Electricity Exchange Price in Estonia Falls to All-Time Low

According to reports from the Nordic electricity exchange, Nord Pool Spot (NPS), the average electricity price in the Estonian price area in June was 27.26 euros per megawatt-hour. This is the cheapest monthly average price in the NPS Estonian price area in the electricity market’s history.

At the same time, the electricity price in June was clearly lower than the price in the closed market, which was in force until the end of 2012.

Last month, the average NPS Finnish price was 21.52 euros per megawatt-hour and the average NPS Latvian and Lithuanian price was 42.8 euros per megawatt-hour. In comparison with May, prices decreased by 15.6 per cent in Estonia, 16.81 per cent in Finland, but in Latvia and Lithuania, prices increased by 14.56 per cent. The NPS system price decreased by 35.38 per cent, and averaged 14.43 euros per megawatt-hour.

The average price in the Estonian price area differed from prices in the Finnish areas for 30.56 per cent of the time, and was 5.74 euros higher. At the same time, prices in Latvia were as much as 15.54 euros higher than in Estonia. Prices in the Estonian and Latvian price areas differed for 71.53 per cent of the time in June.

In June, power flows in the electricity day-ahead market moved for all hours from Finland in the direction of Estonia and then onward to Latvia. Capacity between Finland and Estonia was used fully for 220 hours. The average hourly power flow of the day-ahead market from Finland to Estonia equalled 822 megawatt-hours in June, which is significantly higher than usual. For example, the average power flow from Finland to Estonia in the first five months of this year was 565 megawatt-hours. 96.6 per cent of the transmission capacity between Estonia and Latvia was used last month.

Carbon dioxide emission quota prices, which influence the price of electricity production, remained at the same level in June as compared to May, ranging between 7.24 and 7.61 euros per tonne.

According to financial transactions on the Nasdaq OMX Commodities market, the average price for electricity in the NPS Estonian price area for July 2015 is expected to be 29.90 euros per megawatt-hour, and the average price in the third quarter may reach 32.50 euros per megawatt-hour.
In June, profit from the transmission capacity of the Estonian-Finnish connections was 3.4 million euros, and 8.4 million euros from the Latvian connections. Half of the profits belong to Elering. The auction year and quarter product price of risk hedging instruments or PTRs-limited sold to the market participants were much lower than the actual price difference in June in the Estonian and Latvian price areas. As a result, market participants who bought PTRs-limited earned 1.4 million euros in profit in June. In consequence, the profit of Elering’s cross-border capacity distribution in June added up to 5.2 million euros.