Industry spokespersons: Electricity prices falling as solar power use rises

Solar panels at a power plant at Mäo, Järva County.
Solar panels at a power plant at Mäo, Järva County. Source: Ken Mürk/ERR

A combination of sunnier weekdays and solar power plants in Estonia have together contributed to higher electricity generation and lower overall daily electricity prices, following record levels set over the autumn and winter.

While solar power in Estonia might seem counter-intuitive to some, the lengthening days herald periods of daylight in spring and summer which lead to a much greater yield of solar generated power.

The price charts of the Nord Pool power exchange show that the price of electricity during the sunny hours of the last week is lower, remaining well below 100, sometimes even 60 euros per megawatt-hour on most days.

Electricity market NordPool's daily charts show electricity prices over the past week, while still high – exceeding the €200 per MWh mark on some days – for the entire day, during the sunniest hours (from 10.00 a.m. to 4 p.m.) the price dips well below €100 per MWh, and even below €60 MWh on some days.

Daytime weather in Estonia has been mostly clear and sunny over the past week, also.

Solar power stations connected to the grid can supply 200MW or more electricity at noon, grid distributor Elering's spokesperson Ain Köster told ERR.

Generator Eesti Energia, which also owns the network company Elektrilevi, more-or-less concurred with Elering's figure, putting it at slightly below 200MW generated by solar panels at that time of day.

This will have a knock-on effect on prices, Eesti Energia spokesperson Priit Luts said.

He said: "Nord Pool's hourly market prices are making it increasingly apparent that electricity prices fall during the day, on a sunny days. This confirms the fact that the more renewable energy that gets produced within the energy system, the more affordable prices are for consumers."

Come summer, solar power could generate up to half the electricity consumed at noon, when conditions are right, Luts added.

Windy weather can boost this even further, given the existence of wind turbines, Luts claimed.

"When the weather is windier at that same time, the lion's share of electricity may come from renewable sources, and we will see very low prices on the electricity market, because the system would not need such large-scale fossil fuel power plants during these periods," Luts said.

Wind production output in Estonia has reached over 150MW in March so far, Luts said.

More energy coming from solar power

The sector continues to grow, according to Luts.

He said: "A considerable amount of solar parks have already been set up in Estonia. As of the end of 2021, there were already 385 MW-worth of solar parks within Elektrilevi's distribution network alone."

Andres Meesak, head of the Estonian solar electricity association (Päikeseelektri Assotsiatsioon), said that if Elektrilevi and Elering could connect all the existing solar power plants to the grid, the situation would be better in terms of prices.

ERR reports that there are around 2,000 solar parks of various sizes still not so connected.

Meesak said: "In reality, the total capacity of solar power plants in Estonia which are already connected to the grid, stands at just under 400 MWh, while about 100 MWh capacity is awaiting the construction of connections," adding that the potential total capacity is currently around 1,000 MWh.

Moreover, connecting all the available solar parks to the grid would cover most of Estonia's national electricity consumption on a typical summer weekend day, he claimed.

Electricity production at conventional power stations has also been boosted this month, Luts said, with a peak of 1,080 MW reached today, Tuesday (see graph below).

Electricity production in Estonia in March 2022 (March 1 to March 16). Most days, production has reached more than 1,000 MWh, and in some days more than 1,300MWh Source: Elering

Thermal power plants at peak production also

Luts added that marketplace participation depends for conventional or thermal power plants primarily on demand and the resulting market price. This in turn depends on the price of both CO2 and of natural gas.

He said: "Narva plants running on oil shale and other alternative fuels are not the most expensive production methods used on the market today; natural gas stations continue to see peak prices."

Eesti Energia also operates cogeneration plants in Iru and Paide which together provide almost 30 MW of capacity.

Most of Estonia's wind farms are also owned by Eesti Energia's renewable energy company, Enefit Green. 

Soaring electricity prices from autumn onwards, exceeding €400 per MWh as a daily average at one point, saw several government initiatives aimed at aiding both business and private individuals with paying their energy bills - natural gas also saw record prices at the same time.


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Editor: Andrew Whyte

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