Electricity price skyrockets due to cold weather

Cold weather and lack of wind created a peak in Finnish electricity prices on Wednesday, media reports said.

Business newspaper Talouselama reported that the average price for electricity in Finland was 210 euros per megawatt hour for six hours on Wednesday morning. In neighboring Sweden, the price for the same period was 58 euros per megawatt hour.

The average for the whole Wednesday was 90.22 euros per megawatt hour, while it was 51 euros on Tuesday. The most expensive hour was between 8 and 9 a.m. when the price reached 249.97 euros per megawatt hour.

Finland is part of the Nordic energy market where the power tariff is based on commercial factors. The transfer capacity between Finland and Sweden is restricted and affects the price.

Most households have fixed rate agreements on the purchase of electricity and the price fluctuations have no impact on them. Major users and industries are more affected with market rate changes.

Due to low temperatures in central and southern Finland, quite often below 25 degrees Celsius, the demand increased to over 14,000 megawatt hours for several hours. There was no acute shortage of electricity, however, and none of the reserve capacity power plants were turned on.

Due to the low wind levels, the capacity of wind energy production could not be used. While lakes and rivers are frozen, the production of hydro electricity is also relatively low.

Usually during peak demand, Finland imports electricity mainly from Sweden and Russia.

In the production statistics of 2016, roughly 33 of electricity production in Finland was based on nuclear power, 23 percent on hydro, 10 percent on coal, 16 percent on biomass, 5 percent on natural gas and under 5 percent on wind. The remainder comprises peat, oil and general waste as sources.