Finance minister expects fast solutions for renewable energy developments

Minister of Finance Keit Pentus-Rosimannus (Reform).
Minister of Finance Keit Pentus-Rosimannus (Reform). Source: Siim Lõvi /ERR

Minister of Finance Keit Pentus-Rosimannus (Reform) told ERR in an interview that she expects the developments of the wind farms in Tootsi and the Gulf of Riga to move on as quickly as possible. The government will also discuss further measures to compensate for the soaring energy prices.

Pentus-Rosimannus said the government will discuss the need to extend support measures for electricity price compensation to involve as many families as possible.

"If we should bring that limit down to the median income, which is around €1,200 per family member a month. These are the discussions we are facing. But that is a direct measure, which will reach those that need it most," the finance minister said.

This money would be taken from the CO2 quota sales. "Since the CO2 quota price has been mighty high recently, the sums we can use will likely be around €50 million," Pentus-Rosimannus said.

She added that the government's first goal is supporting and helping the people, who are most in need and who have suddenly experienced issues with paying bills. "We are not only talking about electricity bills, but also gas and heating. And the first quick solution is to provide support to compensate for the increased part of the bill," the minister said.

Center Party chairman Jüri Ratas said on Thursday that Reform is not prepared to lower VAT on electricity.

Finance minister on Tootsi wind farm court case: Just a silly situation

ERR reporter Toomas Pott asked Pentus-Rosimannus about a possible solution to the Tootsi wind farm court case, in which Eesti Energia turned to the courts to challenge a decision to discontinue a support scheme for a planned Pärnu County wind farm.

State-owned electricity generator Eesti Energia has invested some €60 million into the Tootsi wind farm development, but grid distributor Elering finds that the wind farm had not met the conditions for receiving the support at the end of 2016.

Wind farms that were founded before 2017 can receive support of €53.7 per MWh based on the market price paid for by consumers.

The finance minister said Tootsi is a bad example of how two state companies are battling each other in court. "These things should be avoided, it is just a silly situation. The investment is currently frozen as a result. It would be nice if we could end this argument with both parties coming to an agreement," she said, adding that the government could give a principled directive to end the dispute.

"The argument is over whether or not Tootsi was in one support scheme or the other. And if the result of the compromise is is that it was in the first scheme, it will actually end up costing consumers more," Minister of Economic Affairs and Communications Taavi Aas (Center) said, confirming that the dispute involves about €100 million.

"Truly, we have transitioned to a method of supporting renewable energy, which is an auction. /.../ Renewable energy charges should start decreasing, but if the Tootsi wind farm is added to the older system, we cannot hope for the charges to go down," Aas noted.

Pentus-Rosimannus said faster solutions need to take place for the Gulf of Riga wind farm development. "The fact that the furthest developed wind farm is stuck somewhere is actually unacceptable," she said.

The finance minister said it is still unknown what has delayed development, but she expects the economic affairs ministry to deal with the situation.

"I sometimes feel like the things that need quick decisions and not endless proceedings, they are processed just for the sake of proceedings. That is not the time nor place for it. We must wrap up the delayed projects and make decisions," Pentus-Rosimannus said.

She added that the government will also discuss the production capability situation and how more capabilities can be developed and accelerated.

Unreasonable to lose VAT on books

Responding to a question about Estonia potentially losing VAT on books, as a recent EU directive points out as a solution, the finance minister said it is not the best option in decreasing book prices.

The current VAT rate on books in Estonia is 9 percent. Pentus-Rosimannus recently participated in a meeting of EU finance ministers, during which EU member states were permitted to make exemptions for VAT rates.

"Experience from other countries also shows that while prices do go down some right after VAT is lowered, it will soon climb back to the previous level, perhaps even higher. Direct support in the sectors, which need it, is more efficient than these costly and ineffective methods. Otherwise we would not pick up tax revenue and also have less money to support those in need," the finance minister said.


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Editor: Kristjan Kallaste

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