Pro-Kremlin channels falsely link rising energy prices in Baltic states to disconnection from Russian grid

On Feb. 9, the Baltic countries of Latvia, Lithuania, and Estonia severed all ties with the Russian energy grid. In the days since, electricity prices in the Baltic region have surged.

In Estonia specifically, the average price has risen from €126 per MWh last week to €191 per MWh, according to Euronews. Russian pro-war channels have responded by amplifying (1,2) reports claiming that the rising costs are a result of the Baltic states’ disconnection from the Russian power grid.

However, as Dr. Igor Krupenski, an energy science expert and lecturer at the Tallinn University of Technology (TalTech), explained to The Insider, the real cause of the price hike is not the disconnection from Russia, but rather the damage recently inflicted on an undersea cable running between Finland and Estonia in the Baltic Sea.

According to Krupenski, the previous connection to Russia had long served a technical purpose — “frequency maintenance”:

“Right now, Estonia is indeed experiencing exceptionally high electricity prices. However, this increase should not be directly linked to our exit from the BRELL energy ring. The Baltic states have not been purchasing electricity from Russia for a long time. The connection that remained until February 8 was used solely for technical frequency regulation in our region.

Electricity prices in our region are determined by the Nord Pool exchange and are influenced by several factors:

- The EstLink-2 cable between Estonia and Finland is currently out of service. With a capacity of 650 MW, its failure has severely limited access to cheaper electricity from Finland, which is primarily generated by nuclear power plants.

- The winter season has pushed electricity consumption close to peak levels. As demand increases, so does the cost of electricity.

- The price of natural gas has risen, and gas-fired power plants, which are typically used to cover peak loads, play a key role in determining market electricity prices.

The current electricity price surge in Estonia is driven by a combination of factors: the EstLink-2 cable failure, high winter consumption, and rising gas prices. These factors are temporary, and the situation is expected to change. For instance, once the EstLink-2 cable is restored, access to more affordable electricity from Finland will improve, leading to lower prices. Additionally, as spring approaches and renewable energy production (wind, solar, and hydroelectric power) increases, electricity prices are likely to decline.

It is also important to note that not all consumers in Estonia are directly affected by fluctuating market prices. Households and businesses can sign fixed-price electricity contracts, meaning many consumers have already secured stable rates and are not experiencing sharp price hikes. Those who opted for exchange-based tariffs are indeed seeing significant price increases, but this was a conscious choice based on expectations of long-term savings during periods of low prices.”

The damage to the EstLink-2 cable in the Gulf of Finland was first reported on Dec. 25, 2024. As the more powerful of the two EstLink cables, it has a capacity of 650 MW, compared to 350 MW for EstLink-1.

Shortly after the EstLink-2 incident, telecommunications companies Elisa Eesti and CITIC Telecom, along with Finnish broadcaster Yle, reported damage to four more undersea cables. These include two telecommunications cables between Finland and Estonia owned by Elisa, one operated by China’s CITIC Telecom CPC, and the C-Lion1 cable, owned by Finnish company Cinia, which connects Helsinki to Germany.

In December, Finnish authorities detained the tanker Eagle S, which is suspected of being part of Russia’s “shadow fleet,” a collection of poorly maintained vessels that help Moscow trade oil at prices above the Western-imposed $60 cap. The tanker is accused of damaging four telecommunications cables — along with the Estlink 2 power cable connecting Finland and Estonia — by dragging its anchor along the seabed. British maritime journal Lloyd’s List, citing an unnamed source directly involved with the vessel, later reported that the Eagle S was equipped with spy equipment capable of monitoring NATO ships and aircraft.

In January, NATO announced the launch of the Baltic Sentry mission to safeguard critical infrastructure in the Baltic Sea. The operation will involve patrols by frigates, maritime patrol aircraft, and unmanned naval drones.