Some households’ electric rates have risen incrementally this summer, but overall prices remain low compared to long-term averages. Experts attribute this to an array of factors.
The price of electricity has edged up slightly in Finland since mid-June after low prices in April and May.
“This summer the price of electricity has been slightly higher, but it doesn’t appear to be changing radically,” says Antti Paananen, markets director at the Energy Authority.
For instance Savon Voima, a utility in eastern Finland, raised its rates by an average of 9.4 percent in early July.
“In making price decisions, we react to changes in wholesale prices. The July rate hike was a result of a weak situation in hydropower production in the Nordic region and a rise in the cost of carbon and emissions allowances, explains Savon Voima CEO Juha Keski-Karhu.
Wind power fans price drop
The price of electricity has however remained historically low for several years. There are several reasons for this including the economic downturn, lower-than-expected demand, generally solid conditions for hydropower production in the Nordics and low fuel prices.
The proliferation of renewable energy is also playing a key role. In particular, wind power generation in Sweden and elsewhere in Europe has pushed overall electricity fees down.
“Wind power has fundamentally changed the situation and lowered prices,” says Heikki Rantamäki of the Pohjois-Karjalan Sähkö utility. “When there’s a lot of wind power produced in Germany, for instance, that is also reflected here in Finland.”
Energy experts do not foresee any major price rises on the horizon.
“The forecasts for the next several years show prices remaining around the same level. The situation looks as if it will remain basically unchanged, although of course something can always happen,” says Pekka Salomaa, director of the Finnish Energy Industries association.
Related stories from around the North:
Canada: Energy challenges in Canada’s North, Eye on the Arctic
Finland: Helsinki City Council to close coal plant, Yle News
Norway: Focus on green energy in the Arctic, The Independent Barents Observer
Russia: No alternative to Arctic oil says Russia environment minister, Barents Observer
Sweden: Sweden to have 100 percent renewable energy by 2040, Radio Sweden
United States: New Alaska rules may help renewable energy projects, Alaska Public Radio Network