Expert: Estonia unlikely to get Scandinavian-level electricity prices

Power lines. Photo is illustrative.
Power lines. Photo is illustrative.

Electricity prices in Estonia, while lower than last year, are unlikely to drop to levels as low as those experienced in the Scandinavian countries, for as long as there are no more connections linking to other countries, and/or cheaper producers added to the market, according to one industry expert.

The expert, Einari Kisel, told ERR that: "As long as there are no more connections or cheaper producers, these differences will persist."

The current situation also means, among other things, that the state-owned Transmission Systems Operator (TSO) company Elering earns a substantial sum from the transmission fee.

Electricity price differentials between Estonia and Scandinavian countries are, however, no longer as drastic they were a year ago, and in this respect the situation has normalized, Kisel said.

All suppliers are required to purchase transmission rights from Elering, which is sold via auction, Kisel added; in any case, while the price of electricity in Estonia is not as expensive as might be thought when compared with other European countries, it certainly is in world terms, for instance with the economies of scale achieved in China or in North America.

CO2 emission quota components also making their influence known.

There simply aren't sufficient connections to enable cheaper electricity to be imported from the Scandinavian countries, Kisel said.

Over recent days, the price of electricity has fallen to zero during daytime in several regions of Finland, Norway and Sweden, whereas in Estonia it has dropped to that extent very seldom.

This can occur on exceptionally sunny days, for a few hours at a time, thanks to the fact that well over 600MW of electricity is now solar-generated, Kisel said – enough roughly to cover midsummer's consumption.

Burgeoning wind energy will help here too, he said, though this is also subject to vagaries of conditions, most obviously wind speeds and directions.

An additional factor in preventing Estonia's electricity prices falling further is that the much larger Polish market is a more likely destination for cheaper Nordic electricity, even with more connections put in place, Kisel added.


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Editor: Karin Koppel, Andrew Whyte

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