Inclusive of VAT, the average market price of electricity in Estonia reached a record €1.09 per kilowatt-hour (kWh), and will peak from 7-8 p.m. at a price of €2.31 per kWh.

This means that if a domestic consumer starts running their 5KW electric sauna stove to heat up their sauna starting at 7 p.m., just one hour of heating up their sauna will run them €11.55 plus network fees.

Speaking in an appearance on Vikerraadio, Armen Kasparov, energy trade director at the Estonian state-owned energy group Eesti Energia, said that behind Estonia and Finland's current record high electricity prices is the ongoing cold snap, which has resulted in an increase in power consumption at a time where there is little wind energy on the market.

While typically surplus cheaper electricity from Finland is transmitted to Estonia via the Estlink undersea power transmission cables, bringing the price down south of the Gulf of Finland as well, according to Kasparov, as the weather in Finland is currently even significantly colder than in Estonia, demand is very high, and the former is facing a three-gigawatt power deficit.

"One coal-fired power plant is currently down in Finland – the 500-megawatt Meri-Pori coal-fired power plant," he noted. "Had this plant been on the market, prices would have been slightly more affordable."

Kasparov also noted that it's currently cold in Finland, Sweden and the Baltics all at once, meaning that demand is high everywhere all at once. Thus Finland is facing an electricity deficit, which they are receiving from both Sweden and the Baltics, and that's driving up the price in Estonia.

Energy expert and Baltic Energy Partners OÜ partner Marko Allikson highlighted the fact that nearly all plants on the Baltic side are currently operational and supporting production. He said it's typical for winds to die out in cold weather, but right now Finland is seeing practically an Olkiluoto Nuclear Power Plant's worth of wind.

Regardless, it's still much colder than anyone expected.

"A few weeks ago, transmission system operators (TSOs) forecast for this winter that everyone should be well prepared, but the current cold is clearly colder than anyone could predict," he acknowledged.

Allikson added that Estonia's in the same boat together with Finland, as Estonian electricity is transmitted to Finland, and Finland is the one driving up the price.

"If you look at Finland's consumption, typically Friday night is sauna night for the Finns, and the highest consumption was forecast for that time – that's why prices are highest on Friday evening," he explained. "Two hours in a sauna will run you €10-20 in electricity costs alone. But both [Finnish TSO] Fingrid as well as the Finnish Ministry of Economic Affairs have issued a statement calling for reducing consumption, and in fact it actually has been, quite substantially, over the course of the day. In other words, forecasts for high consumption today have not materialized."

Eesti Energia contributed 1,100 megawatts (MW) of electricity to the market on Thursday, and just under 1,000 on Friday morning, which over the course of the day rose again to 1,000 MW and beyond. Nonetheless, Eesti Energia can't use the entirety of its energy production capacity to drive down the price of electricity.

Kasparov noted that as Finland is facing a 3,000 MW electricity deficit, and Eesti Energia could at best, at peak production capacity, produce 1,300 MW of electricity, that would still leave a 1,700 MW hole that Finland would need to fill from somewhere.

Kasparov predicts that electricity prices will remain high through Monday or Tuesday, at which point temperatures are forecast to warm up, and prices should start to come down accordingly.

--

Follow ERR News on Facebook and Twitter and never miss an update!