In June Record Sales of Electricity in the Estonian Price Area

Major shortages of electricity in Latvia and Lithuania led to a sharp rise in trading activity in the Nord Pool Spot Estonia price area in June, with a record 552 GWh of electricity sold and an increase of almost half in the volumes bought.

The reason for the rise in sales volumes was the increase in demand from Latvia from the end of May and the continuing need for Lithuania to import electricity to cover domestic consumption. This meant that despite the much warmer weather in Estonia, 5% more electricity was generated than in May. The majority of the electricity sold, 96% of the total volume, was sold by Estonian producers.

A total of 425 GWh of electricity were bought in the Estonia price area in June, which is around 50% more than in the previous month. The rise in volumes purchased was caused partly by the high prices on the Lithuanian power exchange, which made it cheaper to buy from the Estonia price area, and partly by the major shortages of electricity in Latvia and Lithuania.

Estonian market participants bought 206 GWh or just under half of the sales on the power exchange, which is enough to cover around 40% of Estonia’s domestic consumption.

The average price in the NPS Estonia price area in June was 47.45 EUR/MWh, which is 0.12 EUR/MWh higher than the price in May.

The volumes exported from the power exchange to Latvia and Lithuania rose markedly from the previous month. At the same time, exports to Finland fell by 31% due to the convergence of prices in the Estonian and Finnish price areas. Exports were also pushed down by the planned reduction in transmission capacity in Estlink and the emergency disconnection of the cable. Total exports of electricity in June from NPS Estonia to Finland were 135 GWh, to Latvia 191 GWh and to Lithuania 29 GWh.

During the high water of April, 127 GWh of electricity were imported from Latvia, but in June imports were only 1.3 GWh. This was caused by lower production levels of electricity in Latvia and low use of heating plants in the warmer weather. Imports from Lithuania also fell, by 44% to 27 GWh. The drop in imports was caused by the rise in the average price on Baltpool, which was up 2.23 EUR/MWh from May and remained higher than the price in the NPS Estonia price area. Almost ten times as much electricity was imported from Finland, with a rise from 0.8 to 7.5 GWh.

The average price in the NPS power exchange, the system price, was 48.40 EUR/MWh in June and 54.49 EUR/MWh in May. The Central Europe electricity price index (EEX Spot-ELIX) for June was 49.29 EUR/MWh, which was 19% lower than in May. The price in the Germany/Austria price area in June was 52.3 EUR/MWh, which was also lower but only by 8%. The main drivers of the fall in prices were the increased levels of reservoirs for Nordic hydropower plants, the price of CO2 emissions permits and the fall in the oil price in June.

The flow of electricity in the EstLink cable was in the direction Estonia-Finland 78% of the time in June, and in the direction Finland-Estonia 9% of the time.