Estonia spends €32 million on energy compensation measure over two months

Tallinn. Source: Siim Lõvi /ERR

Estonia spent €32 million on three different energy compensation schemes and the universal electricity service in two months, while the sum could grow still. The Environmental Investments Center has been allocated €153 million for the instruments over six months.

The Ministry of Economic Affairs and Communications was ordered to pay home consumers temporary energy expenses benefits from October 1.

The benefits go through electricity, gas or heating providers that will lower the end price for the consumer, with the price difference covered by the Environmental Investments Center (KIK). The agency has been allocated €153 million for the instruments between October 1 and March of next year.

The compensation sum of €32.1 million for October and November is not final yet and is likely to grow. The sums for December will become clear by mid-January, ERR learned from the ministry.

Most money spent on electricity

State compensation for electricity bills in October and November came to €17.4 million, which sum is set to grow as new applications for compensation have been filed. This also includes the universal electricity price component.

Home consumers are compensated for up to five cents per kilowatt-hour (kWh) of the monthly average price of electricity, VAT excluded, when it exceeds 8 cents/kWh. For example, if a consumer buys electricity at the monthly average price of 15 cents/kWh, they have to pay 10 cents.

The price of Eesti Energia's universal service is between 19 and 20 cents/kWh with VAT. Because the universal service is more expensive than the benefit limit of 8 cents/kWh, the five-cent benefit is also extended to universal service customers.

The average market price of electricity (VAT excluded) was 17.4 cents per kilowatt-hour in October ad 21.9 cents/kWh in November.

The ministry calculates that the benefits reduce an average consumer's energy bills by 21 percent.

District heating least significant component

A total of €9.4 million in compensation has been paid for natural gas, which figure could also grow.

For home consumers of natural gas, Estonia compensates 80 percent of that part of the average monthly price that exceeds €80 per megawatt-hour (MWh) or €0.7744 per cubic meter. The maximum compensation is 2.6 MWh or 251.7 cubic meters. The calculation represents an average private residence's monthly consumption.

The compensation for district heating providers came to €5.3 million in October and November.

District heating customers also see 80 percent of the price when it exceeds €80/MWh compensated. For example, Tallinn's maximum heating price of €97.15 drops to €83.4 for the consumer.


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Editor: Marcus Turovski

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