Price of electricity goes up

The exchange price of electricity rose clearly in the first quarter of the year, which was also reflected in the end user prices of electricity, according to Statistics Finland's data.

Tax increases at the beginning of the year raised the prices of some fuels but no clear development trend could be detected for fuels.

In March, the price of motor gasoline was two per cent lower than in the corresponding period last year. The price of diesel fuel remained almost unchanged. The corresponding change for light fuel oil was a five per cent rise that was affected by the tax increases at the beginning of the year. The taxes remained unchanged for motor gasoline and diesel fuel.

The tax-free price of hard coal went down and was 12 per cent lower in March than one year earlier. The tax-free price of natural gas, in turn, rose by 11 per cent. In Finland, the fuels for electricity production are tax-free while excise duty is paid on fuels used in heat production.

The taxes for both hard coal and natural gas were raised at the beginning of the year. For hard coal, the taxable price was one per cent higher than one year earlier. The corresponding rise in the price of natural gas considering the tax increase was nine per cent. The prices of forest chippings and milled peat used in electricity and heat production decreased by one per cent in the first quarter compared with the corresponding period of the year before.

Customer prices for district heat for detached houses were nearly the same in January as one year earlier. For terraced houses and blocks of flats, the prices increased by one per cent. The consumer price of wood pellets has declined by two per cent from February 2017 to February 2018.

The system price of the Nordic electricity exchange derived from the sell and buy bids on the exchange made a clear upturn at the beginning of the year. This was affected by a rise in the exchange price of carbon monoxide emission rights and the clearly colder February and March than average. In March 2018, the average of the system price was 43 per cent higher than one year previously. Due to electricity transmission restrictions, the Finnish area price was, on average, five per cent higher in March than the system price, rising by 49 per cent from one year ago.

In March, the electricity prices for households rose by one to two per cent depending on the consumption category compared to March 2017. For enterprise and corporate customers, the prices of electricity rose by 3 to 17 per cent except for one consumption category, where the price fell by one per cent. Household customers’ electricity prices are based on the obligation to deliver prices published by the Energy Authority, while the price of enterprise and corporate customers are based on Statistics Finland's price inquiry on electrical energy. The obligation to deliver price reacts slowly to changes in electricity prices on the Nordic electricity exchange.