VILNIUS/TALLINN (Aug 17): Companies in Europe's Baltic region are reining in their power consumption after electricity prices soared to the highest on the continent.

Power for delivery from 6pm to 7pm on Wednesday in Estonia, Latvia, and Lithuania jumped as high as €4,000 (RM18,223.50) a megawatt-hour, the upper limit allowed at auction, as natural-gas costs continued to surge. Baltic prices topped those elsewhere in Europe as demand ran ahead of available supply.

As costs bite, Lithuanian grocery chain Norfa said it plans to dim the lights at its stores and turn off ventilation and air-conditioning from 6pm. Estonia's Hansa Candle AS, the largest candle maker in Scandinavia and the Baltics, will halt operations during the one-hour price spike.

Europe is suffering its worst energy crunch in decades after Russia curtailed gas flows to the continent. Heat waves, nuclear outages, and lower renewables output have exacerbated the crisis, pushing up prices to unprecedented levels.

"The maximum price occurs when the quantities sold to the market during the hour do not cover demand," said Ingrid Arus, market manager for the Baltics at the Nord Pool ASA exchange.

"All of the Baltic systems are today in a deficit; additionally all of the imported capacity from Finland, Sweden, and Poland have been used up."

Lithuanian Energy Minister Dainius Kreivys called on the power exchange to investigate its algorithms. Prices for the Baltic region are determined by "small but very expensive generation capacities", AB Ignitis Grupe, Lithuania's power utility, said in a statement. All of the firm's 24 offers for cheaper generation options for Wednesday were rejected by Nord Pool, it said.

Price 'nonsense'

"Perhaps it's possible to modify the algorithm in some way," Kreivys told lawmakers. "Because this is nonsense and nonsense on a European scale."

Nord Pool's Arus suggested the exchange cannot alter the algorithm, saying it is "agreed between all the European electricity markets and the transmission system operators".

The average price over the full 24 hours on Wednesday was as high as €823.98 in Latvia and Lithuania, far exceeding prices in the region's biggest markets of Germany and France.

While Baltic officials dismissed any possibility of blackouts, the countries' governments are drafting plans for subsidy packages as inflation tops 20% in all three nations.