A peaceful winter ahead? The energy company’s portfolio manager reveals what to expect in electricity prices

This winter, the price of electricity is less uncertain than in previous years.

“For a long time, it seems that a slightly more stable winter is on the horizon,” says the energy company Helen’s portfolio management group manager Juho Kinni.

Large power plants, including nuclear power plants, are all available. Transmission connections to Sweden and Estonia are working. In addition, gas is available from the Baltics, unlike a couple of winters ago at the time of the pipe break.

The Aurora Line transmission connection from Sweden completed this year brings more capacity and evens out the highest price peaks.

There are no maintenance or outages planned for the winter months. The maintenance of Olkiluoto 3 is in the fall.

According to Kinn, security of supply is in good shape.

Moderate prices these days

Expectations for the price of electricity for this winter are moderate, Kinni states.

December has been mild, but a more wintry winter may still lie ahead.

However, in terms of the price of electricity, the weather forecasts do not extend far enough into the beginning of the year, rather the weather forecast for about a couple of weeks is essential for pricing, Kinni says.

If it gets cold, the prices will certainly rise somewhat, as the energy consumption used for heating increases, Kinni reminds. However, according to him, there is no big factor raising prices in sight now.

Momentary price spikes are possible if, for example, severe frost, lack of wind and some technical fault occur at the same time.

If there is a very cold period in Central Europe, the demand for gas there will increase and the price of electricity will rise, which in turn would be reflected in Finland via southern Sweden and southern Norway.

The current year’s low price level is largely due to the good water situation in the Nordic countries, says Kinni. It has rained a lot, and thanks to this, there has been plenty of hydropower available from Norway and Sweden.

According to Kinn, the transition from hourly pricing to hourly pricing has improved flexibility. According to Kinn, part of the industry is already quite capable of consumption flexibility, but some still have work to do. Among households, exchange electricity customers are generally more flexible in their consumption than those who chose a fixed-price contract.

The electric boiler is expected to play an important role

Electric boilers are being used more significantly this winter, Kinni says.

When electricity is cheap, these “big kettles” collect heat in their stores. When electricity is expensive, the heat accumulated in storage is directed to district heating facilities. Boilers reduce negative prices and zero prices because they run when other consumption is low.

In Finland, a lot has been invested in renewable electricity production, but large industrial electricity consumption, such as a possible hydrogen industry, will follow with a delay. As long as there is an oversupply of electricity on the market.

Kinni predicts that the market will be cyclical in the long term: first, a lot of energy production capacity is built, then consumer demand increases, after which production decreases in proportion, which results in energy production investments.

The price of electricity can therefore remain at a low level for the next few years, until industrial demand increases and balances the situation.