Energy industry’s Leskelä tells what is the good side of super electricity prices

In the beginning of the year, Finnish exchange electricity customers have been tight-fisted, as frost from fires has increased consumption and windless weather has raised electricity prices to record highs.

CEO of Energiateollisuus ry Jukka Leskelä reminds that Finland still has, on average, one of the cheapest electricity prices in Europe.

Electricity is cheap on average because so much has been invested in wind power. But even investments require a return, Leskelä reminds.

“If the prices weren’t sometimes high, only the plants operating at a higher price would leave our production. Then we won’t have the capacity anymore when situations like the one we saw in the beginning of winter come up,” says Leskelä.

That is, if the price of electricity were constantly cheap in Finland, it would not be worth investing in it anymore. This, in turn, would increase the risk of price increases as production decreases.

Leskelä reminds that, for example, last year, exchange-traded electricity cost an average of just over five cents per kilowatt hour. Futures prices at the end of the year are also very moderate.

“It’s good that the market sometimes also rewards electricity producers, when most of the time they reward electricity consumers with favorable prices,” says Leskelä.

The winter that has started has also shown how bad the weather can be predicted even a few months ahead. Back in December, January was predicted to be milder than average.

“Longer-term weather forecasts are still of rather poor quality. This also makes it difficult for the electricity market to prepare,” says Leskelä.