Narva municipality wants law change to halt rising heating prices

A Narva power station.
A Narva power station. Source: Artur Tooman/ERR

Authorities in the eastern border town of Narva are appealing for legislative changes to head off significant rises in the cost of heating, amid fears a rise in Carbon Dioxide quota prices will make keeping homes warm prohibitively expensive, in one of Estonia's most deprived areas.

The city government plans to ask its national counterpart to fast-track amendments to the Energy Market Act – the main piece of legislation dealing with the generation, transmission, sale, export, import and transit of electricity – to rectify the situation during a particularly cold spell which has recently seen nighttime temperature values dip below -25C in the region.

Narva gets most of its heat piped in from hot water, a by-product of activity of the nearby Baltic power station – a process called cogeneration, or combined heat and power (CHP) – and one which has led to among the lowest heating prices nationwide up until now.

Narva mayor: Local residents agitated by impending heating cost increases

However, price surges are causing worry, with newly-installed mayor Katri Raik (SDE) saying that local residents won't stand for it, particularly at a time when unemployment continues to rise.

Raik said: "We have low incomes here; Narva's concern is wage poverty. Unemployment figures in Narva are currently exceeding the 4,000-mark. The last time this level was seen was in 2012, and a rise in heat prices is difficult for families to accept."

Raik added that the CHP power station in question was currently not receiving state support.

Energy Market Act awaiting amendments

Amendments to the Energy Market Act have been pending for around a year, ERR reports. These would permit power stations in Narva to receive support in burning woody biomass fuel, as they had before.

Andres Vainola, board chair at state-owned power generator Eesti Energia's renewable subsidiary Enefit Green said: "With the amendments to the Electricity Market Act, CHP at the Baltic power station would be supported. This would be one concrete solution on curbing any further price increase," said Vainola from Enefit Power.

Vainola said the current heating price rises are being driven by the increase in CO2 quotas (which are government-granted and can be bought or sold by companies; for instance firms outputting below their quota can sell to firms exceeding theirs – ed.).

Enefit Green chief: CO2 tariffs based on outdated, lower CO2 price

Vainola said: "The newest tariffs had been calculated on the basis a CO2 price of €27.4 per tonne. But it is common knowledge at present that the CO2 price has already reached €37-38 per tonne. So we are completely open to a position again today where, obviously further price increases can happen."

Narva's power stations were deprived of renewable energy support a decade ago, but around a third of the Baltic power station's CHP unit uses woody biomass waste as fuel, split about 50-50 in origin between domestic output and foreign.

Prime Minister Kaja Kallas (Reform) recently said that the practice of burning wood biomass in Narva needed to end, due to environmental concerns.

At the same time, the traditional source of fuel, shale oil, is being phased out in the region as Estonia strives to meet EU climate change goals; Andres Vainola said that a longer-term solution may be found within the EU's just transition framework.

Just transition, also known as fair transition, is broadly speaking a framework developed by the trade union movement aimed at securing worker rights and livelihoods as economies shift to sustainable production due to climate change and other environmental considerations.

The EU wants to be climate-neutral by 2050.


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Editor: Andrew Whyte

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