Electricity prices set to rise sharply in autumn

Electricity prices are expected to rise significantly this autumn, with tax-free prices potentially exceeding nine cents per kilowatt-hour in September, Yle reports.

Futures prices indicate the expected price level for the coming months. Pekka Salomaa, a director at Energiateollisuus, said on Yle’s morning programme that the coming autumn would be considerably more expensive than the previous one.

Futures prices have risen in the Nordic countries partly because water reserves have weakened and the conflict in the Middle East has affected the market. Annual maintenance at nuclear power plants, including Olkiluoto 3 and Loviisa 2, will also reduce electricity supply in the autumn and push prices higher.

When choosing an electricity contract, consumers should consider how much electricity their property uses, said Veli-Matti Virtanen, an expert at Motiva, a sustainable development company.

Those who can shift their electricity use to cheaper hours may benefit from a spot-price contract and pay less than the average market price. For consumers who cannot or do not want to adjust their usage, a fixed-price contract can provide more certainty, Virtanen said.

Cheap spot-price hours can be used, for example, to operate underfloor heating at night and store heat for the following day. Salomaa said a spot-price contract may also suit households that use electricity for heating and other domestic tasks as well as charging an electric car.

Regardless of the contract type, households should reduce their energy use. Lowering the indoor temperature by one degree can reduce energy consumption by five per cent, Virtanen said.

Before the heating season begins, households should also check their ventilation, the seals around windows and doors, and radiator thermostats.

Salomaa said autumn and winter prices were still nowhere near the levels seen at the beginning of Russia’s war of aggression in 2022. Spot-market electricity cost an average of about 15.4 cents per kilowatt-hour that year.

Although the price increase may appear dramatic, futures prices for winter electricity do not yet indicate a particularly significant rise, Salomaa said. The situation could still change.