Electricity futures prices for the beginning of the year have seen a more than 50 percent increase in October. The reasons behind this have been attributed to the breakdown of the Balticconnector pipe and the re-inflamed situation in the Middle East. On November 16th, when trading was almost 9.5 cents for January-March, we visited and found it trading at just under seven cents for the same time period.
According to Energiateollisuus ry’s director responsible for the electricity market Pekka Salomaa, future prices are not reliable forecasts as they only indicate at what price protections are made for that particular moment. He reminds us that significant fluctuations in electricity prices will still occur in the future. Despite a lower price compared to last winter or a year ago, electricity prices are still higher than before the last few years. The taxable price of stock exchange electricity is expected to reach 96 cents per kilowatt hour on Tuesday, according to updated hourly prices on Monday.
In recent weeks, the price of stock electricity has been relatively high despite being during a colder time of year and lower temperatures compared to other months. In fact, during the third week of November (November 11-17), average daily prices were over 10 cents per kilowatt hour on most days with a daily average price as high as 16.3 cents on Thursday November 16th. Even at night when it is usually much cheaper, exchange electricity did not drop significantly in price.
Salomaa suggests that consumers consider fixed electricity contracts without consumption effects as they may not be beneficial in the long run due to a risk premium added by electricity companies because they cannot accurately predict when customers consume their electricity.