Latvenergo: electricity price has declined 30% in the past three years
Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.
According to the company’s representative, electricity prices in Latvia have come very close to prices found in Scandinavia. From now on, electricity prices in Latvia will be affected by factors in Scandinavia. Electricity prices in Latvia declined in 2017, continuing the trend established by previous years. The price decline was mainly due to the opening of a new connection in the region, which allowed Latvia to join Scandinavia’s electricity market and contributed to price equalization in the region, Latvenergo explains. The last of the connections – NortBalt cable connecting Lithuania with Sweden – was opened in spring 2016. This cable ensures prices are more equal and competitive with prices in Finland, with which Baltic States are connected the most closely. Latvenergo Electricity Sales Director Uldis Mucinieks: «Equalization of prices with Scandinavia improves Latvia’s competitiveness. While in 2015 the difference between electricity prices in Finland and Latvia was approximately 40%, it has since declined to 5%. This is why it will have a positive effect on Latvia’s national economy, increasing the competitiveness of energy-intensive companies.»
He also emphasizes that trends left from previous years can create a wrong impression – that electricity prices decline every year, and that this should continue. «The trend observed throughout 2014 – 2017 period was ensured by the development of mutual connections, improving the equalization of prices with countries of the Scandinavian region. Now that an appropriate level has been reached, we have to keep in mind that price dynamics in Latvia can vary year to year,» Mucinieks continues. The experts said this is demonstrated well by the example set by Estonia – the country already had close connectivity with Finland before 2014. «While in Latvia we have gotten used to seeing annual price reductions, 2017 for Estonia turned out the second year with growing electricity prices. This demonstrated that the exchange there has a dynamic character and that it can experience growth and decline, which is something consumers should keep in mind,» explains Mucinieks.