Latvia hit energy price records in 2021

Energy price records have been hit and exceeded in December, according to the Latvian transmission system operator AS "High Voltage Network" said January 5.

The average electricity price in Latvia's trading area reached EUR 207.40 per megawatt-hour (MWh), which is 65.4% above the previous month's record and is almost five times higher than in December 2020.

The historic peak in the price of the electricity hour rate was reached on the morning of December 7 at 8:00–9:00 EET and was EUR 1000.07 MWh, while the average daily price in the Baltic States and Finland amounted to EUR 469.03 MWh.

Thus, the average monthly electricity price also increased significantly, ranking Latvia in second place immediately after the Lithuanian trading area, where the average monthly price of December was EUR 212.22 MWh.

Such a price jump was explained by the “High Voltage Network” by the increase in electricity consumption caused by the cold weather in the Baltic and Scandinavian countries, combined with the major Baltic thermal power stations due to repairs in the first half of December, resulting in a capacity shortage of 1300 MW.

Overall, 2021 ended at an average electricity price of  EUR 88.78 MWh, 2.6 times the average price of 2020. The increase in the reference price of the Nordpool zone system compared to last year was even more significant, from EUR 10.93 MWh in 2020 to EUR 62.31 MWh in 2021.

Compared to November, imports from the countries of the European Union to the Baltic have decreased slightly – by 2% or by 935 310 MWh of electricity imported. Similarly, imports from third countries decreased by 30% - a total of 295 988 MWh imported in December. Compared to the previous year, total electricity imports have not changed significantly.

The rise in the price of gas in December has been more than six times that compared with December of the previous year but the average increase in the price of gas in 2021 is four times as much as the previous one.

Meanwhile, the price of CO2 emissions allowances increased 2.4 times this year, from EUR 33.51 per tCO2 in January to EUR 80.10 per tCO2 in December.

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