The sharp rise in electricity prices across Europe in early November was mainly driven by higher natural gas prices resulting from the conflict in Iran, as well as increased electricity demand and lower renewable energy generation, according to Gatis Junghāns, a board member of Latvia’s electricity transmission system operator Augstsprieguma tīkls (AST).
During the first five days of November, the average wholesale electricity price in Latvia reached 255 euros per megawatt-hour (MWh), more than double the average price recorded in October.
Junghāns explained that electricity prices rose sharply across Europe in the first days of November.
The increase was primarily caused by rising natural gas prices on international markets due to the conflict in Iran, which pushed up electricity generation costs at thermal power plants.
As colder weather sets in, these plants are increasingly needed to meet growing electricity demand and compensate for declining renewable energy generation.
“Latvia’s largest natural gas-fired power plant, Riga TEC-2, also resumed operations at the end of October.
While solar and wind power plants generated 40% of the electricity consumed in the Baltic region in October, their contribution has fallen to just 20% so far in November,” Junghāns said.
He added that the Baltic states have so far imported approximately one-third of their electricity needs from the Scandinavian market in November, where electricity prices are lower, particularly in Finland.
However, Junghāns explained that the capacity of electricity interconnections is insufficient to fully replace expensive thermal power generation.
As previously reported, the AST Group’s turnover last year reached 355.824 million euros, an increase of 37.6% compared with 2024, while its profit rose by 29% to 29.252 million euros.
The parent company’s turnover increased by 72.7% to 266.008 million euros, while its profit grew by 32.1% to 19.496 million euros.
AST is Latvia’s independent electricity transmission system operator. The company is state-owned, and its bonds are listed on the Nasdaq Riga debt securities market.
“This once again demonstrates how urgently the Baltic region needs additional competitive renewable energy generation capacity,” Junghāns emphasised.
According to information published on the Nord Pool electricity exchange website, the average electricity price in Latvia’s bidding zone was 233 euros per MWh on the 1st of November, 347.29 euros per MWh on the 2nd of November, 308 euros per MWh on the 3rd of November and 280.21 euros per MWh on the 4th of November.