AK: Cold winter drives economic growth via energy sector
The ongoing cold weather has had a boosting effect on the economy so far, largely driven by increased electricity consumption and production, ETV news show "Aktuaalne kaamera" (AK) reported Tuesday night.
Tuesday morning had seen a consumption high for winter so far, and was only a little off the all-time record, while the increased production and higher electricity prices will affect economic growth positively at a time when the coronavirus pandemic has been making its effects known and where the preceding trend had been for a fall in electricity generation output.
Swedbank Chief Economist Tõnu Mertsina told AK that: "Electricity production had been sharply declining for a long time. At the beginning of last year, heat production also fell very sharply. So the comparison base is very low this year. explained Tõnu Mertsina, Chief Economist of Swedbank.
January 2021 six degrees colder on average than January 2020
Electricity consumption in January stood at 10 percent more than it had in the same month in 2020, during a much milder winter – average temperature in January 2020 was +3.1C compared with -2.9C this January – and also in the face of more people staying at home due to COVID-19 factors – though that has to be offset against a fall in commercial consumption.
Increased consumption has also meant Estonia has remained a net importer of electricity, primarily from neighboring Finland and Latvia, via the Nord Pool marketplace, a spokesperson told AK.
The short term picture also appears the same.
Ain Köster, head of communications at grid distributor Elering, said that Tuesday had: "...Shown the peak consumption for this winter [so far]. At around 9.30 a.m., Estonia's consumption was 1517 MW. This figure itself may not mean much to many people, but considering the all-time peak is 1587 MW, this morning we were close enough to the all-time high."
Much hinges on pandemic situation
The energy sector makes up about 3.5 percent of the economy, meaning changes make their effects known on GDP, though for 2021, January alone is insufficient to make predictions.
Electricity and other energy demand and supply will also continue to reflect the COVID-19 situation. During the initial spring wave, consumption fell dramatically, but recovery came in the last quarter of 2020.
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Editor: Andrew Whyte