Electricity prices hit new records in Latvia in December

In December 2021 there were multiple electricity price records observed in Latvia: the average price in the country’s trade region reached 207.40 EUR/MWh, which is 65.4% more when compared to the record observed the month prior and almost five times more when compared to December 2020. Hourly electrical energy price also reached a new record – 1 000.07 EUR/MWh, according to the outlook on Latvia’s electricity market composed by Latvian transmission system operator JSC Augstsprieguma tīkls.
The historic maximum of the hourly electricity price was reached in the morning on 7 December – 1 000.07 EUR/MWh. The average daily price in Baltic States and Finland reached 469.03 EUR/MWh, thereby increasing the average monthly electrical energy price and putting Latvia second after Lithuania’s trade regions where the average price in December was 212.22 EUR/MWh.
This price surge can be explained with increased electricity consumption in Baltic and Scandinavian countries combined with shut-downs of Baltic thermal power plants for repairs in the first half of December, causing a shortage of 1 300 MW.
Read also: Electricity price in Latvia down 55% last week
Generally 2021 concluded with an average electricity price of 88.78 EUR/MWh, which is 2.6 times higher then the average price of 2020. NordPool area reference price rise, when compared to the previous year, was even more considerable – from 10.93 EUR/MWh in 2020 to 62.31 EUR/MWh in 2021.
Imports from EU member states to Baltic States declined slightly when compared to November – by 2%. 935 310 MWh of energy was imported. Imports from third countries decreased by 30%, totalling at 295 988 MWh in December. Compared to 2020 the total volume of imported energy has not changed much. About 70% of energy was imported from EU member states.
It is also worth mentioning that in December there was a new record for gas and prices of CO2 emission quotas – 92.37 EUR/MWh and 80.10 EUR/tCO2. All this had a significant effect on electricity prices. Gas price surge in December exceeded that of December 2020 more than six times, whereas the average price increase in 2021 exceeded that of 2020 four times. The price of CO2 emission quotas increased 2.4 times in 2021 – from 33.51 EUR/tCO2 in January to 80.10 EUR/tCO2 in December.