Finland's new data centres could push up Estonian electricity prices
Experts warn that Google's planned data centres in Finland could raise Estonian electricity prices by roughly half a cent per kilowatt-hour unless production capacity grows in either country. Industry officials, however, say average prices may stay close to current levels while volatility increases.
Google plans to invest 13 billion euros in new data centres in Finland, and according to ERR News, the move could also affect electricity prices in Estonia. Over the next 22 years, these energy-intensive facilities are set to purchase half of the output from the Loviisa nuclear power plant, leaving Finland with less surplus electricity to sell cheaply — including to buyers like Estonia.
Tiit Hõbejõgi, a board member of Enefit, a subsidiary of Eesti Energia, explained that rising electricity prices in Finland would automatically spill over into Estonia whenever the country buys power from its northern neighbour. He noted that Finland's electricity consumption has already grown by 500 megawatts compared to last year, and that, excluding the coldest winter months, prices there have risen by five euros per megawatt-hour. He estimated this could translate into roughly a 0.5-cent-per-kilowatt-hour increase in Estonia.
Differing industry assessments
Timo Tatar, head of Ignitis Eesti, took a more measured view, saying average electricity prices are likely to stay close to current levels, even though surplus capacity in Finland will shrink at certain times and market volatility will increase. He added that higher demand is also likely to spur construction of new power plants, including wind farms, which could bring periods of cheaper electricity as well.
In recent years, Estonia has imported about 40% of its electricity consumption from Finland and other Nordic countries. Kalle Kilk, head of grid operator Elering, cautioned that Estonia should not rely too heavily on surplus power from neighbouring countries, since rising demand without matching capacity growth affects both energy security and prices. He concluded that Estonia needs to take greater responsibility for producing sufficient electricity domestically in the future.
