Power Exchange Prices Drop in the Baltics in July

The system price of the Nord Pool Spot (NPS) Nordic power exchange rose by one percent in July to 33.81 euros per megawatt-hour, while prices in Finland and the Baltics decreased.

Fill rates of Nordic hydro reservoirs were lower this July than the same period in the previous two years, reaching 71 percent of the maximum possible level.

Overall for the month, domestic production exceeded consumption by 20 percent in Norway and by 18 percent in Sweden. In Finland, domestic production covered 75 percent of local consumption; in Denmark the figure was 73 percent, in Latvia – 63 percent, and in Lithuania only 32 percent. The primary reason was the availability of affordable Norwegian and Swedish hydro energy, which also pushed downwards the day-ahead price levels in the Finnish and Baltic price areas.

The average price of electricity in the NPS Estonia price area in July was 40.20 euros per megawatt-hour, a drop of 24.6 percent compared to June. In Latvia and Lithuania, the price stayed the same for the entire month, at 49.16 euros per megawatt hour, representing a 12 percent drop month-on-month for Latvia and 10.3 percent for Lithuania. Last month’s price was equal across all three Baltic States for 48 percent of all hours, while Estonia and Finland’s price converged for 66 percent of all hours.

A de facto physical bottleneck emerged between the Estonian and Latvian price areas during 92 hours, or 12 percent of the time, although the day-ahead market recorded a transmission capacity shortfall for 383 hours, or 52 percent of the time. The intraday market participants traded counter to the day-ahead market, leading to a significant reduction of the actual bottleneck. Overall for the month, 90 percent of all transmission capacity released for trade was utilized.

The Estonian-Finnish electrical interconnection EstLink 1 saw power flows from Finland to Estonia for 97 percent of all hours last month. A capacity shortfall between Estonia and Finland was experienced for 34 percent of the time.

The average price of natural gas imported into Estonia fell by nearly one euro last month, to 31.30 euros per megawatt-hour. The price of carbon dioxide emission quotas generally stayed as low as it was in June, fluctuating between 4.02 and 4.66 euros per megawatt-hour.

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