Simson: Vulnerable consumers can be helped with subsistence benefits

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Kadri Simson. Source: Priit Mürk/ERR

Each European Union state has their own model to aid vulnerable consumers and Estonia has its subsistence benefits, the European Commissioner for Energy Kadri Simson told ERR in response to record-high electricity prices.

"I asked my family of three people living in a three-room apartment for their electricity bill. August 2019 and August 2021. True, the price of electricity has grown. It was €2.77 in 2019 and now more than €5.50. If we consider expenses in other areas, it is not a matter of the family's greatest expense," Simson said.

She added that if it is viewed regionally, Estonia, Latvia and Lithuania along with the Nordic countries are great examples to Europe about how a regional electricity market can operate and bring the cheapest possible electricity to the market.

"By contributing too much on older options, long-established nuclear power plants and holding back on new investments, we can be popular in the short-term, but this can cause issues in the long-term," Simson said.

The energy commissioner said that increases in the price of electricity can be seen across the world despite regulations being so different. "The greatest reason for the energy price increases is the rapidly recovering world economy. That input prices have grown. While there was extraordinarily low consumption last year for natural gas and oil and production took a hit, the prices of input are higher on the entire world market than the previous year," Simson said.

She did not agree with the opinion of Enefit Power board chair Andres Vainola, who said the price increase stems from the effects of the EU's emissions trading system and a green revolution that has come too fast.

"The green revolution gives investors certainty about where they should and should not invest. Currently, we see that many consumers who fill their cars up with diesel or gasoline are dependent on the volatile market. And they are dependent on us importing the product in this region," Simson noted.

She added that the price of renewable electricity from own production entering the market in Estonia is competitive. "If there are more investments, if there is no deficit, which needs to be covered by gas power plants, for example, then we can expect better predictability in terms of our energy prices. It requires more investments toward new capabilities and solving questions about how electricity can be stored."

The energy commissioner also emphasized that electricity as a component is just one part of the consumer price. "Grid costs are also important and here is where the European Commission sees an opportunity in Europe financing the development of their own network, which is a primary condition for us to make electricity more cost-efficient for consumers,@ Simson explained.

She was skeptical about developing new nuclear power plants: "We have good examples of nuclear power plants. Their construction has gotten more expensive and lasts longer than initially planned."

Simson did not consider the statements of former finance minister and EKRE chairman Martin Helme, who said a solution to the high electricity prices is to leave the EU's emissions trading system. "I think this needs to be considered as a proposal by the opposition, which does not apply in real life. By the way, EKRE was a very responsible EU member state party while in government," Simson noted.

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Editor: Kristjan Kallaste

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