Energy | Electricity contracts are now getting cheaper really fast, and the futures predict that the decline will continue

Temporary the price reduction of electricity contracts continues. On Monday, in the cheapest fixed-term electricity contract, electricity cost about 11.5 cents per kilowatt hour.

The offer was Helen’s and it was valid for two years.

Just a week ago, in the cheapest offer, electric energy cost about 13.7 cents per kilowatt hour.

Electricity contract the acquirer now has a place for careful consideration. The prices of fixed-term contracts have dropped a lot in just two weeks.

For example, two weeks ago, in the cheapest fixed-term contract, electricity was sold for 16.3 cents per kilowatt hour. The price is almost 5 cents more expensive than the current cheapest offer.

This means that the monthly price of the cheapest contract with a monthly consumption of 500 kilowatt hours has dropped by 24 euros in two weeks. If the contract is valid for two years, there would be a difference of 576 euros in the electricity bills of the contracts.

The example shows that the timing of contract selection can have a large financial impact. The choice is made difficult by the fact that no one can predict with certainty whether the price of electric energy will continue in the future.

One the way to think about it is to look at what electricity futures predict the price will be like.

Derivatives markets predict that electricity will remain affordable and even become cheaper than it is today. According to derivatives, electricity costs about 9.9 cents in Finland in April–June and about 8.3 cents per kilowatt hour in July–September. The prices include the normal 24 percent value added tax on electricity.

Exchange electricity has so far been slightly more expensive in February than in January. In January, stock exchange electricity cost an average of 8.7 cents per kilowatt hour. At the beginning of February, the price has been around 12.2 cents.