Authority urges renewables subsidies review amid soaring energy prices

Competition Authority signage.
Competition Authority signage. Source: Siim Lõvi /ERR

The Competition Authority (Konkurentsiamet) has proposed reviewing renewable energy subsidies, in the wake of soaring electricity prices. Estonian consumers have had to pay hundreds of millions of euros towards renewables in the past 14 years.

The authority says that the Europe-wide price surge in recent weeks, a surge which has made itself known in Estonia as well, results from rising natural gas and also coal prices, rising consumption as winter approaches, rising CO2 quota prices, low levels of renewable energy production as among factors which have been passed on to consumers as significant price increases.

Electricity prices have so far risen by 102 percent on year to 2021, which makes it completely viable that the basis on which the renewable energy subsidy is calculated is now outdated.

The authority made its proposal to the Ministry of Economic Affairs and Communications, while the renewable energy fee itself is included in the consumer's electricity bill and used to finance the production of renewable energy.

As decisions to invest in the production of renewable energy have been based on the exchange tariff of electricity in effect at the time and on potential subsidy for renewable energy, the issue also concerns investments as well as end-user prices, the authority said.

Between 2007 and 2020, consumers in Estonia have paid €827.9 million towards the production of renewable energy.

A bill providing discounted electricity prices through the winter months passed earlier this month, was approved of by the Competition Authority, and is to apply retroactively back to the start of the month and forwards to the of March.

It has come at the same time as natural gas prices and gasoline and diesel fuel are also at record levels, along with other economic fallout from the pandemic, plus EU climate change policies impacting on the oil shale sector in eastern Estonia.


Follow ERR News on Facebook and Twitter and never miss an update!

Editor: Andrew Whyte

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: