Electricity Market Analysis: Winter 2026

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• Derivative price expectations for the second quarter of the year are clearly lower than for the first quarter.
• Due to poor snow conditions in Norway and Sweden, expectations for the price level in the second quarter are higher than a year ago.
• As we move towards spring, electricity consumption decreases as the temperatures rise, and increased solar radiation boosts solar power production. This leads to a lower electricity price level.

As recently as mid-December, weather forecasts indicated that the winter would be milder and windier than usual. However, the weather changed rapidly, and in January, a broad high-pressure area settled over the Nordic countries. The weather remained very cold for several weeks, and electricity prices rose sharply both in Finland and elsewhere in Europe.

Additionally, weather conditions in Finland and Sweden caused ice to accumulate on the blades of wind turbines, reducing their electricity production capacity. In the Nordic countries, electricity prices have at times been higher than in Central Europe, which is unusual.

In November, the new Aurora Line transmission link was commissioned, increasing the electricity transmission capacity between Finland and Northern Sweden.

On average, the connection allows for greater electricity imports from Sweden to Finland and thereby lowers the price of electricity in Finland. Nonetheless, during extremely cold periods with low wind, the price level may still rise sharply both in Sweden and Finland.

The winter in Norway and Sweden has been exceptionally dry. Less snow than usual has accumulated in the mountains. Normally, the snow melts during spring and summer, but this year, due to the limited amount of snow, the meltwater flows will also be lower than usual.

This means that less water will flow into the hydro reservoirs during spring and summer, which in turn will have an upward effect on electricity prices.

As spring approaches, electricity consumption decreases in time with warmer weather, and increased sunshine quickly boosts solar power production. As a result, the average electricity price level drops.

However, the annual maintenance of Olkiluoto 1 and Olkiluoto 2 may increase electricity prices during the second quarter of the year.

Derivative quotations for the Finnish area price for the second quarter of the year are around €50/MWh, and for the third quarter around €40/MWh.

Due to poor snow conditions in Norway and Sweden, market expectations for the price level in the second quarter are about €20/MWh higher than a year ago. Last year, the Nordic winter was exceptionally mild, which meant the hydro reservoirs were very full in spring.

This market analysis has been produced in cooperation with Power-Deriva Oy