Electricity Exchange Price Dropped by 3% in June

In June, the price of electricity for the Estonian price area on Nord Pool Spot (NPS), the Nordic electricity exchange, averaged 35.81 euros per megawatt-hour, which was almost 3% less compared to May.

The hourly rates for the Estonian price area were quite volatile in June, ranging from 14 to 121 euros, due to maintenance works of several large production units (Olkiluoto 2 nuclear plant and Mari-Pori plant in Finland, CCGT in Lithuania), as well as connection restrictions between Kaliningrad and Lithuania.

The electricity exchange rate in Estonia and Finland continued stable harmonising on the day-ahead market in June, being equal 97.9% of the time when there was no shortfall in power transmitted. Prices in Estonia exceeded those in the Finnish area by 38 cents, while being 19.01 euros lower compared to the average electricity price in Latvia and Lithuania where it reached 54.9 euros.

The total NPS system price dropped by 4.24% last month and the system price in June totalled 25.19 euros per megawatt-hour. Price decrease was the biggest in the Tromso bidding area in Norway, whereas no negative hourly rates existed in the NPS system in June. Only the Latvian and Lithuanian bidding areas saw a rise in prices.

The Latvian power system was able to cover 54% of its electricity consumption in June. In Lithuania, the same indicator was 27%. The Baltic States as a whole remained in deficit to the extent of 430 gigawatt-hours. In order to cover their consumption, the Baltic States needed to import 62% of the deficit from third countries and 38% from Finland.

In the overall results for June, the prices of carbon dioxide emission allowances remained between 5.14 and 5.81 euros per tonne, slightly exceeding the prices in May (4.69–5.41). Elering estimates that the average monthly price of natural gas imported in Estonia was 30.01 euros per megawatt-hour. The price of natural gas influences the cost price of electricity production in Latvia and Lithuania, and the price of natural gas imported there also has an indirect influence on the price of electricity in Estonia.

Based on the financial transactions on the Nasdaq OMX Commodities market, electricity prices in the Estonian price area of NPS may be 38.80 euros in August 2014 and 40.74 euros per megawatt-hour on an average in the fourth quarter of 2014. Based on future transactions, the NPS system price is 32.49 euros per megawatt-hour.

The price point established in the June PTR-limited auction of Estonian-Latvian transmission capacity allocation held in mid-May was 16.13 euros per megawatt-hour. Eight market participants took part in the auction. The actual average price difference between the price areas of NPS Estonia and NPS Latvia exceeded the June auction price, reaching 19.09 euros per megawatt-hour.

The full summary of the market in June is available here (in Estonian).