Electricity prices have been very volatile in Estonia this week due to fluctuating amounts of wind, Armen Kasparov, head of energy trading at Eesti Energia told ERR.

While the daily average price of electricity in the Nord Pool Estonia price zone averaged €121 per megawatt-hour (MWh) on Monday and €163 on Tuesday, the average price is set to fall to just €14 on Wednesday.

Wind conditions will have the strongest impact on electricity prices this week, Armen Kasparov, head of energy trading at Eesti Energia, told ERR.

“Wind production promises to be very unstable this week. Peak production is expected on Wednesday, which we will see reflected in lower electricity prices, and on Friday. Meanwhile on Tuesday and Saturday. wind production will not exceed 400 megawatt-hours. Finland, however, is forecast to have very high wind production throughout the week, with a peak on Wednesday,” said Kasparov.

According to Kasparov, it is normal that electricity prices depend more on wind in the fall as solar electricity production decreases. “As wind power generation in our region has increased significantly compared to last year, it is wind conditions that will have the biggest impact on electricity prices in the coming winter period,” he said.

As for the upcoming winter, Kasparov said that futures transactions suggest price levels could remain more or less the same as last year.

“In other words, last week’s high daily average prices were rather exceptional,” he said, adding that there were several reasons for this.

“The Lithuanian-Swedish 700-megawatt connection was only restored on Sunday evening. While the Auvere power plant returned to the market on Wednesday, many other and more price-influential Baltic generating facilities, including a number of gas plants, were either off the market until the weekend or continue to be,” he said.

The fact that the price of electricity in Finland is significantly cheaper than in Estonia is due to Estonia’s Nordic neighbors having a better-balanced generation portfolio Kasparov said.

“In particular, they have the advantages of large-scale wind generation, manageable hydropower generation and nuclear power for base load energy,” he said.

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