On Monday, the average electricity price in Estonia's Nord Pool price area topped €256 per megawatt-hour (MWh), one of the highest daily averages this year. The hourly price soared to a peak of €773 per MWh between 8 and 9 a.m.

Energy expert and Baltic Energy Partners OÜ partner Marko Allikson explained that the main contributors to Monday's high electricity prices were two out-of-service undersea cables: the Estlink 2, which connects Estonia and Finland with a maximum transfer capacity of 650 megawatts (MW), and the 700 MW capacity Nordbalt connecting Lithuania and Sweden.

The Nordbalt was shut down on Saturday morning due to a technical fault.

"The cause is still under investigation, but it seems to be some issue at the substation, and it's likely to be fixed sooner than expected," noted Allikson. "But as a result, 700 MW of electricity capacity is missing from the market, and of course this has a direct impact on us."

He added that the Baltic states have seen very little wind. "If you look at the price dynamics for the day, Estonia's price is similar to that of Finland when the sun is shining, but at other times, our price is significantly higher, especially during morning and evening peak consumption periods," he pointed out.

However, prices in Estonia are somewhat lower than in Latvia and Lithuania. "This is primarily because we still have the Estlink 1 connection with Finland, which helps keep our price in line with Finland during the day," the expert explained. "But at other times, this connection alone is not enough."

Enefit energy products chief Sander Randver noted that in addition to undersea cables and weather conditions, electricity prices are also influenced by the annual maintenance of combined heat and power (CHP) plants in Latvia, which will last for the next two weeks.

Regarding the weather impact, Randver highlighted that compared to the previous week, wind energy in the Baltics was down 20-50 percent on Monday.

"The Sweden-Lithuania cable will return to the market on April 2, which is the day after tomorrow already, and according to today's weather forecast, we will see this calm weather last until Wednesday or Thursday," he said. "Latvia's CHP plants will be under maintenance for several weeks."

Foreign connections significantly impact prices

Both energy experts agreed that the failure of the Nordbalt power link was mainly to blame for recent high electricity prices.

"Last week, prices were significantly lower when Nordbalt was working," Allikson recalled. "Of course, weather plays a big role here too — on sunny days, daytime prices drop. Wind conditions have a major impact too, but the direct impact of Nordbalt's failure is still very significant for our region."

However, it is difficult to predict exactly how much the failure of the Sweden-Lithuania power cable affected prices. Randver pointed out that without this cable failure, it is unlikely Estonia would have seen such a significant peak hourly price on Monday.

"Today's price spike occurred mainly during two hours in the morning and two hours in the evening, when prices rose significantly," he noted. "This indicates that the balance between very high and normal electricity prices is relatively fragile, and any small shift in the energy system can cause price fluctuations."

Allikson emphasized that foreign connections have a significant impact on electricity prices in Estonia.

"Our prices are always affected by the connections with our neighbors, as the Baltic states as a whole constantly import electricity," the partner said. "We're in a significant deficit, and as a result, whether we're getting electricity from our neighbors and at what price is very important."

The two energy experts were unable to predict what prices consumers could expect in the near future.

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