Grid connection constraints trigger tenfold electricity price spikes in Estonia on Tuesday

Estonia's electricity exchange experiences exceptional price spikes on Tuesday evening: electricity prices surge tenfold during a single 15-minute period. The cause of the volatile prices is a substantial Estonia-Latvia interconnection limit imposed by Elering. June's average electricity price in Estonia was €64.25 per megawatt-hour, significantly higher than a year earlier.

On Tuesday, 1 July 2026, Estonia's electricity market experienced extraordinary price spikes: in the late evening hours, electricity prices surge tenfold over a short period. The cause is a transmission capacity constraint between Estonia and Latvia, which has been imposed by grid operator Elering.

Price rises to hundreds of euros overnight

In the morning and afternoon, Estonian electricity prices remained at a summer low, but the situation changed sharply towards evening around 21:00. At that time, a single 15-minute period reached a megawatt-hour price of €486 (48.6 cents per kilowatt-hour excluding VAT), whilst in the next 15-minute period it climbed to nearly €550 per megawatt-hour, according to ERR.

Behind the spikes lies the situation prevailing in southern neighbours: in Latvia and Lithuania, electricity prices remained very high throughout Tuesday evening. Already after 18:00, prices exceeded €100, rising by half to a tenfold to €637 per megawatt-hour.

Elering shielded Estonia from high prices

For most of Tuesday, this extraordinarily high price did not carry over to Estonia,, because Elering virtually completely restricted the transmission capacity of the Estonia-Latvia connection. Thanks to this, electricity transfers between the two countries were either minimal or non-existent. However, by the time of Tuesday evening's spike, this constraint had already been lifted.

Enefit board member and energy trading head Tiit Hõbejõgi explained to ERR that for much of Tuesday, the grid operator reserved up to 400 megawatts of Estonia-Latvia transmission capacity for its own use, which allowed a lower price to form in Estonia compared to its southern neighbours.

"In periods when a smaller volume is reserved for system services and Estonia and Finland's supply is insufficient to utilise the entire transmission capacity, we are in the same price zone as Latvia and Lithuania," said Hõbejõgi.

June average prices climbed

Estonian electricity prices therefore depend on where the bottleneck occurs, whether at the Estonia-Latvia or Finland-Estonia border. The more transmission capacity Elering reserves on the southern border, the more likely Estonia's price will approach Finland's level.

In June, Estonia's average electricity price was €64.25 per megawatt-hour, significantly higher than a year earlier at the same time, when it was €41.35 per megawatt-hour. It also exceeded May's average of €54.43 per megawatt-hour. On 1 July, the day's average price was €94.4 per megawatt-hour.