'Olukorrast riigis': Energy measures merely short-term alleviation

'Olukorrast riigis' hosts Indrek Lepik and Hindrek Riikoja.
'Olukorrast riigis' hosts Indrek Lepik and Hindrek Riikoja. Source: Siiri Lubasoo/ERR

Journalists Hindrek Riikoja and Indrek Lepik found on the Raadio 2 "Olukorrast riigis" talk show that energy price crisis alleviation measures decided this week constitute short-term aid and that the government should be making preparations for next winter.

Lepik suggested that the government rather conveniently finally decided on new measures half-way into the crisis.

"Talking about dwindling gas deliveries from Russia and its effect on the price of natural gas, the U.S. is making efforts to bring more liquid natural gas to the European market. In other words, there is hope for the price situation improving. In other words, the decision was made at a less critical point in time, when half the crisis is over. Talking about compensating people for bills in January and February, while snow is forecast, the temperatures should be relatively mild," Lepik said.

In the end, the new measures give people certainty their bills cannot become downright astronomical, Lepik said.

Riikoja was less sure. "Looking at forecasts, the prices are not believed to greatly exceed the €120 per MWh price cap introduced by the government," he noted.

Forty-two point five percent of Estonian households live in a private or terraced house, while 57.5 percent live in apartment buildings or elsewhere. "A private residence tends to have a bigger power bill than an apartment if neither is heated using electricity. This allows us to conclude that roughly a third of people will not benefit greatly from this measure," Riikoja said.

The host also described the previous measure, where support for low and middle-income households is distributed by local governments and that will also be retained, as unclear, suggesting it is difficult for people to calculate whether they qualify.

Lepik said that while the Reform Party had to surrender some ground for the agreement [for the additional measures] to be made, no one will be worse off in the long run. "We are past the peak of the crisis anyway, meaning that no one will have to pay the political price in terms of how effective the measure will be," he remarked.

Riikoja said that even experts cannot say what will happen to energy prices in the future, which is something the government needs to keep in mind.

"If the state offers companies favorable loan conditions – what will happen after that? What measures are being taken to avoid colossal electricity and gas bills next winter? No attention has been paid to that," Riikoja said.

"The partners spent their steam on looking for an immediate solution to keep the coalition from falling apart," Riikoja said, adding that the government will surely bail out people next winter because of looming elections.

"The possibility of overspending will be very real by then that would leave a hole in the state budget it would take a very long time to patch. The government needs to pull itself together and have a plan in place for next winter this spring."

Lepik said that agreements are also needed on the European level, while they must not jeopardize green energy investments.

Riikoja said that switching to renewable energy is vital not just for the green turn but also because Estonia's oil shale reserves will run out eventually.


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Editor: Marcus Turovski

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