Last Month’s Electricity Price Rises in Finland and Estonia, Drops in Lithuania

The Estonian and Finnish price areas of the Nordic power exchange Nord Pool Spot (NPS) saw a price increase in September, while the NPS ELE area spanning the Estonian-Latvian border and the NPS Lithuania area both experienced a price drop.

In the NPS Estonia price area, the price rose 4.5% month-on-month to 42.15 euros, while NPS Finland saw an increase of 7.5% to 41.03 euros per megawatt-hour.

The September average price in the NPS Lithuania price area fell by 17.7% compared to August, to 44.53 euros. The NPS ELE area saw a drop of 16.4% to 42.81 euros per megawatt-hour.

Lithuania’s electrical system saw increased output at thermal power stations in September to match the cooler temperatures, which lowered the deficit across the Baltics. This was also a reason for the price drop in the Lithuanian price area. The NPS ELE price dropped as well, on the back of both the decrease in Lithuania’s output deficit, and the increase in transmission capacity over the Estonia-Latvia border that was made available to the market.

Influenced by Finland’s deficit, the overall NPS system price for September rose by an average of 1.81 euros, reaching 25.38 euros per kilowatt-hour. At the same time, the system price remained nearly 5 euros per megawatt-hour lower than Estonia’s regulated market price, which is in its final months of effect.

Annual maintenance work on Finnish nuclear reactors increased the deficit in Finland last month. Due to ongoing constraints, there was not enough free transmission capacity between Finland and Sweden to import enough electricity from Sweden to cover Finland’s shortfall.

An average of 69% of the transmission capacity between the NPS Estonia and NPS ELE price areas that was made available to the market was utilized in September, and maximum capacity utilization was only reached for 11% of the hours. The reason for the low load between these areas was the price similarity – for 89% of the time, the prices in the NPS Estonia and NPS ELE areas were at parity.

The NPS Estonia and NPS ELE areas recorded total sales of 421 gigawatt-hours of electricity in September, out of which 385 gigawatt-hours were sold in the Estonian price area and 36 gigawatt-hours in the ELE price area. The amount of electricity purchased in these areas also decreased by 12% compared to August, to a total of 519 gigawatt-hours. Next-day purchases in the Estonian price area came to 212 gigawatt-hours, while the demand from Latvian and Lithuanian market participants trading in the ELE area was much greater, at 307 gigawatt-hours.

Along with the transactions made in the same-day market, the demand from Estonian market participants was 216 gigawatt-hours, which accounted for 37% of domestic consumption. In August that figure was 46%.

12 gigawatt-hours of electricity were exported from Estonia to Finland in September, while 110 gigawatt-hours were imported from Finland to Estonia. A month earlier, export was 55 and import was 100 gigawatt-hours.

The price of electricity in the Baltics is significantly influenced by the fact that a large share of the generation capacity in Latvia and Lithuania is based on natural gas. By Elering’s estimate, the price of natural gas imported into Estonia fell in September to 38.41 euros per megawatt-hour, from August’s figure of 39.35 euros. The price of gas was mainly affected by the euro’s increasing strength against the dollar.

Carbon dioxide emission prices fell in September to the level of the previous month – from 8.35 euros at the start of the month to 7.24 euros at the end of September.

The full overview of the electricity market in September is available here (in Estonian).