Return of Auvere Power Plant will not lower electricity prices

Enefit Power's Auvere Power Plant in Ida-Viru County.
Enefit Power's Auvere Power Plant in Ida-Viru County. Source: Ken Mürk/ERR

Repairs at the Auvere Power Plant will be completed this week, but electricity prices are not expected to drop significantly as a result.

Andres Vainola, manager of Enefit Power which runs the plant, told ERR the post-repair inspections are currently being carried out and preparation to restart the plant is taking place. It has been out of commission since August.

But prices will not drop sharply when the plant is switched back on on October 28.

"As the Auvere plant has a capacity of 274 megawatts on the market, its impact on electricity prices in our region is rather small. Our electricity price is more influenced by the renewable energy production in the Baltic Sea region, the operation of large nuclear power plants and the reliability of external interconnections," said Vainola.

However, it will stop prices from rising further.

"However, in a situation where interconnections between the Baltics and the Nordic countries are experiencing disruptions and electricity prices in the Baltics are soaring, Auvere may bring some relief to electricity prices in Estonia," stated Vainola.

As of the beginning of this week, 3,642 gigawatt-hours of electricity had been produced in Estonia this year and Auvere 22 percent.

The plant is prone to problems and is often in need of repairs.

Prices considerably lower in Finland, Sweden

Last week, the average price of electricity was €70 per hour in Estonia and today (October 26) it is €88. Prices in Finland and Sweden are much lower, below €30 and €20 per hour, respectively.

There is a simple answer to the difference in price: Finland and Sweden use more wind and water in their domestic production. There is not enough capacity to sell it on to the Baltics and lower prices in the region.

One of the links between Sweden and Lithuania is also underrepair.

"(Therefore) the price is often based either on the Central European exchanges through the Lithuanian-Polish link or on the bids of more expensive local producers without any significant link to Nordic prices due to the Estlink bottleneck.," said Energy expert Marko Allikson from Baltic Energy Partners.

Finland and Estonia are connected by two Estlink cables. Estlink 1 has 350 megawatts of capacity and Estlink 2 is 650 megawatts. If there were more transmission capacity with Finland, the price in Estonia would be lower now.

"The Nordic countries currently have sufficient hydro resources, which has helped to keep prices there below the rest of Europe. Windy low-pressure systems have also helped, with prices often in the single digits or even negative," said Allikson.

The Nordic countries' prices tend to fluctuate with the weather.


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Editor: Helen Wright

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