Tallinn district heating supplier loses clients due to gas scarcity
As of October 1, district heating clients within the Adven network areas in Tallinn will be connected to the Utilitas network area, as the high cost of natural gas has resulted in a significant pricing disparity between the two service providers.
The purpose of joining district heating network areas of Tallinn's two major district heat providers is to offer a sustainable solution in a situation where record high natural gas prices have led to a significant discrepancy in heat pricing between network areas. The Competition Authority (Konkurentsiamet) has approved the interconnection of network areas.
Together Utilitas and Adven run four district heating network zones in Tallinn, supplying heat to the majority of district heating clients in the capital. District heating means hot water piped into many apartment blocks and commercial buildings and centrally controlled, providing warmth during the winter months, generally taken as October to March.
Whereas Utilitas district heating mostly uses biomass, waste heat, and natural gas to meet peak demand, Adven boilers are powered solely by natural gas, whose prices have been soaring in recent months.
Moreover, Utilitas has already begun stockpiling fuel for the upcoming heating season and has applied to the Environmental Board (Keskonnaamet) for permission to use shale oil temporarily. As the cost of fuel determines the price of heat, the introduction of shale oil will further help to offset the cost of natural gas.
"During an energy crisis, we must act quickly to assure both our business continuity and heat rates that are affordable for consumers," said Robert Kitt, chairman of the board of Utilitas Tallinn.
Two-thirds of the heat Utilitas supplies in Tallinn is produced from renewable energy sources, with natural gas used solely during colder months. This is why Utilitas heating costs during the recent heating season were twice cheaper than those of natural gas-only suppliers, Kitt said.
District heating customers within Adven's network areas in Tallinn will be connected to the Utilitas network. Utilitas Tallinn supplies heat to 4,200 buildings. In terms of volume, Adven customers now account for about 2 percent of annual heat consumption of Utilitas customers' in Tallinn. In total 251 buildings in the Nõmme, Põhja-Tallinn, Kesklinn, and Pirita districts, of which 154 are residential, are now those Adven's clients who will be connected to Utilitas.
With the change of service provider, heat supply will continue uninterrupted.
Utilitas and Adven signed the preliminary agreement for merging grids back in early June.
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Editor: Kristina Kersa