The price of electricity fell by 19% in July, with solar power becoming the largest source of electricity generation in Latvia

In July, the average price of electricity in Latvia was 7.47 cents per kilowatt-hour, which is approximately 19% lower than in June. The price reduction was driven by higher wind power generation in the Baltics, high levels of solar power generation and, towards the end of the month, greater access to cheaper electricity from the Nordic countries, according to data compiled by the energy company Enefit.

Wind power generation in the Baltics has risen significantly

In July, wind energy generation in the Baltics rose by more than 50% compared with June and almost doubled compared with July 2025. Wind farms in the Baltic states generated approximately 503 GWh of electricity during the month. Solar energy generation also remained at a high level, totalling approximately 740 GWh across the Baltic States.

At the same time, electricity generation from fossil fuels in the Baltic States fell to approximately 81 GWh, which is less than half the volume recorded in July 2025. Greater availability of wind and solar energy reduced the need to utilise more expensive electricity generation capacity.

However, wind energy generation was uneven throughout the month. Higher output helped to reduce electricity prices at the start and end of July, whilst in the middle of the month, as wind power generation declined, Latvia and Lithuania were more reliant on more expensive energy sources during the morning and evening hours.

Solar energy – the largest source of electricity generation in Latvia

In July, a total of approximately 389 GWh of electricity was generated in Latvia, accounting for around 71% of the country’s total consumption, which reached 545 GWh.

Solar power stations generated the most electricity in Latvia – approximately 213 GWh. Hydroelectric power stations provided approximately 115 GWh, whilst wind power stations provided 32 GWh. Solar and wind energy together accounted for approximately 63% of all electricity generated in Latvia. Latvia covered the remaining shortfall between domestic production and consumption by importing electricity from neighbouring countries.

Romāns Tjurins, Head of Portfolio Management and Market Research at Enefit, points out that the impact of solar energy was particularly noticeable during the daytime: “For almost a third of the hours in July, the price of electricity in Latvia was below 2 cents per kilowatt-hour. Between 10.00 and 18.00, the average price was around 2.9 cents per kilowatt-hour, as output from solar power stations reduced the need for imports and more expensive sources of generation.”

The price of electricity varied significantly at different times of the day

In the evening, when solar power generation decreased, the price of electricity rose significantly. Between 6.00 pm and 11.00 pm, it averaged 12.4 cents per kilowatt-hour, but in some hours it reached as high as 25.7 cents per kilowatt-hour.

“The July figures show that prices are influenced not only by the total amount of renewable electricity generated, but also by the time of day when this energy is available. Solar power can cover a significant proportion of consumption during the day, but its generation ceases in the evenings. If wind generation is also low at this time, demand must be met through imports, hydroelectric power or more expensive generation capacity,” explains Romāns Tjurins.

Interconnection constraints continue to affect prices in the Baltics

The average electricity price in Lithuania in July was 7.56 cents per kilowatt-hour, almost the same as in Latvia. In Estonia, however, it was significantly lower – 4.39 cents per kilowatt-hour.

In Finland, the average electricity price was approximately 1.54 cents per kilowatt-hour, whilst the flow of electricity from Finland to the Baltic region reached approximately 531 GWh. However, interconnection constraints between Estonia and Latvia prevented the full volume of cheap Finnish electricity from reaching the Latvian and Lithuanian markets.

Consequently, the price level in Estonia remained closer to that of the Finnish market, whilst in Latvia, prices were similar to those in Lithuania for most of the month. Towards the end of July, the fall in prices in Latvia and Lithuania was also driven by imports of cheaper Swedish electricity via the Sweden–Lithuania interconnector.

In August, price trends will be determined by weather conditions and import opportunities

It is expected that the average electricity price in Latvia could rise moderately in August. Solar power will continue to help keep prices lower during the day, but as the days grow shorter, its impact will gradually diminish.

Wind power generation in the Baltics and Finland, the output of Latvia’s hydroelectric power stations, and the ability to import cheaper electricity from the Nordic countries will play an increasingly important role. Interconnection constraints between Estonia and Latvia will continue to hinder the flow of cheaper Finnish electricity into Latvia, whilst imports via Lithuania may help to reduce prices during periods when cheaper electricity from Sweden is available.

Consequently, prices in August may vary significantly depending on the day and time of day – they will be lower during periods of high wind and solar power generation, but may rise in the morning and evening hours when the availability of renewable energy and imports is more limited.