Isamaa chairman calls for electricity market reform

Helir-Valdor Seeder.
Helir-Valdor Seeder. Source: Ken Mürk/ERR

The chairman of the opposition Isamaa party has called for electricity market reform due to rapidly rising prices.

Writing on social media on Sunday, Helir-Valdor Seeder said: "The shocking energy bills that have reached people in recent days and the completely abnormal, bureaucratic and confusing application system clearly show that we need electricity market reform."

He said consumers who are "overwhelmed" by their bills have had to turn to municipalities for help but it has taken the government four months to come up with a support system and no money will be handed out until February.

Seeder said this shows the state has not been able to offer help or find a solution in the long run.

"The sharp rise in energy prices clearly shows that Estonia needs electricity market reform. With the electricity market reform, people will have the freedom to buy electricity over-the-counter and the state will compensate the producer for the CO2 quota price," the party chairman said.

Seeder urged people not to condemn families. "This is not only a concern for people living on the brink of subsistence but also a situation that impoverishes families with children and the Estonian middle class," he said.

The party has already initiated a bill to temporarily reduce VAT on energy prices.

Former Minister of Economic Affairs Meelis Atonen (Reform) criticized Seeder's plan on social media and warned against this kind of reform calling it "populist talk".

He also called the VAT reduction bill "an embarrassing desire to grab taxpayers' money".

Last week, Estonian public figures started sharing their electricity bills on social media to show the differences. For some, the prices had more than doubled compared to last year, Postimees' Elu24 portal reported (link in Estonian).

Why are prices so high?

Energy prices, especially gas, have increased around the world in recent months, the BBC reports.

Reasons include:

  • A cold winter in Europe last year (2020) put pressure on supplies and, as a result, stored gas supplies were low;
  • A relatively windless summer meant it was difficult to replenish those supplies;
    There's been increased demand from Asia - especially China - for liquefied
  • natural gas.;
  • There are a number of technical and geopolitical issues at play as well.


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Editor: Helen Wright

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