Finland's public broadcaster Yle wrote last week that zero or negative electricity prices will soon be history, as both commercial and domestic customers are learning to optimize their consumption, and this is happening in Estonia too.

For instance, district heating companies take advantage of negative electricity price hours to heat their boilers.

This leads electricity providers to buy more power from the market, in anticipation of higher demand during lower prices, reducing windows of close-to-zero or negative prices.

Allikson, a board member of Baltic Energy Partners, said low and negative electricity prices are mainly caused by an excess of uncontrollable renewable energy.

Finland experienced such occurrences more frequently than Estonia last year, partly due to the Estlink 2 outage.

He said: "In Finland, there were 720 hours of negative electricity prices in the 2024 calendar year, compared to 183 hours in Estonia. The number of negative hours in Estonia last year was surely limited by the Estlink 2 undersea cable failure, which restricted the inflow of cheaper electricity from Finland to Estonia."

Producers are generally not keen to sell at these prices, even as consumers are happy to pay low prices, the expert noted.

This shifts consumption to these hours, but producers tend to avoid generating power during those times, opting for flexibility in consumption or production instead.

"This motivates market participants to learn how to manage their consumption or production, creates conditions for storage technologies and flexible consumers and producers, and in the long term reduces the likelihood of negative hours occurring," Allikson said.

He added that shifting electricity consumption is feasible with electric boilers, which Finnish and Estonian heat producers have invested in. These typically operate during cold weather, limiting their impact in summer when solar power drives prices down, the expert said.

"In addition, many large consumers in both Finland and Estonia can shift consumption to hours with lower prices. Household consumers can also adjust their consumption, such as charging electric cars, electric heating, or using other appliances during lower-priced hours," Allikson said. "Many companies also offer automatic electricity consumption optimization solutions to household consumers."

Renewable energy producers in Finland and Estonia can reduce production during negative price periods, he added, noting negative or zero prices create opportunities for battery storage, allowing electricity use from these when market prices are high.

Estonia's electricity prices are quoted on the Nord Pool exchange.

--

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