Price of Electricity Falls in All NPS Price Areas in March

The Nord Pool Spot (NPS) power exchange saw a large price decrease in March, due to rising air temperatures. The Estonian price area recorded a price of 39.21 EUR/MWh, which is 19% lower than in February.

Thanks to the arrival of warmer weather, good fill levels at hydro reservoirs, and surplus production in Norway and Sweden, the electricity market price for all price areas in Norway and Sweden remained under 30 EUR/MWh, and so did the system price. This is less than half of the price in March of last year.

Although a noticeable price drop has also occurred in both the Estonian and Finnish price areas, this was primarily caused by the arrival of warmer weather, not the effect of cheaper Norwegian and Swedish power. Therefore, the highest average prices in March across the Nord Pool Spot exchange were recorded in the Estonian (39.21 EUR/MWh) and Finnish (36.51 EUR/MWh) price areas.

The primary cause of the higher price in Estonia and Finland was the decrease in international transmission capacities, meaning that the delivery of Norwegian and Swedish production surplus and cheaper hydro energy to Finland was significantly limited. Transmission capacity between Finland and Sweden has been limited due to the emergency shutdown of the Fenno-Skan 2 connection in February, and the transmission capacity of Fenno-Skan 1 was also reduced between March 5th and March 23rd. The Finnish price was also significantly affected in March by reduced imports from Russia, caused by higher capacity fees applied to them.

The March price drop led to producers in the Estonian price region offering less electricity to the market, leading to exchange sales of only 273 GWh (361 GWh in February). Out of this total, Estonian market participants sold 193 GWh, with Latvians accounting for 10 GWh and Lithuanians for 70 GWh.

Purchase amounts increased by 13% compared to February, and a total of 429 GWh worth of electricity was purchased in the Estonian price area. Amounts purchased by Estonian market participants remained level with February numbers, at 256 GWh, with Latvian market participants buying 121 GWh and Lithuanians 53 GWh. Demand by both Latvian and Lithuanian market participants grew significantly over that month (26% and 27% respectively), the main reason being the lower price in the Estonian price area compared to Lithuania’s Baltpool power exchange.

The reduction in amounts offered up on the exchange in March meant that overall purchases exceeded sales, and the difference was imported to Estonia from Finland via the EstLink 1 cable. Thus, electricity imports from Finland increased considerably compared to March, and net imports were recorded at 155.5 GWh (19.3 GWh in February). A total of 12 GWh was exported and 53 GWh imported from Finland in March.

The price of CO2 quotas continued to drop in March, with the lowest price of 6.6 EUR/t recorded at the end of the month.

The power flow over the EstLink 1 cable in March was Finland to Estonia for 86% of the time, and Estonia to Finland for 14% of the time (54% and 46% respectively in February).

The full report for March is available here (only in Estonian).