Energy Market Overview

Both the European Union as a whole and its individual member states are desperately looking for ways to reduce energy prices before the winter – from price ceilings to floating power plants. Solutions must be chosen wisely, because more affordable prices do not encourage people to consume more wisely, and an increase in consumption increases the risk of worsening the energy crisis.

While last week’s autumn storms caused power failures in thousands of homes for shorter or longer periods of time, even more households could enjoy very cheap electricity due to the raging winds. At the same time, European countries continue to try to figure out how to reduce gas consumption in winter.

The exchange price of electricity in Estonia rose by more than half last week, as the connection with Latvia was restored and cheaper electricity was able to cross the southern border. Like most countries, Finland is anxiously looking towards winter with their transmission network operator Fingrid warning of power outages. Despite the fact that Unit 3 of their Olkiluoto Nuclear Power Plant is going to reach full capacity in the coming weeks.

The exchange price of electricity fell last week in Estonia, Latvia, Lithuania and Finland, but the most important events for Europe took place at the bottom of the Baltic Sea. Namely, Gazprom announced that the pipeline of Nord Stream 1, which was supposed to start working on Saturday after three days of maintenance, would remain offline for an unknown period of time.

The average exchange price of electricity last week in the Estonian price area was 385.3 EUR/MWh, being 8.8% lower than the week before. On the other hand in Latvia, Lithuania and Finland, the average exchange price continued to increase. The Estonian-Latvian transmission capacity was limited to 600 MW during the peak hours from Wednesday to Saturday last week, which led to Finnish prices being equal to Estonian prices throughout the week.

The average exchange price of electricity last week in the Estonian price area was 422.61 EUR/MWh, being 19.47% higher than the week before.