Electricity prices rose sky high in the first week of the year, with the average price on 5 January rising above one euro per kilowatt hour (kWh). For one hour that evening, the price reached a peak of 2.35 euros per kWh.
For many customers on spot price contracts, that was too much.
"We have seen more customers switch from spot price deals to other contracts than in recent months, around 5,000," said Anu-Elina Hintsa from the Helsinki municipal power firm Helen.
Helen forecasts that the number of customers on spot-price contracts will decline this year compared to last.
Other firms are also reporting more switchers than usual.
"A few thousand of Oomi's spot-price customers have switched from spot-price contracts to another type of contract," said Oomi's CEO Tuomas Oksanen. "This is visible in the above-average number of changes between different contract types."
The same thing has happened with Vattenfall, according to the firm's Director of Electricity Business in Finland, Tara Sjöblom.
"Some customers seem to have been scared by the record spot prices seen on 5 January," said Sjöblom.
People have been switching contract types on days right before spot prices were to hit new peaks. Others have switched after peak days.
Companies emphasise, however, that the overall picture has not changed much. Spot price contracts remain relatively popular compared to years gone by. Lumme-Energia reports more new spot price contract starts than cancellations, for instance.
In December a survey estimated that some 30 percent of electricity consumers had spot price contracts. One year earlier, that figure was 14 percent.
There is also some evidence that Finnish consumers are getting used to price fluctuations. Väre, a power firm rooted in eastern Finland, said that the reaction was weaker than during the December 2021 price spike.
Flexibility reductions
Household consumption now declines more than it used to on days when spot prices are high. That is because of the larger numbers of households on spot price contracts.
That reduces demand and helps ensure there is enough electricity to go round.
"Households' consumption reductions help in those situations when supply is tight in a really significant way, as we have seen at the start of the year," said Tuomas Rauhala, who heads up the unit responsible for electricity network flexibility at the national power grid firm, Fingrid.
When households switch from spot price agreements to fixed price contracts, fewer consumers react to the daily electricity price.
"It could be tighter when supply is short, if there is less flexibility in consumer demand," said Rauhala.
In the long run there is also an impact on the price. When the next day's electricity is traded on the exchange, companies are effectively predicting how much electricity will be needed.
The more industry and households reduce their usage thanks to high prices, the less electricity firms need to buy on the market. Lower demand in those cases means lower prices.
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