A year ago in May, the price of electricity was close to zero or below it on many days. However, spring and summer prices depend on the weather.
Exchange electricity users may soon know the best times of the year. At least, if the electricity market repeats the phenomenon of last spring. In May of last year, the average taxable price of electricity was only 3.3 cents per kilowatt hour.
On several days, the price was even on the negative side for long periods of time.
It wasn’t a market disruption, but spring floods. When the rivers flood, the hydroelectric plants have to drive electricity through the turbines with great power, even though it should be done at a loss. Normally, hydropower is saved when the price is cheap.
When at the same time the sun was shining and it was also windy, in many moments more electricity was generated than consumed and the price went down.
In Southern Finland the snow melts and the rivers flood already now, but in the big hydropower plants in the north, the floods are usually scheduled for May. The flood situation varies from year to year and you don’t even know the weather, so it is impossible to reliably predict the price of electricity.
Electricity has been relatively cheap even in March, even though the big triple reactor at the Olkiluoto nuclear power plant has been under maintenance. It was feared that it would raise the price of electricity to high levels.
Last week, the average taxed price of electricity in Finland was around eight cents per kilowatt hour.
There have been a couple of delays in Olkiluoto’s maintenance, but the reactor is expected to return to production at the end of April.
Strikes also affect the price of electricity. When plants in the forest and steel industry are shut down, less electricity is consumed than normal. It lowers the demand and price of electricity.
Paras the market’s forecast of electricity prices are electricity futures. Nordic regional price futures for the second and third quarters of the year got cheaper last week. On Thursday, the taxable price for April–June was 4.32 cents per kilowatt hour, and the price for July–September was only 3.66 cents per kilowatt hour.
Futures the decrease in price has also been reflected in fixed-term contracts. There are now many short fixed-term electricity contracts of only three months.
The price of the cheapest three-month contract in the comparison service of the Energy Agency was about 6.5 cents per kilowatt hour on Tuesday. The price included a flexible element depending on the timing of consumption.
A two-year fixed contract without flexibility was offered at the cheapest price of 8.4 cents per kilowatt hour.
Even in the spring, the price of electricity varies greatly not only depending on the floods but also the weather. At most, wind turbines already produce more than 6,000 megawatts of electricity. Solar electricity is also generated from time to time with a power of more than 500 megawatts, which is equivalent to one unit of the Loviisa nuclear power plant.
According to the electricity company Väree’s market analysis, the regional price in Finland will also be reduced somewhat in the summer by the fact that the Estlink2 connection between Finland and Estonia will be cut for the rest of the summer. Electricity has usually been exported from Finland to Estonia via the connection.