Enefit: Cold weather and lack of wind keeping electricity prices high | News

Electricity prices in Estonia are expected to remain high in the coming days due to rising gas prices and cold, windless weather, with most electricity currently being generated by oil shale-fueled power plants.

Estonia Electricity Prices Driven by Gas and Weather

According to Tiit Hõbejõgi, acting head of energy trading at Enefit, electricity prices are expected to remain elevated, ranging from €150 to €200 euros per megawatt-hour (MWh). While no significant increase beyond this range is currently foreseen, the cold and windless conditions are set to continue.

“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 recently jumped to their highest level in two years, also due to the cold weather. Hõbejõgi noted that gas-fired power plants, still operating in the Baltic states, are significantly impacting 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.

Estonia is currently importing electricity from Finland at maximum capacity, exceeding 1,000 megawatts. Oil shale power plants are also operating, though the Auvere oil shale power plant is undergoing repairs.

Solar parks in Estonia are currently unproductive due to snow cover, but production is expected to increase with improved conditions starting in March.

“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.

Currently, fossil fuel-run power plants provide the majority of Estonia’s electricity, with oil shale accounting for almost 40 percent and wind for 35 percent of the total since the beginning of the year.

Prices are expected to remain volatile, exceeding €400 in the coming days before falling back to around €100 in the mornings and at night. Hõbejõgi suggested that battery parks for energy storage could help stabilize prices.

“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.