This led to the fact that the price of electricity in the Baltic countries remained relatively stable compared to September: it increased by 9.4 percent. up to 9.14 ct/kWh. As every year, it is very real that the very end of autumn will not be so pleasant, both in terms of weather and electricity prices. Let’s analyze what we can expect in the near future.
At the beginning of the month – a light electric shock
The average for the entire month of October on the “Nord Pool” exchange in the Lithuanian price zone settled at the limit of 11.05 ct/kWh (with VAT). 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 22.50 ct/kWh (VAT included).
The first days of October may have brought some anxiety to consumers, especially those with variable rate plans. The demand for electricity has increased sharply, and the efficiency of wind turbines has drastically decreased. For this reason, for example, on the morning of October 2nd, the wholesale price of electricity in Lithuania fluctuated around 60 ct/kWh (including VAT) for several hours.
However, the windy weather soon returned, turning the blades of the power plants more and more intensively. Local production was quite abundantly supplemented in October by the still efficient solar power plants. The improved situation in the market is perfectly illustrated by October 20, when, due to efficient local production, negative electricity rates were recorded at certain hours, and the average price for the whole day was only 0.31 ct/kWh (with VAT).
A total of 365 GWh of green energy was generated from solar and wind per month, while the national consumption was 1023 GWh. It was the production from renewable resources that contributed significantly to the fact that electricity prices remained stable for most of the month.
Only in the second half of the month, the situation was somewhat complicated by the fact that from October 21 for a week, the operation of the “NordBalt” electricity connection, which connects Lithuania with Scandinavia, was restricted.
Temporary disturbances in the region
At the beginning of the month, a light electric shock hit not only us, but also the consumers of the rest of the Baltic countries. In October, electricity prices remained similar: in Latvia and Estonia, the energy price reached 11.05 ct/kWh (with VAT) and 11.15 ct/kWh (with VAT), respectively.
The short-term drastic increase in the price of electricity was not only influenced by its high demand and declining domestic production. Just in those days, repairs of nuclear reactors took place in Finland, as well as scheduled works in thermal power plants in the Baltic States.
In addition, in the second half of the month, the Baltic countries became more dependent on local production, as the already mentioned planned works on the NordBalt connection were announced. The 700 MW power connection with Scandinavia is one of the main factors allowing to maintain lower electricity prices for consumers.
However, stability in the electricity markets of the Baltic countries has been ensured for some time by the connection “EstLink 2”, which started operating in September, connecting Estonia and Finland.
Cold and dark will lead to higher prices
Increasingly cooler weather and rapidly shortening days always mean an increase in demand for electricity, which naturally increases its price. The fact that the days are more and more foggy also has a negative influence, so the efficiency of solar power plants decreases.
For this reason, the wholesale price of electricity in the near future will be even more dependent on wind generation, the work of hydropower plants, cheaper energy imports from neighboring countries, and the cost price of electricity from thermal power plants.
The latter, it seems, will not be very friendly to us. In October, the average price of natural gas, which is usually used to drive thermal power plants, at the Dutch TTF trading point was 40.84 Eur/MWh. However, futures contracts show that their price will fluctuate around 40-42 Eur/MWh in the coming winter, although the forecasted price was around 36-37 Eur/MWh back in September.
Although electricity prices start to climb faster every year as the cold season of the year accelerates, you can protect yourself from this. One of the simplest solutions is to fix electricity prices for the near term. This will allow you to forecast your electricity costs more stably.
However, if you are interested in changes in the electricity market and are able to adapt your consumption to changing conditions, it is worth choosing a variable price plan, because it will allow you to “catch” even very low prices. An excellent example could be the already mentioned October 20.
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**Interview with Dr. Marta Kudre, Energy Market Analyst**
**Editor:** Thank you for joining us, Dr. Kudre. With recent fluctuations in electricity prices in the Baltic region, what can you tell us about the factors contributing to these changes?
**Dr. Kudre:** Thank you for having me. The electricity prices we’ve seen in October were influenced by a combination of high demand and reduced local production. For instance, we experienced a rise in consumption due to cooler weather, while at the same time, the efficiency of wind power significantly decreased.
**Editor:** It sounds like a complicated situation. You mentioned a “light electric shock” at the beginning of the month. Can you elaborate on that?
**Dr. Kudre:** Sure. Early in October, the market saw a spike in wholesale prices, hitting around 60 ct/kWh for a few hours. This was primarily because the wind wasn’t blowing well, leading to less energy generation from wind turbines at a time when demand was surging. However, the situation improved as wind conditions got better, and solar plants also contributed significantly to local energy production.
**Editor:** That’s interesting! What role did the interconnections like “NordBalt” and “EstLink 2” play in stabilizing prices?
**Dr. Kudre:** The “NordBalt” connection, which links Lithuania to Scandinavia, is crucial as it typically allows for cheaper electricity imports that help stabilize our prices. Unfortunately, due to scheduled maintenance in the second half of October, this interconnection was restricted, making the Baltic countries more reliant on local production. Fortunately, “EstLink 2,” the new connector between Estonia and Finland, started operations in September and has been vital in supporting the region’s energy stability by allowing for better energy flows between these nations.
**Editor:** With winter approaching, how do you foresee electricity prices evolving as demand increases?
**Dr. Kudre:** As we transition into the colder months and daylight hours decline, we can expect higher electricity demand, especially for heating. This typically drives prices upward. Additionally, cloudy weather can negatively affect solar energy production, meaning that wind energy generation will become even more critical. We may see fluctuating prices depending on the weather conditions and the operational efficiency of thermal power plants and hydropower facilities.
**Editor:** Thank you, Dr. Kudre, for providing such insightful analysis. It looks like consumers in the Baltic region should prepare for potentially higher electricity prices in the upcoming months.
**Dr. Kudre:** Yes, it’s essential for consumers to stay informed and consider their energy consumption habits, particularly as the market dynamics continue to change with the seasons. Thank you for having me.
