Court agrees merger of Enefit Green, Nelja Energia was lawful
The Tallinn Administrative Court has left in force a decision of the Competition Authority which permitted a merger to be concluded between the Eesti Energia renewable energy subsidiary Enefit Green and Nelja Energia, a company acquired by Eesti Energia.
Enefit Green AS and Nelja Energia AS, whose merger required regulatory approval, notified the Competition Authority of the merger in June 2018.
The endorsement of the merger by the Competition Authority on November 6, 2018 was contested by the companies Eleon AS, AS Eesti Elekter, Eurowind OÜ, Vaivara Tuulepark OÜ, Roheline Elekter AS, Aidu Tuulepark OÜ, Audru Tuulepark OÜ and OÜ Estwind Energy.
The appellants wanted the decision of the Competition Authority to be cancelled and for the Competition Authority to eliminate the impacts of the concentration.
The main contested matter was the definition of the relevant goods market that the merged Enefit Green AS and Nelja Energia AS are operating on. The Competition Authority found that the goods market for the production and wholesale of electric energy that the participants in the concentration are active on embraces geographically at least Estonia and Finland, for the reason that the wholesale of electric energy in Scandinavia and the Baltic countries take places mainly via the electricity exchange Nord Pool.
Considering also the interconnection capacities between Estonia and Finland, this means that in the generation and wholesale of electric energy business operators having generating assets in both Estonia and Finland are competing between themselves.
The Competition Authority found that the merger of Enefit Green and Nelja Energia does not affect the goods market embracing Estonia and Finland in such way that there would be grounds for prohibiting the consolidation to protect competition.
The appellants meanwhile found that the Competition Authority has not taken into consideration all substantive circumstances when deeming Estonia and Finland a single geographical market.
The Tallinn Administrative Court on July 17 upheld the stance of the Competition Authority, dismissed the application of the appellants and left the decision of the Competition Authority unchanged.
The court found that there are grounds to deem the situation that is true for the predominant amount of time as the real competition situation. For the predominant amount of time, electricity prices in Finland and Estonia are the same and electricity generated in Estonia can be freely obtained in Finland and vice versa.
The uniform price also demonstrates that there are sufficient transmission capacities between Estonia and Finland. Therefore, it is justified to deem production and wholesale of electric energy in Estonia and Finland, which the merger of Enefit Green and Nelja Energia does not impact substantially, as the relevant goods market.
The judgment of the first tier court can be appealed until August 17.
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Editor: Helen Wright