The influences of climatic factors on electricity prices in liberalized market in Finland

Abstract

The aim of this study was to find out the influences of different parameters on the electricity prices in the liberalized electricity market in Finland. The main emphasis was placed on climatic factors, rainfall and temperature. In this study, the spot price of electricity was compared to rainfall and temperature. The spot price is the co-Scandinavian electricity exchange Nord Pool price in Helsinki. The spot price is highly dependent on the long term rainfall. This is due to the fact that in Nordic countries a great part of electricity is produced by hydropower. The temperature seems to have very big short-term effects on the spot price. Also heavy rains in winter have short-term effects on the spot price in Finland. The rains and storms that occur in summer don't seem to have any real effect on the spot price.