April 14, 2024 2:39 pm
Anticipated affordable electricity prices for spring and summer

Last year in May, the average taxable price of electricity in Finland was only 3.3 cents per kilowatt hour, with some days even seeing negative prices for extended periods. However, this phenomenon was not a market disruption but rather a result of spring floods causing increased power generation from hydroelectric plants.

During spring floods, hydroelectric plants must generate electricity at a loss due to the excess water supply. Coupled with sunny and windy conditions, this led to an oversupply of electricity and subsequently lower prices. While Southern Finland experiences early snow melts and floods, the big hydropower plants in the north typically see floods in May. The fluctuating flood situation, combined with unpredictable weather, makes it challenging to accurately predict electricity prices.

Despite maintenance on the Olkiluoto nuclear power plant’s triple reactor in March, electricity prices remained relatively low. Strikes in the forest and steel industries can also impact electricity prices by reducing consumption and lowering demand. Electricity futures are an effective way to forecast electricity prices, with the Nordic regional price futures decreasing in recent weeks. Short fixed-term electricity contracts have also become popular, offering consumers flexibility based on consumption timing.

In the summer, the regional price of electricity in Finland is expected to decrease due to the temporary closure of the Estlink2 connection between Finland and Estonia. This connection is typically used to export electricity from Finland to Estonia. The variability in electricity prices during the spring is not only influenced by flooding but also by weather conditions affecting wind and solar power generation. Overall, there are multiple factors contributing to fluctuations in electricity prices, making it necessary for consumers to stay informed and adaptable in their energy purchasing decisions.

As we approach spring and summer months again this year, exchange

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