Compared to July, electricity prices in Estonia were up 9.1%, reaching 106.95 EUR/MWh. Compared to last August, prices are up 13.3%. August was mainly impacted by windy weather in neighboring countries, leading to lower electricity prices in the first 10 days. For example, on August 10-11, electricity was free or even had negative prices for up to 19 hours, with buyers receiving up to 10 EUR/MWh. As calmer weather set in, the loss of wind energy was partially offset by a slight recovery in solar power production. Highly efficient wind generation occurred again only on August 25, when low electricity demand and productive generation led to negative prices for 12 hours. In August, wind energy production cost 96.6 EUR/MWh, solar 77.30 EUR/MWh.

Due to the missing Estlink 2 connection however, prices still remained higher as renewables production was not enough to fulfill the demand throughout August. The coming autumn seems to be more of a calendar change for now, as the weather is still reminiscent of summer. Long-term forecasts indicate that September will be hotter and drier than the long-term average. If these predictions come true, electricity prices are expected to remain at similar levels. However, as daylight hours inevitably shorten, electricity demand will naturally increase. The closer we get to the heating season the faster electricity prices will rise.

The increase in electricity prices was also influenced by the ongoing repair of the crucial Estlink 2 energy link between Estonia and Finland, which brings cheaper energy from Scandinavia to the Baltics. According to Eesti Energia’s in-house models, the price impact of the Estlink 2 outage in August lead the price to b e up to 45 EUR/MWh higher as cheaper Nordic electricity flows were barred due to the 650MW connection missing. Estlink-2 returned into full operation on 6th of September. Since then we have seen a significant decrease in electricity price difference between Estonia and Finland.

On average, up until August, power imports from Finland were down 61% throughout the year, with the highest difference coming in March, where imports were down 73% compared to last year. Due to this, imports from Latvia skyrocketed, with peak import months seeing close to a 40-fold increase. With Estlink being reestablished, this trend is expected to diminsh.

Compared to 2023, solar production during summertime in Estonia was on average 43% higher. This has come due to more sun this summer and additional installed solar capacities in Estonia. High solar production has been one of the key reasons for “zero days” in Estonia during summertime. On average, solar production has been up nearly 40% this year. Wind production has remained higher, however not as much as solar: January and April saw 40% production spikes compared to last year, the rest has remained stable. Wind production has been up 11% compared to last year on average. A total of 323 GWh was produced domestically, the demand for August was at 548 GWh.

In August, the average price of natural gas at the Dutch TTF trading hub was 38.30 EUR/MWh. Futures contracts indicate that the price of these resources will exceed 39 EUR/MWh in November and 41 EUR/MWh in January next year. In the coming months, natural gas prices will depend primarily on how smoothly storage facilities in Europe can be filled. However, last winter demonstrated that Europe is no longer dependent on Russian resources. The higher production costs of energy from thermal power plants were also influenced by CO₂ emission allowance prices, which in August fluctuated around 71.30 EUR/ton. According to futures contracts, these prices are expected to hover around 70 EUR/ton in the fall.