Electricity prices to spike tonight in Latvia, but a sharp drop expected tomorrow
On Tuesday evening, Latvia's exchange electricity price will reach up to 35 cents per kWh, while Wednesday's average will be around just 7.8 cents. The swing illustrates how the dynamic electricity tariff works.
Electricity prices on Latvia's power exchange will hit an unusually high level on Tuesday evening, peaking around 8 p.m. at roughly 35 cents per kilowatt-hour including VAT. Prices will stay elevated throughout the evening, from 5 p.m. to 10 p.m., mostly exceeding 30 cents per kWh.
The picture will change dramatically the very next day: Wednesday's average exchange price is expected to be around 7.8 cents per kWh, with some hours seeing prices of just a few cents. The contrast illustrates how a dynamic, exchange-based electricity tariff works, with prices able to shift substantially within a single day.
How the exchange price is formed
Under a dynamic tariff, the cost of electricity is not fixed for the whole day — it follows the Nord Pool market price, which in Latvia is set in 15-minute intervals. As a result, the rate can range from a few cents to 40 cents or more per kWh within one day. The final bill also includes charges set by the electricity supplier and other standard fees on top of the exchange price.
A dynamic tariff benefits households that can shift consumption to cheaper hours — for example, running washing machines, dishwashers, water heaters, or charging electric vehicles when prices are low. For households that mainly use electricity in the morning and evening, when demand tends to be higher, the tariff can prove more expensive.
Price spikes are driven by the balance of supply and demand: when consumption is high in a given hour but cheap electricity is scarce, prices rise. Weather plays a role too, since insufficient wind or solar generation reduces the supply of cheap renewable electricity, as do power plant availability and prices in neighboring countries.
According to the latest data from Latvia's Public Utilities Commission, 75.7% of Latvian households were on fixed-price contracts by the end of June, while 15.7% had chosen variable, exchange-based pricing.
