Power market gets off to a successful start

In April, the Estonian power market was partially opened, starting with all the free consumers and along with it, the Nord Pool Spot (NPS) Estlink bidding area was initialized. As of today, there are more than 225 free consumers actively participating in the market.

In the last two months that the market has been up and running, more than 602 GWh of electricity has been sold in the Estlink bidding area, along with 306 GWh bought.  In April, 133 GWh were bought into Estonia through the exchange, which constituted 21% on Estonian internal consumption. In May, the respective number was 147 GWh, which constituted 25% of Estonian internal consumption. Despite the positive numbers, Estonia still falls short of the 35% consumption capacity criteria, that is has to meet in order to qualify as an open market. Elering CEO Taavi Veskimägi pointed out, that the start of the power market has been very successful. „Based on the recent developments, we met and reached a common understanding with the Baltic system operators and NPS as to our next steps, which are aimed at starting a common power market from 1 January 2011. This will bring about further opportunities for Estonian consumers and producers, “said Veskimägi. Veskimägi added that in relation to the successful start of the market, the Baltic system operators have made a proposal to Nord Pool Spot to participate as co-owners in the power exchange. Today NPS is owned by the Nordic system operators. The average power price in April was 35, 79 EUR/MWh, which is 19, 3% higher than the Estonian regulated price. In May, the average price was 34, 81 EUR, which is 16, 0% higher than the regulated price. The prices in the Estlink bidding area and the Finnish bidding area differed during 78% of all hours. „Since Estonia joined the Nordic power market on 1 April the growth in market capacity has provided us with great joy – in two months the total volume of trading in the Estlink bidding area has effectively doubled,“ said Nord Pool Spot chairman of the board Mikael Lundin.In April, 175GWh of electricity from the Estlink bidding area were sold to Finland and 182 GWh were bought from Latvia. In May, 145 GWh were sold to Finland and 25GWh to Latvia. During the same period 23 GWh were bought from Finland and 33 GWh from Latvia. In April 130 GWh of all electricity generated in Estonia was exported, in May the respective figure rose to 270 GWh, which is roughly 30% of the monthly electricity production in Estonia.A free consumer is a consumer whose annual consumption at one point of consumption exceeds 2 GWh. After partially opening the power market, the price of electricity for the free consumers is generated in a free and competitive environment between buyers and sellers. The transparency of the price of electricity is guaranteed by the power exchange and the network service is offered by the system operator Elering. Nord Pool Spot is the largest power market operator in the world and provides an electricity trading platform for both intra-day and a day ahead auctioning for 330 businesses from 20 countries.