If wind farm development in Latvia does not catch up to the levels of Lithuania and Estonia, differences in electricity prices between the Baltic states on the “Nord Pool” exchange could increase in the future, warns Ingus Štūlbergs, Head of the Forecasting and Financial Products Division at Latvenergo, in the company’s Electricity Market Review.
He emphasizes that a cornerstone of economic growth is the ability to meet demand with the required volume of electricity at the most competitive price. Although the existing installed wind capacity in the Baltics is already having an impact on average Nord Pool market prices, the region still remains in an electricity production deficit.
In previous decades, electricity production in Europe and the Baltics was largely provided by fossil fuel power plants. However, as technology advances, renewable energy sources like wind and solar—combined with electricity storage systems—are gradually replacing them. These sources are not dependent on the fluctuating prices of fuel resources. Štūlbergs notes that although electricity from renewables doesn’t come from paid fuel, it still has value, since investments are required for the construction and maintenance of such stations.
For part of the year, electricity demand can be met by wind-generated power. This share can be increased further by utilizing electricity storage technologies, which in turn creates opportunities for economic growth.
Štūlbergs explains that in neighboring countries connected to the Baltics—such as Sweden, Finland, and Poland—wind farm development in recent years has proceeded at a moderate pace, with varying conditions and challenges for project approval and investment attraction.
According to system operator data, in the first half of 2025, Lithuania will have the highest installed wind power capacity in the Baltics—1,683 megawatts (MW)—a 23% increase compared to 2024. It is followed by Estonia with 682 MW and a 34% increase. In contrast, Latvia’s installed wind capacity in 2025 remains at 136 MW, unchanged from 2024.
“If this uneven pace of wind farm development among the Baltic states continues, it could result in a situation where electricity price differences between Latvia and its neighbors on the Nord Pool exchange increase,” Štūlbergs warns. “This is tied to interconnection capacity. For example, if large amounts of wind energy are generated in Lithuania and Estonia but cannot be imported into Latvia, Latvia could face periods of higher electricity prices compared to neighboring countries.”
He points out that even with the current installed wind capacity in the Baltics, the impact on average Nord Pool market prices is already observable. However, the region still operates in an electricity deficit—meaning some of the required electricity must be imported annually, leaving countries dependent on interconnection availability and overall energy market trends.
The Latvenergo representative notes that the long-term development of wind farms and other forms of renewable electricity production, including energy storage systems, will enable more predictable and stable electricity prices for end consumers. This, in turn, can encourage investment among electricity consumers—fostering electrification, new production facilities, and faster development of existing ones.