In April, electricity prices in the Baltic States were as volatile as the weather, but everything ended in favor of consumers

In April, the situation in the wholesale electricity market was as volatile as the view outside the window. However, despite the brief return of winter, last month electricity in the price zones of the Nord Pool exchanges in the Baltic countries cost an average of 60.25 EUR/MWh. Compared to March, the price decreased by 11.67 percent. These changes in the region were influenced by erratic weather, which dictated both the demand for electricity and its production from renewable energy sources.

Record solar and wind efficiency

In April, the lowest electricity price on the Nord Pool exchange in the Lithuanian price zone was -1.21 ct/kWh (with VAT), the highest was 30.25 ct/kWh (with VAT), the monthly average was 7.29 ct/kWh (with VAT). Compared to March, electricity became cheaper by 11.67 percent. At that time, the average final electricity price for consumers who chose an exchange-linked plan (ESO plan “Standard”, single time zone rate) was about 19.51 ct/kWh (VAT included).

According to Valdemar Fiodorovič, head of the Market Research and Analytics Department of the independent energy supplier Enefit, the conditions for wholesale electricity prices in Lithuania in April were mainly dictated by the unstable weather, which divided the month into two parts.

“At the beginning of April, more than one heat record was set, which led to a decrease in electricity demand and an increase in generation from renewable energy sources. For example, on April 11, at 11 a.m., this year’s hourly record for domestic solar power generation was reached – 730 MW. Wind generation at 21:00 on April 14 was also a record at 1,090 MW. Our local production is aptly illustrated by the fact that in the second week of the month, wind and solar power plants together generated more than half of Lithuania’s electricity consumption,” V. Fiodorovič describes the trends.

According to him, a total of 400 GWh of green energy was generated in Lithuania from the sun, wind and water in April, and this number reached 486 GWh in March. At that time, nationally, 956 GWh of electricity was consumed last month, compared to 1029 GWh in March.

“The first half of the month was able to put consumers in a really positive mood. However, the positive mood in the wholesale electricity market was disturbed by bad weather in the second part of April. A significant drop in air temperature dictated a higher demand for electricity. Production from renewable energy sources decreased accordingly, so the situation had to be saved by more expensive thermal power plants. This led to the fact that the decrease in electricity prices was more moderate than the beginning of the month suggested,” says the energy expert.

The situation is similar in Latvia and Estonia

In April, electricity prices remained similar in all Baltic countries. In Latvia, the wholesale price was 7.29 ct/kWh (with VAT), in Estonia – 7.37 ct/kWh (with VAT).

“External factors affect all the Baltic countries in a very similar way, so it is not surprising that in the near future it is planned to merge their electricity markets into one. This would further reduce the probability of electricity price spikes. Looking at the situation of the last month, it can be seen that the weather conditions that dictated electricity demand and production also had the greatest influence on price changes in Latvia and Estonia,” assures V. Fiodorovič.

According to the interviewee, during the spring floods, the efficiency of Latvian hydropower plants, which worked extremely efficiently for a while, began to decrease – the flow of cheaper green energy to Lithuania and Estonia also decreased accordingly.

“Not only that, the repair of the Olkiluoto-3 nuclear reactor is still protracted in Finland. Various planned energy infrastructure works are also underway in Sweden. Repair work on Sweden’s two reactors, which have a combined capacity of 2.5 GW, is scheduled to be completed in May. All this limits the flow of cheaper energy to the Baltic countries”, explains V. Fiodorivič.

Geopolitical tensions may have consequences

According to an Enefit expert, meteorological forecasts promise that in May the air temperature will be up to 0.5 °C above normal, and the amount of precipitation will be up to 10 percent. below average.

“If the predictions come true, the month should not present any surprises. As usual, as summer approaches, we expect more and more efficient generation from solar power plants, as well as a greater contribution from wind power plants – all of which would allow keeping electricity prices at a low level,” says V. Fiodorovič.

However, according to him, the tense geopolitical situation in the Middle East brought unrest to the markets. Iran’s attack on Israel caused investors to panic, which led to a 20 percent drop. increased natural gas prices.

“If the situation escalates further, it will inevitably have a negative impact on the wholesale prices of energy resources.” It should not be surprising if the electricity market experiences another short-term electric shock. Those who want to live more calmly and plan their expenses more carefully should assess their consumption habits and think about fixing electricity prices for a longer period. You can also consider the possibility of installing a solar power plant – as the summer season approaches, now is the perfect time for that,” recommends V. Fiodorovič.

About Enefit:

Enefit is a green energy solutions company that offers a wide range of services and tools – from green electricity supply to smart energy storage management – that help to efficiently and intelligently respond to individual electricity needs. The company’s goal is to create a green ecosystem for its customers, where different green solutions could work synergistically.

The company started operating in Lithuania in 2007. and currently ranks second in the market in terms of the amount of electricity supplied to customers. The company belongs to Eesti Energia, the largest group of electricity production and trading companies in the Baltic States. Group companies operate in Estonia, Latvia, Lithuania, Poland and Finland. The public Enefit Volt charging network for electric cars, which is being developed in the Baltic States and Poland, currently ranks second in terms of the number of charging stations available to customers.

In addition to Enefit, Enefit Green, the largest wind power producer in the Baltic States and Lithuania, also operates in Lithuania. More than 120 employees currently work in companies operating in the country.