Eesti Energia: Fall electricity price to be half of last year's level

String lights. Picture is illustrative
String lights. Picture is illustrative Source: Siim Lõvi/ERR

Electricity futures suggest that the price of electricity this fall and early winter should be just half of the level last year, Armen Kasparov, head of energy products for Eesti Energia, said.

Regional market disruptions have notably affected the electricity price in August and September. The average price plus VAT for September was 14.76 cents per kilowatt-hour as of Friday, while the August average came to 11.33 cents/kWh.

"A service disruption of a power cable linking Lithuania to Sweden has been the factor with the most profound effect on prices these past weeks," Kasparov told ERR, adding that repairs should be completed on Thursday, September 21.

He said that because the Baltics' renewables output does not yet meet demand, local electricity tends to be more expensive than in the Nordics. The Lithuania to Sweden link being out of commission means that the Estonia-Finland cables remain the only link between the Baltics and Nordics the throughput of which is not enough to even out prices between Finland and the Baltic countries.

In other words, not enough cheaper electricity from the Nordics reaches the Baltic region. Even so, market prices have been considerably cheaper this August and September compared to last year – the monthly averages were 43.43 cents in August and 27.43 cents in September last year.

According to Kasparov, electricity futures suggest that the price of electricity will remain roughly half of what it was last year in fall and early winter.

"Forecasts do not suggest the return of sky-high prices we saw last year," he said.

He added that recent weeks' relatively higher prices are the result of power link failures or repair and maintenance work at nuclear power plants, and that the price should not fluctuate too much if such things can be avoided in the future.

However, there are a lot of variables that make up the electricity market, with the price of natural gas one in Europe.

"The latter in turn largely depends on the weather – fall and winter temperatures will determine consumption and the situation of Europe's gas reserves. However, the start of the heating season and reduction in solar power is sure to hike prices somewhat," Kasparov said.

The Eesti Energia representative remarked that a household's consumption habits are still the number one factor when it comes to energy bills. Changes to the market price of electricity only affect customers who do not have a fixed-term electricity package.


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Editor: Karin Koppel, Marcus Turovski

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