When electricity prices have reached several hundred euros per megawatt-hour (MWh) already, the Baltic States’ power plants – especially gas-fired plants – should be online as well, former Eesti Energia CEO and former Nord Pool Baltic and Russian region chief Hando Sutter has said.
Commenting on the price of electricity, Sutter acknowledged that it was indeed very expensive: expensive in absolute terms as well as expensive for summer.
“The fact that it’s been up to five times more expensive than in Finland in August is catastrophic,” he said. “We all talk here about the competitiveness of the Estonian economy – it’s very hard to compete when such a critical input as electricity is five times cheaper in the neighboring market.”
According to the energy expert, it’s a bit too simplistic to just say that the Estlink 2 power connection linking Estonia and Finland is broken and that once it’s fixed, things will get better.
“We still have to think about why we can’t produce electricity here at a reasonable price,” he stressed. “One thing is that we produce too little renewable energy compared with the Nordic countries. Another thing is that when the price of electricity is already several hundred euros per MWh, then the power plants that we do have here in the Baltics should be operating. Why they aren’t operating is something that I think the Competition Authority and their colleagues in Latvia and Lithuania should actually look into a bit, and clarify whether these plants should be on the market at such prices. I’m talking first and foremost here about gas-fired power plants.”
Sutter supports the idea that gas-fired power plants should be on the market under such conditions.
“I dare say that the cost price of gas-fired power plants, even in condensing or without heat generation mode, is much cheaper, and the simple logic here is that if the market price is higher than the cost price, then these electricity producers should be on the market,” he said.
“It’s the regulator’s job to look at whether these producers should be,” he continued. “And if it turns out that they should have been on the market, then this needs to be addressed, because the damages since May, in terms of the competitiveness of Estonia’s industries and the additional costs for each electricity consumer, amount to tens of millions.”
There are energy producers in the Baltic States that own various production capacities – based on both fossil fuels and renewable energy sources.
Electricity prices in Estonia and the rest of the Baltic States have been high throughout summer. On August 30, the average price of electricity on the power exchange in Estonia was 15.94 cents per kilowatt-hour (kWh) and peaked at 44.99 cents per kWh between 8-9 p.m. (ERR)