Universal electricity price provisionally set at 15.4 cents per KWh

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The price of electricity in Estonia under a universal service recently rolled-out by the government will provisionally be €154.08 per Megawatt-hour, or 15.4 cents per KWh, the Competition Authority (Konkurentsiamet) says.

While VAT and suppliers' profits and margins must be added to this figure, a €50-per-MWh support measure put in place separately must also be applied to the final price to domestic consumer, which means the ultimate price level is likely to be €130-€140 per MWh.

The authority's director, Evelin Pärn-Lee, said that talks with state generator Eesti Energia had not been easy, given the company had requested a price of €181.83 per MWh.

The agreed price of €154.08 has been provisionally approved and is exclusive of VAT and profit margins and those of electricity sellers, which, when applied, will likely give rise to a price of €180-190 per MWh to the consumer, or 18-19 cents per Kwh.

Pärn-Lee: CO2 price fell while negotiations with Eesti Energia were ongoing

Appearing on ETV morning show "Terevisioon" Friday, Pärn-Lee, said: "This €154.08 euros is a temporary price level. 55 percent consists of the price of CO2, which today is slightly more than €60, but when Eesti Energia's subsidiary Enefit Power submitted the request, it stood at almost €90. Potentially, the price of CO2 is volatile," explained Pärn-Lee in "Terevision".

Energy support measures which the government put in place ahead of autumn and winter means the final price of electricity will be cut by a further €50 per MWh, making the projected price at around 13-14 cents per Kwh.

Pärn-Lee added that a certain range of price fluctuations is written into the coordinated production price for suppliers, to avoid them needing to start re-coordinating the price after every small fluctuation. 

At the same time, she did not rule out Eesti Energia starting to submit a corresponding request every month. 

According to Pärn-Lee, whether the agency coordinates these is a decision that must be considered each time.

Meanwhile Minister of Enterprise and Information Technology Kristjan Järvan (Isamaa) told ERR radio show "Vikerhommik" that the Competition Authority and Eesti Energia had different visions when coordinating the production price of the universal service, but the authority had put the consumer first.

"It does indeed seem that the Competition Authority fought for the interests of the people," Järvan said.

A bill aimed at putting the universal price, which applies to domestic consumers only, passed earlier this month, though setting the price level was a matter for the Competition Authority and its negotiations.

Eesti Energia generates electricity and is also one of several suppliers.

Prices as quoted on the Nord Pool exchange had set and re-set records over the past year, reaching a peak of €4,000 per MWh for one hour in mid-August, while temporary support measures were already put in place for all types of energy to consumer, last winter.

Support measures will be applied automatically to electricity, natural gas and district heating bills this winter.

Heating season traditionally runs October 1 to March 31 inclusive, ie. it starts tomorrow, Saturday.

This story was updated to include quotes from Evelin Pärn-Lee and Kristjan Järvan, as well as information on the energy support measure deduction.


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Editor: Andrew Whyte, Urmet Kook, Liisu Lass, Huko Aaspõllu

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