Those electricity consumers who are not on a fixed-price contract with their supplier should sign up to a universal service instead, Kalev Kallemets, board chair at energy company Fermi Energia, says, adding that Wednesday's record price per hour of €4,000 per Megawatt-hour will not be the last time such figures are experienced.
On Wednesday between 6 and 7 p.m., the exchange price of electricity in Estonia will rise to 4,000 euros per megawatt hour. This is the maximum exchange price, which will rise to 5,000 euros in five weeks based on European Commission rules.
The €,4000-per-MWh price level will be reached between 6 p.m. and 7 p.m. on the Nordpool electricity exchange on Wednesday, the maximum possible level at present (in five weeks' time, European Commission regulations will set the cap at €5,000 per MWh).
Kallemets told ERR that our oil shale plants, which normally would ensure security of supply, have not been functioning on Tuesday and probably not on Wednesday either.
Additionally, just as in winter when high pressure areas often mean low wind speeds, or total calm, this has been happening in summer too, meaning renewables electricity generated by wind has not been making its way on to the market - and in turn very high prices are seen, just as in last December.
Kallemets added that as situation which had earlier predicted for the year 2025 has, surprisingly, already arrived, mainly due to the conflict in Ukraine and Russia's influencing activities over natural gas supplies, while the market price of the latter can be increased further should Russia shuts down gas supplies piped via the Nord Stream 1 pipeline.
"A pricing mechanism that depends on the price of gas is very problematic," Kallemets said.
One of the main reasons electricity prices are often lower in Finland than they are in Estonia is because Estonia's northern neighbor has nuclear power stations, whereas Estonia does not, Kallemets said.
"It's as simple as that. Today (i.e. Wednesday – ed.) we are importing electricity from Finland round-the-clock, thanks to nuclear energy, while Lithuania does the same via Sweden.
"It's that simple. Today we get electricity from Finland all the time thanks to nuclear energy, Lithuania from Sweden also thanks to nuclear energy. If it's not in the production portfolio, we depend on fossil fuels or the weather. It's a bad mix," said Kallemets.
All this means that oil shale power plants, whose boilers are rated at 1,400 MW, should be available and in working order when customers need it, he went on, while renewables need a boost, and nuclear power needs establishing, he said.
"We need to add all production capacities as quickly as possible. Both wind, solar and small reactors," Kallemets, whose company last year filed a planning application to erect Estonia's first ever small nuclear reactor, or indeed reactor of any size, and believes nuclear power could be a reality by 2032.
As to the future, Kallemets said what level the price of universal electricity service turns out to be will be interesting; in any case, it is worth joining up, for consumers not already on a fixed contract.
"The overriding fear is that in winter the price of electricity will end up being like today's figure, or that of yesterday (Monday – ed.) or tomorrow, as well", adding that there was no real reason to be optimistic about figures like this Wednesday's peak being re-attained or even exceeded in future.
IT and foreign trade minister Kristjan Järvan (Isamaa) announced plans for a universal price of electricity a week ago today, declining to say how much electricity might then cost, as he said to do so would put pressure on the Competition Authority, the body tasked with actually setting that price.
The service would apply to domestic consumers in the first instance, while those breaking contract to go on the service would not be subject to fines, Järvan said last week.
Editor: Andrew Whyte