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Expect low electricity prices in spring and summer.

Byeditor

Apr 2, 2024

In May of last year, the price of electricity dropped close to zero or even below zero on many days. This trend was influenced by the weather patterns during spring and summer. Users of exchange electricity may soon be able to predict the best times of the year to capitalize on low prices, if the market repeats the same phenomenon as last spring.

The reason for the low electricity prices in May of last year was due to spring floods, which caused hydroelectric plants to produce excess electricity at a loss. The combination of flooding rivers, sunny weather, and strong winds led to more electricity being generated than consumed, driving prices down. While floods are already occurring in Southern Finland, the major hydropower plants in the north typically experience flooding in May.

The fluctuation in electricity prices is also influenced by other factors such as maintenance at nuclear power plants, strikes in industries that reduce electricity demand, and weather conditions impacting renewable energy production. Despite fears that maintenance at the Olkiluoto nuclear power plant would raise electricity prices, prices have remained relatively low.

Futures in the electricity market are a good indicator of price trends, with Nordic regional price futures for the second and third quarters of the year decreasing last week. Fixed-term contracts for electricity have also become more popular, with short contracts of only three months available at competitive prices. The price of electricity can vary greatly in the spring, depending on factors like floods, weather conditions, and changes in energy infrastructure.

Overall, the electricity market in Finland is experiencing price reductions, with the Estlink2 connection between Finland and Estonia being cut for the summer, leading to lower regional prices. Despite the variability in electricity prices, market analysis suggests that prices will continue to decrease in the coming months.

By editor

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