Friday, June 2, 2023

Electricity contract prices fell – see at what price electricity is being sold now


Fixed term power contracts have grown in popularity.

The prices of fixed-term electricity contracts have declined significantly during the spring. Fixed-term contracts have grown in popularity again, along with tied contracts for the exchange of electricity.

Anu-Alina Hintsa, director responsible for sales and customer service at the energy company Helen, told TalousNomi that at the moment, about half of customers buy fixed-term contracts and half exchange electricity contracts.

On Tuesday you got a three-month fixed-price electricity contract at the cheapest price of 8.99 cents per kilowatt hour from a seller called Vihreya Elenergia, according to the comparison website operated by the Energy Agency. The most expensive price was 14.90 cents per kilowatt hour from Lamnen Energy. This is a two year fixed term contract. The monthly fee for both is in addition to the energy charges.

Prices are the same regardless of consumption or place of residence. In other words, according to the comparison, there is no difference in prices whether you signed a contract for a district-heated apartment or an electric-heated detached house, or whether the place of use was in Espoo or Rovaniemi.

Back in April, the price of electricity partially decreased due to a temporary reduction in value-added tax. The tax cut was valid from December to April, and the value-added tax imposed on electrical energy during that time was ten percent. Now the tax has come back to 24 per cent.

Compared to the beginning of the year, electricity prices have decreased markedly. When Taloussaanomat compared prices in January, the cheapest fixed-price fixed-term electricity contract was 22.00 cents per kilowatt hour. The most expensive price was 26.50 cents per kilowatt hour.

In fixed term contracts, the consumer cannot change the contract and the fixed price is valid for the entire duration of the contract. In practice, the price of fixed-term contracts follows the electricity futures market. Futures prices of electricity are the prices agreed to trade in advance in the wholesale electricity market.

Nowadays, the most common type of electricity contract is based on the price of electricity in the stock market. In this, the price of electricity also changes hourly according to the quotations of the Nordic electricity exchange Nord Pool.

On Tuesday, Nord Pool’s price range was increased from 0.1 cent at its lowest to 7.7 cents at its highest per kilowatt hour.

In the picture below you can see the stock electricity price now and in the next few hours.

Last fall, many energy companies stopped selling futures contracts altogether as futures prices were rising and the overall electricity market looked volatile.

– Summer prices are currently significantly lower than prices at the start of the year – This reflects the effect of the volume of use within the year. Helenin Hintsa says that prices are usually lower in summer and higher in winter.

Now, the Nordic futures market is trading at a generous four cents per kilowatt hour for June-July power delivery. Prices are a generous six cents for early autumn delivery.

It is about the Nordic system price future, on top of which there will be a regional price difference future in Finland, i.e. the difference between the electricity price in Finland and the system price.

– Electricity market prices are still high for the winter months, for example, for January–March 2024, yesterday’s closing price was 95.60 Euro per MWh, which means the customer price at that time is about 13–14 cents per kilowatt hour.

For example, if you take a two-year fixed-term contract now, the pricing takes into account both the summer low prices and the winter high prices, according to Hintsa.

– This option is worth considering if you want to avoid the highest prices in winter, he says.

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