Eesti Energia ready to implement incoming coalition electricity price plan

Enefit Poweri CEO Andres Vainola.
Enefit Poweri CEO Andres Vainola. Source: Ken Mürk/ERR

The head of Enefit Power, a subsidiary of state electricity generator Eesti Energia, says that boosting electricity production in the interests of combating soaring electricity prices can be done, but requires more accurate data on which to proceed.

The Reform Party, Isamaa and the Social Democrats (SDE) have agreed to provide universal electricity at a fixed price, along with subsidies during the heating season (October to March) as part of their coalition deal package announced at the end of last week.

Andres Vainola, board chair at Enefit Power, told ERR on Monday that: "Today, when we have three blocks under repair, we are offering the market 700 MW. We have managed to hire 300 people in three months, and we are doing our best to satisfy the increased demand."

Eesti Energia has the obligation to provide a universal service, while for other energy sellers this is optional, the coalition agreement states, while the price of the universal service must be approved by the Competition Authority.

Isamaa MP Priit Sibul said: "The price of the universal service is formulated by the cost price of Eesti Energia's production plus the profit margin, to which CO2 is added, while VAT is added to that, and this is the price level that must be approved by the Competition Authority."

The agreement also provides for a subsidy of €50 per MWh, for the heating period (October 1 to March 31), Sibul added.

Andres Vainola said that the information was so new that he did not know much more than the public did. The company sells 100 percent of generated electricity to the stock exchange, he added.

Enefit Power has seven power plants, three of which are hybrid power plants while four are older units, Vainola added, noting that 85 percent of the MWh of the electricity produced and sold by the company goes on environmental taxes, mainly CO2 tax.

"This proportion of the tax is a political decision and we deliver within the framework of existing agreements and regulations," he said. 

"We'll have to wait for that, it's probably partly related to CO2 release. As to whether there will also be any regulatory changes and coordination from outside Estonia demanded, the near future will tell."

Margus Kasepalu, head of the energy infrastructure department at the Competition Authority (Konkurentsiamet), told ERR that once the authority receives precise instructions, they will be ready to act immediately, adding that it was too early to say exactly to what extent the changes will affect the market longer term, or how it would affect private households, who constitute about a fifth of peak-time consumption.

Reform, Isamaa and SDE agreed that household consumers would have the opportunity to buy electricity from Eesti Energia at a fixed price as a universal service from the stock exchange in order to mitigate the rise in energy prices. 

The agreement was struck last Friday following over a month of talks, with energy policy being one of the major issues.

Monday saw the highest per-MWh electricity price of 2022 so far, exceeding the €500-mark at times.


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Editor: Andrew Whyte

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