euros per megawatt-hour, a 4.4% increase month-on-month.

A physical bottleneck in the trade between the Estonian and Latvian price areas was experienced for 65 hours, or 8.7% of the time, while the system was working in normal mode. This is despite the fact that in the day-ahead market, a shortfall in transmission capacity was recorded for 368 hours, or nearly 49.5% of the entire period. Intraday market participants made counter-transactions to the day-ahead market, leading to a drastic reduction in the physical bottleneck. Overall for the month, 88% of transmission capacity released for trade was utilized, which is two percentage points less than in July.

Power flows over the Estonian-Finnish power interconnection EstLink 1 were directed from Finland to Estonia for 73.4 percent of all hours last month. In August, EstLink 1 was loaded to maximum transmission capacity for 80 hours in the direction from Finland to Estonia, and for 108 hours in the direction from Estonia to Finland. Due to the shortfall in transmission capacity, Finland and Estonia’s prices diverged for 148 hours.

The price of carbon emission quotas generally stayed as low as it was in July, fluctuating between 4.28 and 4.50 euros per ton. The average price of natural gas imported into Estonia has fallen to 31.25 euros per megawatt-hour according to Elering’s estimates, which is 18 eurocents lower than the July price.

The full report on the electricity market in August is available here (in Estonian).