Previously, prices for Estonia and the region had been quoted on an hourly basis.

According to grid distributor Elering, the change follows EU electricity market rules, which require a more precise accounting of production and consumption.

Shorter time intervals better reflect real changes in supply and demand and reduce the costs of balancing the system, Elering noted, given electricity consumption and production can fluctuate significantly within an hour.

One example of how this can happen comes from renewables: For instance, solar power generation in Estonia and the region is heavily dependent on cloud cover.

Elering pointed out that for household consumers, nothing will change at first until they receive a new meter. The modification is mainly necessary for more optimal management of the electricity system, and initially, the transition is intended for better management of the electricity exchange and imbalances.

The change is already visible in Wednesday's day-ahead exchange prices.

This will most affect customers with exchange-based packages. Their electricity meters are being replaced with new ones which record consumption in 15-minute intervals, meaning their bills will also be calculated based on the 15-minute price.

In cases where a 15-minute meter has not yet been installed, the network operator will automatically divide hourly consumption into four equal parts. In other words, bills will still be calculated according to the hourly average.

The new meters must be installed by 2031, but Tõnu Roosvee, head of network services development at DSO Elektrilevi, said that the company will not be replacing working meters and that installation of the new meters capable of the 15-minute step will start on a larger scale in four or five years' time.

Customers who have signed a fixed-price contract will not be directly affected by the change.

The day-ahead electricity market will continue to display hourly average prices in parallel, though the 15-minute period will become the definitive unit of calculation.

Elering said the step is key in harmonizing the European electricity market as a whole and will help ensure greater transparency and more accurate pricing for Estonian consumers.

Elering added that since shorter trading periods help save on system balancing costs, this will also serve to reduce end-user electricity bills. Market prices also reflect actual supply and demand more accurately when shorter trading periods are used, leading to more precise price calculations, Elering says.

Allikson: Change affects larger consumers and producers

Marko Allikson, board member of Baltic Energy Partners, a trading company, told ERR nothing will change for household consumers, adding the switch to quarter-hourly measurement will mostly affect larger consumers and producers.

"It doesn't affect household consumers at all. Household consumers are mostly on an hourly measurement and, for example, Elektrilevi will only switch to quarter-hour measurement in 2031, meaning that until then everything will still be based on hourly intervals for households. The fact that each quarter-hour has its own price doesn't alter the hourly average price. It only has an effect when [consumption] measurement is also on a quarter-hour basis, or if consumption differs in each quarter-hour. In that case, that would affect the final price. As long as there is hourly measurement as per usual, it won't affect anything. But it does affect larger consumers and producers," Allikson explained.

As to whether prices will fall, or rise, to the average household consumer, Allikson said "There will be absolutely no difference."

Editor's note: This article was updated to include comment from Marko Allikson.

--

Follow ERR News on Facebook and X and never miss an update!