Prices have gone up on the Nord Pool exchange everywhere in Europe, including in the price areas of Norway and Sweden where prices are usually lower than in other regions. European nuclear power plants undergoing repair and cold weather are considered to be driving the price.
The average market price of electricity was €362.46 per MWh in Estonia last week, with the price fluctuating between €400 and €445 this week.
The price is high not just in Estonia as all countries with the exception of Poland saw prices around €400/MWh earlier this week. Prices have come down slightly in northern Norway and Sweden in recent days but remain well above regional averages.
Olavi Miller, market strategist for Eesti Energia, said that Sweden and Norway usually have a surplus of power, while two Swedish nuclear plants with a combined power output of 2.5 gigawatts are currently undergoing repairs. That is why there is no surplus of cheap nuclear power in southern Sweden and the average price is dominated by the expensive production of gas plants, like in Central Europe.
"January and February are statistically the coldest months in our region during which electricity consumption is very high," Miller said.
The expert said that prices will be affected by cold weather, consumers' ability to save, wind conditions and the work of nuclear plants in the coming months.
"Gas-fired power plants that are the most expensive to run come to the market in situations where there is not enough alternative power generation capacity. Worst-case scenarios where the reserve power plants of transmission system operators also have to be fired up would drive the price close to the maximum of €4,000/MWh, Miller said.
Miller said, however, that reserve capacity in Finland and the Baltics should be sufficient and the risk of power outages minimized in the region.
Three major nuclear power plants in the region are currently out of commission. These are Olkiluoto 3 in Finland (1,600 MW) and Ringhals 4 (1,130 MW) and Oskarshamn 3 (1,400 MW) in Sweden.
Miller said that the Oskarshamn plant should return to the market at the end of the week, while Olkiluoto 3 might start working at a lower output in late December. "Until then, we will need to compensate for this capacity using alternatives, efforts at which are ongoing," the Eesti Energia representative said.
He added that Estonia's newest Auvere oil shale plant being out of commission is doing little to affect the price as its output is modest considering regional energy needs and because Enefit Power's remaining six oil shale blocks with a combined output of 1,000 MW are fully operational.
Editor: Barbara Oja, Marcus Turovski