Electricity spot prices remained low on Sunday after falling to zero for most of Saturday. The cost hovered below 0.2 cents per kilowatt hour (KWh) until around 4pm.
The price stayed below two cents per kilowatt-hour until around 7pm, when it rose to around three and a half cents for about an hour.
That is still far lower than prices seen earlier in the week. On Friday evening, the spot price peaked at more than 18 cents.
The price plunged on Saturday. Spot electricity was virtually free until Saturday afternoon and again in the early hours of Sunday. That was largely due to plentiful supply of wind power amid breezy, gusty conditions.
"Most of the volatility in the past days is due to wind power variations: there have been days with abundant wind generation and some low-wind days," Fingrid’s Market Solutions Manager, Maarit Uusitalo, told Yle News.
"Wind power generation has varied between around 6000 MW and even as low as a couple of hundred megawatts. Consumption this past week varied between around 10,000-12,000 MW, so that gives you a picture of the effect of the variation in wind generation," she said.
Gusts exceeding 21 meters per second were measured in Hämeenlinna, at coastal stations in Ostrobothnia, and in Sipoo and Porvoo on the Gulf of Finland, according to meteorologist Jari Tuovinen of the Finnish Meteorological Institute (FMI).
"Naturally, when the temperature goes down the demand for electricity grows," Uusitalo pointed out, noting that there were some cold temperatures last week, and more on the way in the next few days.
"Volatility in spot-prices is something that is due to the new system with large amount of renewable weather-dependent production. However, looking at the mean price of electricity, Finland was the third-cheapest in Europe last year," she added.
Heidi Paalatie, Director of Operations at Renewables Finland, noted that solar is also becoming a factor.
"Along with wind, there was also a good amount of solar power available during the weekend, considering its capacity. During low-wind periods, we get a glimpse of what electricity prices would be like constantly if we didn't have wind power at all," she pointed out.
Free electricity will be rarer
In the longer term, zero-to-negative spot prices are becoming a thing of the past.
This is partly because municipalities are using more electricity to produce district heating than ever. Large, electric boilers are used to heat water for the district heating network instead of burning wood chips, for example.
The number and capacity of municipal electric boilers has increased rapidly.
“This has been clearly visible in electricity consumption this winter,” says Santeri Viljakainen, portfolio manager at electricity service company Väre.
According to Viljakainen, district heating companies switch from combustion to electricity when electricity spot prices drop, which now has a significant impact on the electricity market.
Viljakainen predicts that the increase in solar energy, especially come spring, may pull prices down, but at the same time, more use of batteries and flexible energy consumption will apply upward price pressure.
Another factor affecting pricing for solar, wind and hydropower producers has changed, with a decrease in bonuses paid for green electricity over the past couple of years. As a result, it is no longer financially worthwhile to operate wind turbines when prices drop into negative territory. The subsequent cutback in wind power productions then slows the decline in prices.
Turn on that sauna
Heli Satuli, head of communications at Swedish-owned power utility Vattenfall, predicts that Finland’s electricity market will become even more volatile due to more investments in wind power and its growing share of electricity production.
"We’ll see more frequent instances of overproduction during windy weather, leading to negative prices. Conversely, electricity prices can spike significantly when there is no wind, cheap electricity can’t be transferred from other Nordic countries, a nuclear power plant is out for maintenance or there is a poor hydrological balance," she said.
"However, these high spot prices are short-lived and part of a renewable energy-based electricity market. Fluctuating spot prices have become the new normal, and Finns have learned to actively take advantage of cheap electricity hours," she added.
When the spot electricity price drops close to zero, household consumption increases as electric cars are plugged in to charge, electric saunas heated and laundry and washing machines switched on, for example.
Mild winter brings lower heating costs
This past week has been a relatively expensive time for electricity compared to the earlier part of the year. On many days, the price per KWh has broken the 30-cent mark.
Overall, this winter's prices reflect the fact that the weather has been mild.
A year ago, the average taxable price in January was over 13 cents per KWh, while this year the price was about half that. This February was slightly cheaper than a year earlier.
Futures indicate that prices will continue to fall. Next month, the average taxable price is forecast to be around five cents per KWh. In May, the price will likely fall to the year’s lowest level, averaging well below three cents.
Europe’s biggest reactor offline for 2 months – at least
Wind power is likely to make up for the fact that the country’s single largest energy source will be offline.
"Olkiluoto 3 (OL3) is out for maintenance, so there is quite an amount of production that is not available," said Uusitalo.
Europe’s largest nuclear reactor closed for maintenance on 1 March. It is scheduled to come back online in early May after a 63-day hiatus. However last spring the unit’s scheduled annual maintenance dragged on for five weeks longer than expected, pushing electricity prices up.
Plant operator TVO said that maintenance activities have proceeded on schedule despite a significant mishap. Last week the company reported that on 7 March, radioactive coolant leaked into some of the reactor’s containment chambers as a result of a human error.
“The incident did not pose any risk to the personnel, the environment or nuclear safety,” TVO said on Monday.
Last year, nuclear power accounted for nearly 38 percent of all electricity consumed in Finland, making it the country's biggest electricity generator. Wind power produced a quarter of all electricity while hydropower chipped in 18 percent.
Solar is still a relatively small – but growing – factor in the Finnish electricity mix.
"In the spring, and more so in the summer, we can also see the so-called ‘duck curve,’ where we can feel the effect of solar generation in the middle of the day," said Uusitalo.
Finland's electricity production is nearly fossil-free. Last year, 95 percent of Finland's electricity came from clean energy sources.
17 March: Updated with Uusitalo, Paalatie and Satuli comments, other details.
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