Electricity prices go up by 20 times due to cold weather

The price of exchange electricity – the spot price of electricity sold on the power exchange – increased to record levels on Friday following the ongoing severe cold weather, according to the Ministry of Economic Affairs and Employment.

Even at its lowest, the hourly changing price of electricity, including the Finnish value added tax, will be more than a euro per kilowatt-hour (kWh) between 6.00 and 21.00 and more than two euros between 15.00 and 20.00, said the ministry in a press release late Thursday night.

The electricity system will continue to function normally. However, consumers, businesses and other electricity users are asked to both save electricity and shift the timing of their electricity consumption.

For clients who have an electricity contract following the spot prices, Friday's electricity bill may be nearly 20 times higher than on an average day.

In Finland, the prolonged cold spell with record low temperatures is at times pushing the peak consumption of electricity to nearly 15,000 megawatts.

Finland supplements its domestic electricity production with imports from Sweden and Estonia.

Bitingly cold weather will continue across the country at least until the weekend. The severity of the current cold wave with temperatures rarely seen in Finland is comparable to the cold winter experienced at the end of 1980s.

Finland’s transmission system operator Fingrid estimates that due to the longer-than-normal cold snap electricity consumption will remain at a high level until the end of the week.

From Sunday, a warmer weather front will ease the situation on the electricity market and ensure that the supply of electricity remains at a good level. Energy-saving measures and demand response, i.e. shifting the timing of electricity use outside peak consumption hours, will also improve the supply of electric power.

The risk of electricity shortage is currently low in Finland. The combined effect of several factors could lead to a shortage of electricity if during a long and severe cold period Finland's own production capacity was insufficient to cover peak consumption hours and at the same time significant disruptions to the generation and imports of electricity were to occur in the transmission system or in power plants.

According to the ministry, Finland is well prepared for electricity shortages. The authorities, the transmission system operator and the distribution system operators have drawn up instructions in advance for dealing with electricity shortages.

As demand for electricity production and consumption increases, Fingrid uses three system status descriptions: electricity shortage is possible, high risk of electricity shortage and electricity shortage.

Should Finland face a shortage of electricity, Fingrid would ask distribution system operators to restrict consumption. The restrictions would affect a limited number of customers for a few hours at a time. Planned power outages would exclude functions vital to society. It is estimated that the restrictions would amount to less than two per cent of Finland's total consumption.