Sikkut on electricity market reform decision: It's not for forever

Minister of Economic Affairs Riina Sikkut (SDE).
Minister of Economic Affairs Riina Sikkut (SDE). Source: Siim Lõvi /ERR

When the new coalition reached an agreement on the electricity market reform, it did not decide how long the measure offering universal electricity service would remain in place, incoming Minister of Economic Affairs Riina Sikkut (SDE) said Monday. Sikkut believes the impacts of the measure should be assessed after the fact, and the reform then adjusted accordingly.

"On one hand I believe that if just one decision should have been made during coalition negotiations, then it would be energy compensation for the fall-winter period," Sikkut said hours before being sworn in as minister alongside the rest of Prime Minister Kaja Kallas' (Reform) second government on Monday.

"Thankfully that decision came, so actually all [three] coalition partners have the understanding that when it comes to electricity, natural gas and district heating, we'll likely be seeing prices that we can't expect people to be able to mitigate the risk of themselves," she continued. "It's not possible taking savings and incomes into account. Even if you're very responsible and make decisions for the long term, when you installed the heating system in your home 15 years ago, you couldn't have possibly foreseen the current situation."

Sikkut noted that this upcoming winter, the state will be providing more support than last year.

"There is no cap on district heating; as much district heating as is needed to keep a room warm, that's exactly how much will be compensated as well," she said.

The new minister said that it's not possible to predict what proportion of household consumers will be affected by the planned electricity market reform, or whether everyone will want to pay for electricity as a universal service. She noted, however, that the coalition hasn't decided that the system to be implemented in the reform will remain forever.

"[Reform, Isamaa and SDE] didn't make this decision for forever," she stressed. "The fact that it's one possible means of surviving the current crisis — that people would have electricity for a mostly affordable price — this was seen as a temporary solution. The question is how it will be implemented on October 1 — what proportion [of people] will it start to affect? That impact can be assessed after the fact, and decisions then made accordingly."

Sikkut said that the coalition's decision regarding energy compensation was made for the upcoming fall-winter period, and added that its decision regarding the electricity market reform would need to be considered over a longer period of time.

"What Estonia's electricity market will end up being in the long term, we can assess after the electricity market reform is implemented as well," she said.

Nonetheless, she doesn't find it realistic to include an explicit deadline in the relevant market reform legislation. "As such, I personally support analyzing the impacts and making adjustments accordingly following the reform," Sikkut said.

The electricity package to be offered in the course of the reform may not always be cheaper than the market price either, she acknowledged. "When we build [Estonia's] renewable energy capacities, we'll see other producers, and different prices. Why should it be a fixed contract in accordance with Eesti Energia's current costs?"


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Editor: Aili Vahtla

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