Electricity Price Drops in Baltics and Nordics in November

The Nord Pool Spot (NPS) power exchange saw price drops in all price areas in November, with the exception of the Tromso price area in Norway. The greatest drops were recorded in the NPS ELE and NPS Lithuania price areas.

The NPS system price fell by two percent in November to 34.21 euros per megawatt-hour.

The prices decreased in spite of the drop in Nordic hydro reservoir fill rates to below last year’s November levels, which cut Norway’s electricity exporting capacity nearly in half. The export of electricity from the Nordics was also reduced by the growth in consumption, primarily in Norway, where consumption grew by nearly seven percent compared to October. The first days of cold weather at the end of November also showed a trend towards rising electricity prices.

The NPS ELE and NPS Lithuania price areas showed a decrease in electricity prices in November, by 11% to 37.53 euros and by 12% to 39.33 euros per megawatt-hour respectively.

The NPS Estonia price area saw a price drop of seven percent, and the November price was 37.49 euros per megawatt-hour. Prices in the NPS Estonia and NPS ELE areas reached equality in November thanks to growing output in Latvia, reducing the transmission capacity deficit in the Estonia-Latvia direction.

Latvia’s electricity generation grew by 45% compared to October, and covered 90% of its domestic consumption in November. This had a significant impact on price formation in both Estonia and Lithuania.

In Lithuania, domestic generation fell by 15% compared to October, and covered only 32% of domestic consumption in November. Local producers could not compete with suppliers of cheaper hydro energy from Latvia, so it was cheaper to import electricity from neighboring systems.

The restriction on the Fenno-Skan 1 direct current interconnection between Finland and Sweden kept the NPS Finland price higher than the NPS system price. The Finnish price was 2.74 euros above the system price in November, at 36.95 euros per megawatt-hour.

Power flow across the Estonian-Finnish interconnection EstLink1 was highly varied last month, with abrupt direction changes. For example, one hour saw 76 megawatts of export, while the next hour saw imports of 317 megawatts. For the majority of the time, 66% of all hours, the power flow was in the direction from Finland to Estonia.

In the NPS Estonia price area, and the NPS ELE virtual price area that spans the Estonian-Latvian border, November saw total sales of 493 gigawatt-hours of electricity, with the Estonian price area accounting for 80% of those. Sales in the NPS ELE price area increased six fold thanks to supply from Latvian and Lithuanian market participants, to 100 gigawatt-hours. Out of this, 46 gigawatt-hours came from Latvia and 54 gigawatt-hours from Lithuania.

The NPS Estonia and NPS ELE price areas saw total purchases of 549 gigawatt-hours of electricity, out of which 234 gigawatt-hours were bought in the Estonian price area, while demand from Latvian and Lithuanian market participants in the ELE area accounted for 394 gigawatt-hours.

On the Elbas intraday market, Estonian market participants sold a record 10.6 gigawatt-hours of electricity in November (up from 1.3 gigawatt-hours in October), and bought 3.7 gigawatt-hours, same as October. Sales figures in the intraday market increased in November primarily thanks to the resale of Latvian hydro energy to Finnish market participants to cover peak hours.

Estonian market participants purchased a total of 238 gigawatt-hours of electricity in the day-ahead and intraday markets in November, which accounted for 33 percent of November’s overall domestic consumption.

According to Elering’s estimate, the price of natural gas imported into Estonia was 37.8 euros per megawatt-hour in November, which is 0.25% above October’s price. The slight increase was due to the growth in the nine-month average crude oil price, and the euro’s weaker exchange rate against the dollar in November.

The price of carbon dioxide emissions grew to 9.08 euros per ton in mid-November in expectation of the arrival of cold weather, but then reversed direction and fell to 6.20 euros per ton on the last trading day of the month, which is the lowest price in recent months.