Electricity prices set to rise this winter, industry warns

Finns face higher-than-usual power bills this winter as Nordic hydropower output remains weak and Middle East tensions push European energy markets higher, the head of Finland’s main energy lobby said on Thursday.

Pekka Salomaa, director of the Finnish Energy Industry association, said Nordic water reserves are low and the war in Iran is disrupting gas supplies used to generate electricity across Central Europe. Those factors are lifting forward-price expectations for Finnish wholesale power markets.

“Reservoir levels in the Nordic countries have fallen,” Salomaa said. “That affects prices especially when wind output is low or the weather turns unusually cold.”

Finnish households locked into 12-month fixed-price contracts currently pay about €0.12–0.125 per kilowatt-hour including tax, according to comparison site sähkönhinta.fi, which tracks apartment buildings with annual consumption of 2,000 kWh. Salomaa said a two-year fixed contract is now cheaper than a one-year deal because markets expect higher prices this winter than next.

Fixed-price contracts remain the most popular option, covering roughly one-third of Finnish households, while one-quarter rely on pure spot-price deals. Hybrid contracts and open-ended fixed-price agreements each account for about one-fifth.

Salomaa advised consumers against trying to time the market. “The situation can flip completely if Norway and Sweden see heavy late-summer and early-autumn rainfall or if geopolitical developments ease tensions in the Gulf,” he said.