Electricity prices in Finland return to normal levels in 2023, down 64% from previous year

By admin On Jan 3, 2024

Plugs. LEHTIKUVA

Finland witnessed a significant decrease in electricity prices in 2023, with the average cost falling back to pre-crisis levels. According to Nord Pool’s annual price data, the average wholesale electricity price stood at €56.5 per megawatt-hour. This marks a 64% reduction from the crisis peak in 2022 and a return to the average price levels seen since 2010, adjusting for inflation.

The increase in wind power capacity and the operational start of the Olkiluoto 3 nuclear power plant have played a pivotal role in making Finland self-sufficient in electricity since spring. Despite this stabilization, short-term price fluctuations have been greater than before, primarily due to the growing share of wind power in the energy mix.

Interestingly, 2023 saw a record number of hours with negative electricity prices, totaling 467 hours. The most expensive day for electricity was November 21, with an average daily price nearing €300 per megawatt-hour. Conversely, due to incorrect data provided by a Norwegian company, prices dropped significantly three days later, reaching more than €200 below zero.

Monthly price variations throughout the year indicate a transition from the crisis to a more stable market. For instance, in March, the cost per megawatt-hour was €74, while pre-crisis prices typically ranged from just over €20 to under €50. By May, the average price had dropped below €30. July and September also saw lower prices, with December being the most expensive month, averaging around €76 per megawatt-hour.

Pekka Salomaa, Director of Energy Markets at Energiateollisuus ry, highlights the significant changes in the Finnish electricity system. “The growth in wind power has been the most critical factor influencing these price variations,” Salomaa explains.

Alongside these fluctuations, a survey conducted by Taloustutkimus indicates a substantial increase in the number of market-linked electricity contracts, which are estimated to have doubled to about 30% of all agreements. Official figures from the Energy Authority are expected next summer.

Salomaa notes that the evolving electricity market rewards vigilant consumers. “Flexible market electricity customers benefit from these fluctuations by monitoring hourly prices and timing their consumption accordingly. This not only benefits them but also helps stabilize the market by smoothing out the highest and lowest prices,” he adds.

This shift towards a more dynamic and responsive electricity market in Finland is seen as a positive step towards a more sustainable and economically viable energy future.

Source: www.helsinkitimes.fi