Electricity price at record highs – Report reveals surprising reason for price spikes

The taxed hourly price of exchange electricity is 33.8 cents today, Tuesday, at its highest. The average hourly price is highest between 17:00 and 18:00. After this, the price turns down. At midnight, the price already drops to 13 cents.

Consumers will get used to this in the future as well. In addition to this, the country-specific price differences are large.

Electricity price differences have grown between the different price areas of the Nordic electricity exchange. This can be explained by a specialist in strategic planning and risk management of electricity procurement Mind Energyn from a recent report.

The governments of the Nordic countries and Germany have recently introduced price caps and support measures, such as Norway’s price cap “Norgespris”, as well as tax reductions to help energy users cope with rising and fluctuating electricity prices.

These have not had the desired effect.

“Our analysis shows that some of the political measures introduced during 2025, the aim of which is to narrow the price gap between the north and the south in the Nordic countries, may instead worsen the very problems they aim to solve, especially high electricity prices and large price fluctuations”, Lasse Kamp Simonsenthe director of structured trading from Mind Energy says in the press release.

In 2025, prices were at a higher level than in 2024, which was explained by unfavorable weather conditions. The differences between the southern and northern price areas of the Nordic countries have grown over time.

During the last three years, the price difference between the cheapest area (NO4) and the most expensive area (DK1) has been 58 euros/MWh, while in 2015 and 2021 the corresponding difference was 8 euros/MWh.

Prices in the northernmost parts of the Nordic countries have fallen, while in some southern bidding areas, which more closely follow the German price level, prices have risen by more than 100 percent compared to the time before the pandemic.

The situation is worrying for the part of Nordic industry whose energy costs are rising and which does not belong to the groups protected by the new price ceilings.

“One price range has so far leveled electricity prices in Finland compared to the other Nordic countries”, Mind Energy’s Finland country manager Kimmo Kuusinen says.

If energy consumption increases in neighboring countries as a result of price-equalizing, protectionist policies, it will also have indirect effects on Finland’s energy market prices.

“Our price fluctuations are very large, which is due to the production of renewable energy and low transmission connections to other Nordic countries. On windy or sunny days, the price goes down, but in the opposite situation, the price goes up easily. Of course, it also depends heavily on consumption. The Aurora line, which opened last year, improves the situation and connects us more strongly to Sweden’s SE1 price range,” says Kuusinen.

The Aurora line between northern Sweden and Finland, put into operation in November 2025, will increase cross-border capacity by 800–900 MW. This is expected to better enable the export of surplus hydropower and wind power production from northern Sweden and Finland during peak demand times.

Price differences may continue to increase

New initiatives introduced or proposed by the governments of the Nordic countries and Germany may have a negative impact on the market in the future, as they may reduce the incentives for households to adapt their electricity consumption to price changes.

Measures implemented include Norway’s price ceiling Norgespris and similar measures in Sweden and Germany.

Price fluctuations can be smoothed out if consumers and companies shift their consumption away from price spikes.

However, with new price caps and electricity tax reductions, consumers have less reason to reduce consumption during price peaks and increase consumption when solar and wind production is high.

This can lead to higher consumption, increased price fluctuations and higher prices.

In Norway, reports already show that the electricity consumption of those who chose the Norgespris model has increased by three percent. According to Mind Energy’s calculations, this has a ripple effect on prices in Denmark, Sweden and Finland.