Are there currently grounds for concern about rising electricity prices? The director of the Energy Market Department of the Ministry of Climate and Energy (MCE), Gunars Valdmanis, stated on TV24 that the MCE does not see any real grounds for such concern, reports nra.
Considering the wholesale market statistics for this year, contrary to fears that prices might rise slightly after our disconnection from the Russian energy grid, we have actually observed a decrease in the average wholesale price, albeit by a small but still pleasant percentage — approximately two, emphasized the director of the Energy Market Department of the Ministry of Climate and Energy (MCE), Gunars Valdmanis.
"The year is not over yet, and we cannot fully summarize the overall statistics, but in general, this trend is positive, so I would like to reassure the public: at the moment, there are no sustainable reasons for price increases. They could only arise in the case of some extraordinary geopolitical events or abnormal shocks caused by weather conditions," Valdmanis explained.
What factors determine the price pressure? In our region, the most significant factors are air temperature — how cold it is, as a decrease in temperature in Scandinavian countries sharply increases consumption, and along with it, prices, and in some cases, if the winter is particularly harsh, production decreases as well. This is the most significant factor.
Secondly, what affects our region the most is both short-term fluctuations and the availability of solar and wind energy. We would like to have competitive resources available to us in winter, just as we do in summer. Currently, there is no other technology that has such a strong influence on price reduction as wind energy, noted Valdmanis.
In the Nordic countries and the Baltic states, the share of wind energy can reach up to 50% of total consumption or production, which is accompanied by low prices. Of course, during calm periods, there may be trends of price increases, but in such cases, one should look at the average price and their consumption habits. Residents who have chosen a tariff linked to the wholesale market have the opportunity to avoid consumption during the most expensive hours and use electricity more actively during cheaper hours, which is especially justified when using heating or water heating devices, Valdmanis said.
What shortcomings still need to be overcome in state energy policy to ensure more stable prices that do not cause concern? "The most important homework for the entire region, including Latvia, is to create competitive energy production capacities, as it is clear that we cannot rely on very cheap generating capacities in neighboring regions. There is, of course, quite stiff competition for cheap energy among buyers, and the advantage always goes to the buyer who is willing to offer the producer or seller more favorable conditions.
If we want to increase energy availability and reduce prices, the first step is to increase supply. And, no matter how contradictory this may seem in society, at the moment, the development of wind energy will largely dictate price dynamics throughout the region. This is the type of energy that is still lacking in the region and is the most cost-competitive compared to both fossil and nuclear energy," Valdmanis explained.
