Baltic Focus | Electricity Market Brief
Baltic & Nordic Region — December 2025
In December 2025, electricity prices across the Baltic states declined sharply, falling much faster than the Nordic average. At the same time, price differences inside the Baltic region persisted, with Estonia remaining noticeably cheaper than Latvia and Lithuania.
Average day-ahead prices in Latvia and Lithuania reached 83.94 EUR/MWh, down 24% month-on-month, while Estonia averaged 73.67 EUR/MWh, a 23% decline. For comparison, the Nord Pool system average stood at 52.99 EUR/MWh, down 13% m/m.
This confirms that while Baltic prices fell faster, their absolute level remained structurally higher than in the Nordics.
December was also marked by extreme short-term volatility. Within 15-minute intervals, prices ranged from –0.01 EUR/MWh to peaks of 388.43 EUR/MWh, indicating rapid shifts between surplus and deficit conditions driven by weather and system constraints.
The main downward pressure on prices came from natural factors. Wind generation in the Baltics increased by 59% compared to November, far exceeding the 22% increase in the Nordic region. December temperatures were milder than seasonal norms, reducing heating demand, while above-average inflows in the Daugava river supported strong hydroelectric output. Together, these factors lowered reliance on higher-cost thermal generation.
A key structural factor behind Estonia’s lower prices was the uninterrupted operation of both EstLink interconnectors. Throughout December, the cables ran at full capacity of around 1,016 MW, with imports from Finland to Estonia rising by 7% month-on-month. This steady inflow of relatively cheap Nordic electricity directly translated into lower prices in the Estonian market.
However, further southbound flows were intentionally constrained, not by physical cable limits but by insufficient regional balancing capacity and system stability considerations. As a result, the same Finnish electricity reached Latvia and Lithuania at a higher effective price, reflecting balancing risks rather than actual scarcity.
This led to a notable Latvia–Lithuania market paradox. Despite Latvia’s electricity generation covering roughly 101% of domestic consumption in December — making the country a net exporter — local consumer prices saw little relief. Excess generation flowed within the regional market, particularly toward Lithuania, while price formation in Latvia remained tied to cross-border balancing conditions rather than domestic output levels.
The broader energy backdrop remained mixed. EU gas storage levels were around 10% lower year-on-year, increasing sensitivity to potential cold spells. Oil prices declined during December amid oversupply, while Nordic nuclear availability rose to approximately 89%, providing stable baseload generation.
Overall, December underscored a key reality of the Baltic power market: prices are increasingly shaped by system architecture, balancing capacity and weather volatility, rather than by local generation volumes alone. This structural dynamic is likely to persist beyond the winter period. BSM © 2026
Image: photos/photo_158@15-01-2026_17-48-53.jpg