Eesti Energia CFO and management board member Andri Avila noted that the group's first quarter financial results were affected by extraordinary circumstances, according to a company press release. These included declining electricity consumption due to the warmest winter of the past half a century, the additional negative impact of the coronavirus crisis on electricity and oil consumption, and the lowest electricity prices since the opening of the market. In addition to lower consumption, Nord Pool electricity market prices were low due to the very high level of hydro balance in the Nordic countries.

"The Nordic countries have the potential to produce more than 25 terawatt-hours more hydropower than average," Avila said. "In comparison, Estonian electricity consumption would be covered for three years with this. The effect was felt in the Estonian price area as well, as the price of electricity fell close to €0 during some nights. The low price of electricity makes our customers happy, but for the company, it meant lower sales revenue, which was not compensated by the increase in sales revenue of liquid fuels and gas."

In the Estonian price area of the Nord Pool electricity market, the average price for the quarter was €27.60 per megawatt-hour, i.e. €20 cheaper than a year ago.

In the first three months of 2020, Eesti Energia sold 2 terawatt-hours of electricity in Estonia, Latvia, Lithuania, Poland, Sweden and Finland, i.e. twice as much as its own production. Due to the low market price of electricity and the high price of the CO2 quota, electricity output decreased by 57 percent to 1 terawatt-hour on year.

Renewables account for more than half of electricity production

Renewable electricity accounted for half of electricity production in the first quarter of 2020, which showed a 14 percent increase on year due to better wind conditions and good reliability of wind farms. The other half of production was formed by electricity from oil shale, oil shale gas and waste.

The share of electricity produced from renewable and alternative sources increased to 61 percent of total production as a quarterly average. In the first quarter, Eesti Energia's CO2 emissions decreased by 65 percent to the level of 0.9 million tons. In two years, carbon emissions have decreased almost fourfold.

In the first quarter, Eesti Energia produced 122,000 tons of liquid fuels, which was only slightly below last year's record production (125,000 tons) due to a different maintenance schedule for oil plants. The sales revenue of liquid fuels increased by €5.2 million to €35 million over the year.

"Global demand for petroleum products began to fall sharply in March due to movement restrictions imposed to prevent the spread of the coronavirus," Avila explained. "We will see a negative impact on producers for several more quarters, as the market is not expected to recover before the end of this year. We have largely sold liquid fuels in advance through hedging transactions, which offers us some relief in the crisis."

The sales revenue of the network service decreased by 4 percent to €60 million due to reduced transmission volumes because of lower consumption.

Eesti Energia invested €69 million over the quarter, the lion's share of which was the investment made in the development of renewable energy, i.e. the acquisition of the land for the Tootsi wind farm.

In the coming quarters, most countries will face an economic crisis that will have a direct impact on energy consumption and prices, Avila said. "The situation ahead forces us to continue to increase efficiency and find points of savings in order to successfully pass the crisis," he added.

At the end of April, the general meeting of Eesti Energia approved the company's fiscal year report for 2019 and decided not to distribute profits.

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