Opposition express skepticism over energy measures in coalition agreement

Tanel Kiik and Martin Helme
Tanel Kiik and Martin Helme

One of the most controversial issues of the recent coalition agreement is the proposed compensation payments to consumers to compensate for rising energy prices. The coalition parties have now agreed that household consumers will be able to buy electricity from Eesti Energia at a fixed price outside the market exchange, as a universal service, during the heating period (October to March inclusive), and which will be additionally compensated to a maximum of €50 per MWh.

Priit Sibul, member of Isamaa's executive committee, explained to evening news show 'Aktuaalne kaamera,' that the coalition agreement obliges Eesti Energia to offer the universal service, while other energy sellers can follow suit, if they wish. The exact price of the service must be approved by the Estonian Competition Authority.

"The price of the universal service is the cost price of Eesti Energia's production plus profit margins. Added to this are CO2  and VAT costs, and that is the price that the Competition Authority has to approve." Sibul said.

The universal service only applies to domestic consumers, with the coalition agreement additionally including subsidies of €50 per megawatt-hour (MWh) of energy use.

"In addition to universal service, an energy subsidy of €50 per MWh for the winter period, from October 1 to March 31, was agreed in the coalition talks," said Sibul.

Alongside electricity, district heating and gas consumption will also be partially subsidized.

"In the coalition talks, it was agreed that district heating would also be subsidized," Sibul added, explaining that the rate for this would amount €80 euros per MWh. Sibul also explained that for costs over €80 per MWh, consumers will be reimbursed for 80 percent of their bills. "It is the same for gas, where there is a threshold of 2.6 MWh," Sibul said.  

However, leading opposition figures from EKRE and the Center Party do not consider these measures sufficient to survive the difficult winter ahead.

Martin Helme, chairman of EKRE, said he had not yet seen the final text of the coalition agreement, but judging by what had appeared in media reports, had adopted a critical stance.

"In my opinion, it is a very half-hearted solution. I am fairly critical (of it). Let's start by making the price of electricity in Estonia very cheap pretty quickly - this requires a government decision to have Eesti Energia sell electricity to consumers at a fixed price."

Helme also called for the removal of CO2 costs from consumers' energy bills as a way of lowering overall prices. "This would bring the price of electricity down to around €30," Helme said.

"But now we see that the government is talking about something in the region of €130-150, in the winter period also, then some kind of compensation mechanism, along with this talk about electricity market reforms. I also don't see any tax reform in the coalition agreement that would be effective in lowering fuel prices," Helme added.

Tanel Kiik, deputy chairman of the Center Party, also said that he believed the proposed measures would not be enough this winter.

"I very much hope that, in addition to the ideas we have (already) heard regarding energy market reform, the coalition will also think about how to help people with escalating fuel costs. As well as rapidly rising electricity and central heating prices, other sources of heating are a problem, so energy support measures should be as far-reaching as possible this winter;" said Kiik.


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Editor: Michael Cole

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