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Stock exchange electricity customers face worst-case scenario as power plants go on strike

ByEditor

Feb 13, 2024

This week, the trade unions are holding a political strike that targets, among other things, electricity and heating plants. The impact of the strike can affect the price of electricity and the availability of heat. According to Peter Strandberg, an expert in waterfall electricity market, the middle of the freezing season is not the ideal time for a politically organized strike, as it can result in major difficulties for electricity and heat production.

Strandberg adds a word of relief, saying that the plants will not be shut down in the coming days, but also notes that if the situation takes a U-turn and the plants break down, then it can have significant implications on spot prices. He emphasizes that the Finnish electricity market is currently not very worried about this situation, estimating that the VAT-free spot price of electricity will remain at around 55–70 euros per megawatt hour between Wednesday and Friday.

The trade union’s strikes are 24 hours long and are set to take place between the 14th and 16th of February. The scope of the strike includes a reserve which will be effective on specific dates targeting several power and heating plants.

With the looming news of Olkiluoto 3 going on maintenance break in March, the uncertainty in the political situation affects the electricity market. Strandberg states that the water situation is presently favorable in the Nordic countries, which has led to the stabilization of electricity prices. This also reflects in the prices of fixed-term electricity contracts which have gone down from where they were not long ago.

However, Energy industry CEO, Jukka Leskelä adds that while deliveries of district heating can be ensured to customers during the strike, the significant number of staff affected by strikes may lead to a shutdown in plants. This has sparked concern as Leskelä foresees limited production in power plants of cities affected by the strike.

Lastly, Leskelä states that there are significant risks in the scenario, implying that businesses are playing with things that are out of their control. Particularly, the electricity consumption situation, the production, import, or wind power situation remains unpredictable amidst the strike notices. The incorrect dates in the earlier strike targets set by Sähköliito have been corrected on 13th February 2024.

By Editor

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