From Q4 2019 onward the price of electricity has reduced, according to the latest market data from the Public Utilities Commission (SPRK). Prices benefit from warm weather and recovery of water reserves, which allows increasing the power production output at hydroelectric power stations.
Last year’s lowest average monthly electricity price in Nord Pool exchange was found in Latvia’s trade zone – 40.66 EUR/MWh. The price continued to reduce this year – the lowest monthly price so far was registered in February, whereas the lowest weekly price was registered last week (March 15-22). Thanks to the decline of electricity price on the wholesale market, prices have also declined on the retail market, which allowed reducing fees for Latvian residents, SPRK says.
Monthly fees for electricity are affected by not only the price, but also the chosen trade contract. To check the advantages of the chosen offer, consumers are able to compare the price with SPRK’s developed index.
By comparing the prices on receipts and the index it is important to keep in mind that the price calculation usually reflects the price per 1 kWh, whereas the index reflects the price per 1 MWh. This means the price in the index should be divided by 1,000.
According to SPRK latest data for Q4 2019, when compared to the previous quarter the average electricity price for legal persons has declined by 1.94%, whereas the price for households has declined by 1.08%.
Last year, households’ (54.04%) and legal persons’ (59.36%) most popular choice was fixed price contracts. SPRK has observed that the number of consumers who pick flexible price contracts is on a rise. This is especially popular among legal persons.
By adapting consumer prices to fluctuations on the exchange, where usually prices are lower on weekends and late night hours, it is possible to save money. For example, the price was only 1.40 EUR/MWh at night between 03:00 to 04:00 on December 30, 2019.
The price decline is gradually influenced by fixed price contracts, which are usually signed for 12 months. As SPRK had previously predicted – the biggest traders have reviewed fixed price contract conditions, offering lower prices. (BNN/Business World Magazine)
