Electricity futures prices for the beginning of the year rose by more than 50 percent in October. The reason has been considered to be the breakage of the Balticconnector pipe, but especially the re-inflamed situation in the Middle East. When the electricity futures price for January-March was almost 9.5 cents in mid-October, we visited on November 16. for the same time period, trading at just under seven cents.
According to Energiateollisuus ry’s director responsible for the electricity market Pekka Salomaa, future prices are not reliable forecasts as they only tell you at what price protections are made for that particular moment. However, he notes that there will still be significant fluctuations in electricity prices in the future and that they will likely remain higher than before the last few years. He also reminds us that despite recent fluctuations, Finland’s electricity supply situation is now clearly better than a year ago.
In recent weeks, the price of stock electricity has been quite high considering the time of year and temperature. During the third week of November (November 11-17), the average price of electricity on exchange was more than 10 cents per kilowatt hour on most days with a daily average price of no less than 16.3 cents on Thursday 16th November. The price of exchange electricity did not drop significantly even at night when it is usually much cheaper due to lower demand.
Salomaa advises consumers to be wary of fixed electricity contracts without a consumption effect as there is a risk premium for energy companies in these contracts because they cannot predict when customers consume their energy usage accurately. This risk premium must be factored into these contracts when making purchasing decisions to ensure long term affordability and stability in pricing arrangements with energy providers.
Overall, while fluctuations may still occur, it seems like Finland’s energy market is stabilizing and becoming more transparent due to increased competition from renewable sources such as wind and solar power generation plants which have become more efficient over time.
The fear effect has now completely melted away from electricity futures prices,” says Salomaa.
Is it finally over? According to Salomaa, there will still be significant fluctuations in electricity prices in