While shifting the peak consumption and addressing the formulation of natural gas market prices are steps in the right direction, the lack of solutions from the European Commission for reducing electricity exchange prices as announced by commission President Ursula von der Leyen at the annual state of the union address Wednesday were a disappointment and consisted of short-term measures, Minister for Economic Affairs and Communications Riina Sikkut (SDE) says.
Estonia had hoped for quick solutions, the decoupling of the price of natural gas from that of electricity, and a price ceiling on natural gas of Russian origin, which also did not materialize.
Sikkut told ERR radio news show "Uudis+" that: "The fact that there are binding targets for reducing peak consumption (for member states) and the goal of dealing with gas price formation – this is very good.
"However, in order to bring down the natural gas stock market price – what we really need from tomorrow would be that gas does not drive the price up and people and companies should not pay large bills."
"Shifting the peak consumption to some extent gives this effect, but to decouple gas from the development of the price of electricity, so that the monthly average is not pushed beyond €300-400 per MWh, that was actually my expectation to the European Commission. This is the one that could have been addressed," she went on.
The proposal to shift peak times away, during winter months, from the times with the actual highest consumption levels was a step in the right direction, she added, but solutions should be automatic via consumption control, either built in to the stock market's operation, or in the services sold on the market, for instance to industry, which can control its consumption by time, in line with the stock market price.
An upper limit of €180 per MWh would also bring with it the risk of those electricity producers with higher production costs not bringing their production to the market.
"After all, the real concern is the lack of energy production on the European market. Fortunately, oil shale and coal plants are outside of this €180 level, but this also concerns co-generation plants, wind and solar energy producers," Sikkut said.
"How to assess whether they, according to the share of fixed-price contracts, have earned additional benefits and how then implement them. These details are very important - how to implement it and the share of the collected revenue is," she went on.
Collecting the so-called excess revenue would mean a maximum of €200 million for the Estonian state, she added, will not bring down the price of electricity in any way. "It does take away the profit, but the fact that people and companies have to pay higher bills remains the case. In this sense, this solution is a disappointment for Estonia," she noted.
Not setting a price ceiling on Russian natural gas was also disappointing, she said.
The collection and redistribution of excessive profits of energy companies.
According to the Commission's proposals, companies producing electricity from renewable sources should hand over income to the state from €180 per MWh, which the state would use to finance aid measures intended for citizens. A crisis tax would also be imposed on gas and oil companies, which must pay a 33 percent solidarity tax on the current year's profit if that is 20 percent higher than its average of the last three years.
Editor: Andrew Whyte