Compared with November, the average electricity price in Estonia rose by 2.1% in December to €84.3 per megawatt-hour (MWh), or 8.4 cents per kilowatt-hour (kWh). Compared to December last year (€89.0/MWh), the electricity price in 2024 was 5.3% lower and nearly five euros cheaper. The biggest drivers of cheaper prices were cheaper electricity from the Nordic countries and record high wind energy production.

The most expensive electricity prices in December occurred between 07:00 and 09:00 in the morning and between 15:00 and 17:00 in the afternoon. The morning prices were 52.4% higher than the December 2024 average, at €128.5/MWh (12.8 cents/kWh). Between 15:00 and 17:00, the average price was €121.0/MWh (12.1 cents/kWh) – 43.5% higher than the monthly average. The cheapest prices in December were between 23:00 and 04:00, where prices averaged €40.0/MWh (4.0 cents/kWh), being 52.5% cheaper than the monthly average.

On the basis of January 2024, a similar price behaviour can be expected this month. In January last year, prices remained 28.2% higher between 07:00 and 09:00, similarly to the previous month (Dec 2024), and around 44.0% higher between 15:00 and 18:00. Last January, too, the lowest prices occurred between 23:00 and 04:00, when prices were 44.4% cheaper than the monthly average. It should be noted that January last year is not an accurate indicator of what will happen this month, but it does indicate the general trend in consumption, which in turn helps to optimise consumption patterns. However, January 2024 was exceptionally cold. For example, high consumption due to very low temperatures and low wind energy generation led to record high electricity prices on 5 January last year.

Electricity consumption in Estonia reached 711 gigawatt-hours (GWh) in December, compared to 472 GWh produced in the same month. The deficit was covered by imports. In December 2024, Estonia produced a record 201 GWh of wind energy. This is around 2.2 times more than in December 2023. Compared to November 2024, wind energy production increased by around 18%. Estonia’s wind energy production has now set new records for three months in a row. Significant amounts of electricity were also produced in December from oil shale (151 GWh), biomass (56 GWh) and coal gas (44 GWh). The rest of the electricity was generated from other sources on a smaller scale.

In December 2024, wind energy covered 28.4% of the electricity demand due to good wind conditions (7.5% in 2023), while shale covered 21.2% (33% in 2023), coal gas 6.2% (4.6% in 2023), biomass 7.8% (6.8% in 2023) and imports 33.6% (46.1% in 2023). The proportion of remaining energy sources was minimal.

From 2023, Estonia has seen a significant rise in ‘zero prices’ – prices equal to or less than zero. Between 2020 and 2022, there were 3–7 hours of ‘zero prices’ in Estonia per year. In 2023, the hourly electricity exchange price was zero or less 167 times, while in 2024 as much as 236 times. The zero hours are mainly due to high renewable energy production, in particular solar energy.

Electricity prices in the other Baltic countries were relatively similar to Estonia: the average electricity price in Latvia in December 2024 reached €90.5/MWh, which was €6.2 higher than in Estonia. The average price in Lithuania was €89.7/MWh, being €5.4 more expensive than in Estonia. The price difference can mainly be attributed to maintenance work on the Estonian-Latvian cable, which involved the loss of around 2/3 of transmission capacity.

In 2024, the Baltic region as a whole produced a total of 4.7 TWh of wind energy and 2.8 TWh of solar energy. The largest share – 70% of the wind energy and around 50% of the solar energy – was produced in Lithuania. Estonia produced 25% of the wind and 36% of the solar energy, and Latvia 5% of the wind and 14% of the solar energy, respectively.

In December, the average price of natural gas required for thermal power stations was €44.5/MWh on the Dutch TTF exchange. Prices fluctuated significantly during the month, with the fall at the beginning of the month due to warmer than usual weather and the resulting lower demand for heating, as well as high renewable and nuclear energy production. In the middle of the month, these factors kept the price at around €42/MWh. When the weather turned colder as the month progressed, demand rose, which in turn pushed up prices from mid-month. In addition, the price was also affected by supply issues: Norway sent more gas to the United Kingdom, which reduced gas supply to Europe. During the same period, one of Norway’s largest LNG plants (Hammerfest LNG plant) experienced a temporary outage, which threatened to further reduce supply and added momentum to price increases. Russia’s confirmation of the termination of gas transit to Ukraine also caused a price increase and reduced supply in Europe. By the end of the year, prices remained at €50/MWh.

The average price of CO₂ emission allowances in December was €68.8 per tonne. The price of emission allowances has been gradually increasing since the beginning of 2024 due to higher demand, economic recovery and a reduction in the number of allowances.