The total cost of frequency reserve readiness in Estonia amounted to €74 million last year, remaining close to system operators’ forecasts. With the approval of the Competition Authority (Konkurentsiamet), the cost was exceptionally covered from congestion income and did not directly affect consumers’ electricity bills.
In February, one year will have passed since the synchronization of the Baltic electricity system with the Continental European frequency area and the launch of the related frequency reserve capacity market.
According to Elering Management Board member Erkki Sapp, the new markets launched in February last year ensure the balance of the electricity system after the Baltic states’ electricity systems were disconnected from the Russian system.
“At the launch of the market, prices were high, but as competition increased and volumes grew, they began to decline in the second half of the year,” Sapp said. “Contrary to the criticism at the beginning of the market launch that costs could reach hundreds of millions by the end of the year, the result of €74 million was close to the initial forecast of the Baltic system operators,” said Erkki Sapp.
Balance energy prices also stabilized and converged toward exchange prices in all Baltic states, indicating a reduction in electricity sellers’ costs. This also creates conditions for a decrease in electricity price sales margins.
According to system operators, there is reason to hope that the positive price trend will continue and that the costs of purchasing frequency reserves will decrease further. In the longer term, the goal is to achieve a level of balancing prices in the Baltic states comparable to the price level in the Nordic countries.
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