In June, the price on the power exchange and the price in the Baltic States differed greatly

In June, the Nord Pool Spot price (NPS, the Nordic power exchange) fell by nine per cent and reached 33.46 euros per MWh. In addition to the typical summer decrease in electricity consumption, the higher hydro reservoir level in Nordic countries also contributed to the fall in prices. 

The hydro reservoir level at the beginning of June was higher than at the same time for the previous two years, but by the end of the month, it had levelled off at the same level as in 2011, which is 64% of maximum.

The increased level from hydro reservoirs resulted from growth of electricity exports in Norway, and the total production during the month exceeded domestic consumption by 15 per cent. Finland faced a progressive deficit, and only 75 per cent of domestic consumption could be covered in June.

The average price of electricity in the Estonian NPS price area was 53.36 euros per megawatt-hour in June, having grown by almost 44 per cent compared to the month before. One of the main reasons for the increase in the price seen in Estonia was the opening of the NPS price area in Latvia on 3 June. The average exchange price for electricity in Latvia between 3 June and 30 June was 55.84 euros per MWh. In the NPS price area for Lithuania, the price in June increased by 28 per cent and reached 54.82 euros. At the time the price area was opened in Latvia, prices in Latvia were the same as in Lithuania.

In Latvia, the previous month was characterised by importing energy, and consumption was 43 per cent larger than domestic production. In June, Lithuania imported 79 per cent of its electricity to cover domestic needs from neighbouring systems despite the high power exchange prices, which would seem a good reason to presume that domestic power plants could have been started.

Starting with the opening of the price area in Latvia, the price of electricity in Estonia, Latvia and Lithuania was the same during 90 per cent of the time. Last month, there was a deficit of transmission capacity between Estonia and Latvia 11 per cent of the time, and a deficit of transmission capacity between Estonia and Finland 74 per cent of the time.

Having remained low since the beginning of the year, the price of carbon dioxide emission allowances displayed growth in June. Compared to May, the price of emission allowances increased by almost one euro and fluctuated between 3.87 and 4.74 euros per tonne.

According to Elering’s estimate, the price of natural gas imported to Estonia decreased by 68 cents in June, and the average price for the month was 32.27 euros per MWh.

The full market overview is available here (in Estonian).