Estonia has paid out €170 million in compensation for high energy prices

Euros (photo is illustrative).
Euros (photo is illustrative). Source: Siim Lõvi/ERR

The Estonian state has paid out €158 million in compensation to private consumers and businesses via Ministry of Economic Affairs support measures, while the Ministry of Finance has paid out an additional some €10 million in energy bill support via local governments.

When energy prices saw a sharp increase starting last fall, the Estonian government adopted several decisions in a row aimed at alleviating the impacts of the spike for both private individuals and businesses.

A total of seven measures were employed to compensate unexpectedly high energy costs to domestic and business consumers, six of which were offered by the Ministry of Economic Affairs and Communications and one by the Ministry of Finance.

By now, the state has paid out nearly €170 million in energy bill compensation. Support can still be sought for the month of April via just one measure; the other six measures have since expired.

A measure worked out by the Ministry of Finance provided compensation for electricity, gas and district heating bills for families earning up to an average monthly income. While the measure was initially meant to compensate bills dating back retroactively to September 2021 through March of this year, the government opted to extend the measure to include the month of April as well. While there are currently no plans to extend the measure into May, current figures only reflect through April 11.

Since December, when local governments began accepting applications for support, 77,670 applications have been approved and a total of nearly €10.5 million in support has been paid out.

Harju County saw the highest number of approved applications at 37,101 — 26,055 of which were in Tallinn.

Per capita, Narva-Jõesuu was the local government and Lääne County the county with the highest number of approved applications at 0.14 and 0.9, respectively.

The measure was designed to compensate 80 percent of the price increase of a specific energy type — either electricity, gas or heat — for families earning up to the average monthly wage. Families applying for the measure must submit an application together with supporting documents, including relevant bills, to their local government.

A household qualifies for this support if their net income falls below the median, which has been calculated to be €1,126 per single person, with a weighted additional sum of €563 (0.5) for each additional person aged 14 or older and €338 (0.3) for each additional person aged 13 or younger.

More than €100 million spent on electricity network fees

The Ministry of Economic Affairs and Communications was tasked by the government to devise a total of six measures: district heating compensation for household customers, a natural gas support measure for business consumers, a cap on electric and gas bills for household customers, the compensation of electricity and gas network fees for everyone, and electricity network fee compensation for business consumers.

A total of €158 million was spent on compensation via these six measures. The Economic Affairs Ministry's support measures were applied automatically, meaning that no one had to apply to seek compensation.

The compensation of electricity network fees proved the most expensive measure for the state. While the measure initially covered half the cost of network fees for all users, beginning in January, network fees were paid in full for institutions and businesses, bringing the total price tag of the measure, which expired at the end of March, to €103.7 million.

Under this measure, a total of €12 million was paid out in October, €13 million in November, €15 million in December, and more than €20 million each month from January through March.

Another €21.4 million was spent on compensating gas network fees for both household customers and business consumers. Gas network fees were covered in full for all users from December through March. Network fees were highest in December, costing a total of €6.4 million.

For the months of February and March, household customers received support in the total amount of €13.5 million, or €6.8 million and €6.7 million, respectively, to cover the increase in the cost of district heating. Household customers' district heating bills were compensated in the amount of 65 percent of the portion of heating bills to exceed October 2021 figures.

The state also paid €9.3 million in support to compensate for increased electricity costs during the months of January, February and March. The cap stood at 12 cents per kilowatt-hour (kWh) plus VAT for electricity consumption up to 650 kWh per month. This meant that if the cost of electricity either on the market or within a fixed-price package exceeded 12 cents per kWh, the state would compensate the rest.

Two measures were employed to compensate for increases to natural gas prices: compensation for a price cap on natural gas for household customers as well as support for business consumers of natural gas. A total of €10 million was spent on these two measures combined over a period of three months.

The natural gas support measure for business consumers applied to February and March and was used to compensate the cost of natural gas at a rate of €2.74 per megawatt-hour. This measure was open to all businesses.

The natural gas price cap measure for household customers applied to January, February and March, with the cap set at 6.5 cents per kWh on gas consumption up to 2.75 mWh per month; the portion of bills exceeding this cap was compensated.

Support was paid out for the Ministry of Economic Affairs' measures via the Environmental Investment Center (KIK) for energy consumption through the end of March. Energy retailers, network operators and operating companies had until April 14 to submit their applications.


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Editor: Aili Vahtla

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