Eesti Energia forecasting winter price to be lower by half compared with 2022

TALLINN – In a letter sent to customers, the Estonian state-owned energy group Eesti Energia is forecasting a price for this winter that is lower by half compared with last year.

Eesti Energia first highlights that at the beginning of this week, electricity prices record high for 2023 were seen, which were related to two major power failures in Finland. However, the market situation promises to stabilize quickly, and the long-term price forecast will not be affected by this week's price jumps, the company said.

Since electricity prices everywhere in Europe largely depend on the price of gas, fall and winter electricity prices will be formed depending on how Europe copes with gas supply.

Eesti Energia's market analysis strategist Olavi Miller said that the current situation shows that winter energy prices could be lower by almost a half compared with last year. At the same time, he said he cannot promise that there will be no high peak prices. The price of electricity may become more expensive when the price of gas rises during the winter due to high demand and gas-fired power plants have to be put into operation to cover peak consumption, Miller said.

All in all, according to Eesti Energia, it can be concluded that if Europe has a mild winter, electricity prices could also remain in the range of 10-20 cents per kilowatt-hour. However, if gas reserves start to decrease faster than expected due to a cold wave, for example, then the price of gas will start to rise quickly and electricity prices may rise up to 20-30 cents per kilowatt-hour. If demand is very high, the prices may be even higher during peak hours.