Energy
AI
Estonian Power Prices Surge as Gas Costs and Cold Weather Collide
Estonian electricity prices are set to remain between €150 and €200 per megawatt-hour as a two-year high in gas prices allows fossil fuel plants to dictate costs across the Baltic states amid a cold, windless spell.
- —Electricity prices in Estonia are expected to remain high in the coming days, ranging from €150 to €200 per megawatt-hour, due to continued cold and windless weather.
- —The high prices are largely driven by increased gas prices, which have reached a two-year high, and the operation of gas-fired power plants that are setting the electricity prices across the Baltic states.
- —Oil shale power plants are contributing significantly to Estonia's electricity production during this period, with solar and wind power having a smaller market share due to current weather conditions.
- —While prices may exceed €400 in the short term, they are expected to fall to around €100 in the mornings and at night, with battery storage seen as a potential solution for price stabilization.
- —Improved conditions and lower prices are anticipated from March onwards as solar production increases with better weather.
Recap
The price surge in Estonia reveals the Baltic energy market's acute vulnerability to volatile global gas prices and adverse weather. Despite renewable energy investments, the region's reliance on fossil fuels for grid stability during winter peak demand remains a critical economic liability. The situation underscores that emerging solutions like battery storage, which could stabilize the grid, are still years from widespread market deployment.