Nordic and European electricity prices will level off, the company’s senior trade analyst Rodika Prokhorova points out in the market review of Latvenergo AS.
She says that the NordLink submarine interconnection between Germany and Norway, commissioned by the German and Norwegian electricity transmission system operators TenneT and Statnett, enables the Baltic region to receive cheaper electricity from the Nordic countries.
Prokhorov explains that other leading European countries, such as Germany and the United Kingdom, are also currently actively working on building an interconnection network, including with the Nordic countries, in order to achieve closer market integration and, as a result, equalize prices between regions.
The first direct interconnection between Norway and Germany – Nordlink – has already started operating this year. By connecting the Norwegian and German energy markets, security of supply and stable energy prices will be achieved, while increasing the share of renewable energy sources, ”says Prokhorova.
She notes that in September this year, the longest underwater interconnection in the world – “North Sea Link”, which will connect Norway and Great Britain, is planned to start operating.
“Both Germany and the United Kingdom aim to benefit from Norway’s vast hydropower resources to help balance their intermittent wind energy, while Norway can import cheap surplus renewable energy to save water in its hydropower plants. This means that the development of electricity prices in the Nord Pool region, as well as in the Baltics, will also be determined by events in Germany and the United Kingdom, which will promote higher competitiveness and more even prices, ”says Latvenergo’s senior trade analyst.
As reported, in July, the average price of electricity for the Latvian system of the Nord Pool exchange in July was 88.32 euros per megawatt hour (MWh), which is 2.8 times more than in July last year.
Latvenergo is engaged in the production and sale of electricity and heat, as well as in the sale of natural gas and the provision of electricity distribution services. Latvenergo bonds are listed on the Nasdaq Riga debt securities list.
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