Electricity futures prices for the beginning of the year rose by more than 50 percent in October, driven by the breakage of the Balticconnector pipe and the re-inflamed situation in the Middle East. However, a recent dip in prices has left some analysts questioning whether the electricity price crisis is finally over.
According to Pekka Salomaa, director responsible for the electricity market at Energiateollisuus ry, future prices are not reliable forecasts and only indicate at what price protections are made for that particular moment. He reminds that significant fluctuations in electricity prices are likely to occur in the future. While prices are currently lower than they were last winter or a year ago, they remain higher than before the last few years. The taxable price of stock exchange electricity is expected to reach as high as 96 cents per kilowatt hour on Tuesday.
The electricity supply situation in Finland has improved significantly since last year, but it’s important to note that stock electricity prices have been quite high considering the time of year and temperature in recent weeks. In November, average daily prices on the exchange were over 10 cents on most days, with Thursday 16 November seeing a daily average price of no less than 16.3 cents per kilowatt hour. Prices did not drop significantly even at night when they should have been cheaper.
Salomaa advises consumers against fixed electricity contracts without a consumption effect in the long term as there is a risk premium for energy companies due to uncertainty about customer consumption times. This risk premium must be priced into contracts and can ultimately increase costs for consumers if not carefully considered.