It is unclear exactly how the Estlink 2 electricity cable outage will affect prices, but Eesti Energia expects them to increase. Repair work is expected to take at least seven months.

"I cannot provide specific details on how it will impact prices, but I can certainly say the effect on prices will likely be negative. Prices will probably rise," said Armen Kasparov, Eesti Energia's director of energy trading and portfolio management, on Friday.

"As for how much and in which month, it is hard to say right now. We are analyzing this with our team of analysts at Eesti Energia, and we should have more details next week," he added.

The disruption of Estlink 2 means that an increase in fixed-rate electricity package prices is also expected. "We will certainly adjust these prices. There is simply no way to hedge against electricity risk," Kasparov said.

"All market participants are acting similarly. We have already spoken with several market participants, trying to buy electricity from them, and no one is willing to sell electricity for next year anymore. Everyone is short. It is likely that everyone will make adjustments. The risks that electricity sellers now have to bear are enormous," he noted.

Kasparov cited the example of Latvia's Latvenergo, which usually offers surplus spring hydro energy on the wholesale market to other electricity sellers but is no longer doing so. "That product is priced in, and they probably expect to earn more from the exchange," he explained.

The director pointed out that the biggest issue is that the Baltic region produces 40 percent less electricity than it consumes each year. The loss of a significant external connection will affect the market.

However, he noted that the situation is less severe than during the previous Estlink 2 outage. Over the past year, new wind and solar parks, including Enefit Green's Tootsi-Sopi wind farm, have been added to the Baltic energy market.

"When it is windy, the price impact is not as severe. But during calm weather or on colder winter days, we can see pretty steep prices driven by Baltic thermal power plants," Kasparov said. "If it is oil shale, the peak price will be a bit higher; if it is gas, it will be slightly lower. The range will likely remain around €200 per megawatt-hour."

The overall impact of the Estlink 2 disruption on Eesti Energia is not positive. Existing fixed-price electricity sales contracts will not yield create the forecast revenue. While electricity prices in the region might rise, Kasparov explained that renewable energy has already been sold in advance under fixed-price contracts.

Even though oil shale power plants could hypothetically produce more, this might not result in substantial profits. "For example, tomorrow we only have three units in operation, so there is no significant gain there. Even a week ago, we had three units running, and the price was roughly the same," he said.

"The key factor in our region is the wind. If it is windy, as it more or less will be tomorrow, oil shale will not have much access to the market. If we are looking at a scenario like January 5 of this year, when wind turbines froze across the region, including Finland, then Enefit Power does gain market access. But there have not been that many days this year when all units needed to be operational," Kasparov explained.

Another factor is the price of gas on the European market. Currently, gas prices are relatively low due to expectations of a mild January in Europe.

"But if cold weather spreads across Europe, that would have another impact on prices in the Baltics, as gas power plants here would start setting the price," Kasparov said.

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