While the beginning of autumn felt very much like summer, it is naive to expect this to last. Long-term meteorological forecasts suggest that in October, air temperatures will be up to 0.5°C above average, with precipitation levels up to 5% higher than the long-term norm. It is highly likely that autumn will start behaving more like itself. In the coming months, conditions in the wholesale electricity market will be strongly influenced by renewable generation as well as the global geopolitical situation.

Compared to August, electricity in Estonia's price zone of the Nord Pool electricity exchange became 21.5% cheaper in September, reaching €84.15/MWh.

On the evening of 3rd September, the hourly wholesale electricity price surged to as much as €500.9/MWh. Just a week later, on 9th September, the average daily price dropped to just €4.8/MWh.

This sharp price spike at the start of the month was caused by a drop in wind generation, while electricity demand remained high. Renewable power plants were unable to meet energy demand, necessitating coverage from more expensive thermal power plants and electricity imports. On average, electricity generated by solar and wind cost €73/MWh, whereas electricity from thermal power plants averaged €118/MWh.

Local wind and solar generation reached 173 GWh of green energy in September. For comparison, national electricity consumption amounted to 530 GWh.

On 4th September, after a long hiatus, the EstLink 2 interconnection resumed operation, which immediately enabled a 44% increase in imports of cheaper electricity from Finland to the Baltic States.

The average electricity price in other Baltic countries remained similar, around €84/MWh. There were, however, some significant price spikes during the month. These were influenced by planned maintenance works at Finland’s Loviisa nuclear reactor and in Estonia’s transmission networks.

Electricity prices were not only driven by demand and renewable generation but also by factors affecting energy infrastructure. Finland experienced the shutdown of the Olkiluoto-2 nuclear reactor due to a malfunction.

At the Netherlands’ TTF trading point, the average natural gas price was €36/MWh. Futures contracts indicate that prices for the upcoming winter are expected to hover around €36–€38/MWh.

Tensions in Ukraine and the Middle East persist, and these geopolitical factors could negatively impact energy resource markets and introduce unexpected volatility.

The price of CO2 emission allowances in September settled at €67/tonne. Futures contracts suggest that prices will continue fluctuating around €63/tonne for the remainder of the year.

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Karl Joosep Randveer, Energy Trading Analyst at Eesti Energia

The market overview has been compiled by Eesti Energia according to the best current knowledge. The information provided is based on public information. The market overview is presented as informative material and not as a promise, proposal or official forecast by Eesti Energia. Due to rapid changes in the regulation of the electricity market, the market overview or the information contained in it is not final and may not correspond to future situations. Eesti Energia is not liable for any costs or damages that may arise in connection with the use of the information provided.