Coronavirus crisis and mild weather keeps electricity and gas prices low

Power station in eastern Estonia (photo is illustrative).
Power station in eastern Estonia (photo is illustrative). Source: Artur Tooman/ERR

Mild weather and the ongoing coronavirus emergency situation contributed to lower-than-average electricity prices through March, Baltic News Service reports. Similar phenomena have been reported for the oil and gas markets.

Average electricity prices fell by 0.3 percent to €28.02 per Mwh between February and March, BNS reports, citing state-owned electricity generator Eesti Energia.

At the same time, carbon emission credit prices fell on month by nearly 18 percent, to €19.82 per ton.

Electricity stockpiling also rose; the balance of Nordic hydro stocks rose by 2.16 Twh over the same period, BNS reports.

The restrictions on movement both in Estonian and globally have had their effect on the gas sector, which has seen a 10.52 percent fall on month on the Gaspool market, to €8.63 per Mwh, and a year-on-year drop of 46.52 percent. The warmer-than-average weather had an effect here too.

Monday was an historic day in the global oil market, ERR's online Estonian news reported earlier in the week, as the price of U.S. oil went into negative numbers for the first time ever, at -US$37. While prices have moved into the positive since then, oil overproduction and the price slump affects the whole world, Swedbank chief economist Tõnu Mertsin told ERR Tuesday.

This price fall may well have a positive effect on consumers and companies that use petroluem-based products, Mertsin said, but does not help the energy sector in Estonia, particularly oil shale producers.

Hando Sutter, Eesti Energia board chair, noted that if this price drop should continue, the first planned option is to store and postpone deliveries.

 "But if it lasts longer, maybe we will have some kind of downtime in oil production. But we certainly haven't reached that stage at present," Sutter said.

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Editor: Andrew Whyte

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