Enefit: Cold & Windless Weather Fuels High Electricity Prices in Estonia

Electricity prices in Estonia have been very high recently due to the cold and windless weather. According to Tiit Hõbejõgi, acting head of energy trading at Enefit, these higher prices are expected to continue, though no significant increase beyond that is foreseen. "Looking at the coming days, the cold and windless weather is set to continue, which means that high electricity prices – higher than usual, ranging from €150 to €200 euros per megawatt-hour (MWh) – could continue in the future. According to the forecast, it will get significantly colder over the weekend, but as consumption falls at the weekend, we do not see the prices rising significantly, rather they will remain within the same range," said Hõbejõgi. Gas prices have also jumped recently due to the cold weather and are now at their highest level in two years. According to Hõbejõgi, the old gas-fired power plants that are still operating in many parts of the Baltic states are also having an impact on prices. "Now, it is actually gas power plants that largely determine our prices. Consumption is currently very high across the Baltics – at 5,000 megawatts – which means gas power plants are definitely the ones setting the final prices. Because the price of gas has risen, this naturally has a direct impact on the price of electricity," Hõbejõgi explained. Currently, electricity is being imported into Estonia at maximum capacity from Finland, where, according to Hõbejõgi, the transmission capacity exceeds 1,000 megawatts. Oil shale power plants are also still actively operating, although the Auvere oil shale power plant is currently undergoing repairs. Due to the weather, Estonia's solar parks are not particularly productive. However, better conditions and lower prices are expected from March onwards. "At the moment, when the solar panels are covered with snow, they are not producing anything. But when the panels are clean and the sun is shining, solar production will start to increase. The beginning of spring is the time when production may start to increase," explained Hõbejõgi. "At the moment, wind and renewable energy sources have a smaller share of the market, as we have had rather calm weather. As consumption is very high, most of the production during the winter period still has to be provided by fossil fuel-run power plants. We cannot avoid that at the moment, but if we take the Baltic states as a whole, since the beginning of the year, oil shale has provided almost 40 percent, wind 35 percent, and everything else makes up the rest." Prices remain volatile and will exceed €400 in the coming days before falling back to around €100 in the mornings and at night. According to Hõbejõe, battery parks to store energy would help balance out any potential sudden price increases or decreases. "The more battery parks there are, the more they will have an impact on the price of electricity the following day. Wednesday is a great example of how, in the first half of the day, batteries could be fully charged for €100 in the morning and then discharged before noon at a price of nearly €400. The more batteries there are, the more stable prices could be, and of course, end consumers would also benefit significantly from this," said Hõbejõgi. ---