Kallas: Energy market should operate without us needing to help people

Prime Minister Kaja Kallas.
Prime Minister Kaja Kallas.

Prime Minister Kaja Kallas (Reform) said Estonia needs long-term solutions in managing the soaring energy prices, which would also allow the country to get through an energy crisis without much additional support. She added that lowering VAT on energy does not help anyone.

"Current estimations show that prices should still go down. If we look at the energy carrier prices and then the dynamics of Nord Pool, there is quite a bit of renewable energy. In addition, electricity produced in the Olkiluoto nuclear power plant should hit the market in February, meaning there should be more providers on the market, which should bring prices down some," Kallas said at a government press conference on Thursday.

The prime minister noted that since consumption decreasing as the colder period draws to a close should also help in lowering prices.

"There is a big discussion next Thursday about what are the obstacles of using renewable energies in Estonia, which cannot be used for the network for some reason. So that these obstacles could be dealt with. Kredex, which operates under the Ministry of Economic Affairs and Communications, should also come out with new measures that affect small production and solar panels on private homes, for example, so people could help themselves," Kallas said.

She said Estonia needs solutions to help in the long-term, as well. "I just cannot imagine us having to pay benefits and wanting our prices to remain stable and affordable and for us to have a long-term perspective. The market should operate without us having to support people separately," Kallas said.

The prime minister said about half of Estonia's population is on fixed-price contracts and do not have to worry about peak prices. "If you are afraid, you buy insurance so that there would not be a peak and you would not have to suffer. Electricity providers offer fixed-price contracts, as well," she said, adding that only 10 percent of Finnish consumers are on stock exchange electricity price packages.

"We are creating the options of ensuring stable energy prices and allowing people to help themselves," Kallas said.

She said the government has implemented significant measures to compensate for soaring energy prices and that Reform Party is still not a supporter of lowering VAT on energy. "[Lowering] VAT would have little effect for the consumer - €4 or €5. Will that help for a €1,000 bill? I think they would say that we are laughing at them," Kallas said.

"Since the state does establish energy prices, there is no guarantee that lowering VAT would reflect itself somehow on the consumers' bills, because producers can raise prices if they want to," she added.


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Editor: Kristjan Kallaste

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