Consumers in Estonia paid over €850 million more for electricity in 2022

Tallinn. Source: Siim Lõvi /ERR

Consumers in Estonia paid an extra €850 million for electricity last year, totaling €1.5 billion. The state paid out €200 million in subsidies to alleviate rising prices.

The average market price of electricity was 19.2 cents per kilowatt-hour last year, more than double 8.5 cents per kilowatt-hour in 2021, data from the Ministry of Economic Affairs show.

In 2021, the total cost of electricity was €685 million, rising to €1.5 billion in 2022.

Electricity consumption was measured at approximately eight terawatt-hours for both years.

"Comparing 2021 with 2022, whether residential or business, all in all, it cost around €800-840 million more, which is a huge, huge cost," Rein Vaks, head of the Ministry of Economic Affairs' Energy Department, told Thursday's "Aktuaalne kaamera" (AK).

Lights. Source: Siim Lõvi /ERR

The price of gas rose by 123 percent last year but consumption decreased from five watt-hours to 3.5 watt-hours.

Rising prices were compensated by the government throughout the year, Vaks said.

"There were significant savings, we paid out over €100 million in subsidies, a significant amount. At the end of 2022, we had an additional €50 million in subsidies for district heating, gas and electricity," he told AK.

The universal electricity service, introduced in October, saved consumers €36 million in three months, Vaks said. Funding came from the government's reserves and proceeds of CO2 sales.

High inflation — which was over 20 percent for the majority of the year — was largely caused by record energy prices.

Electricity pylons. Source: Siim Lõvi /ERR

Bank of Estonia economist Rasmus Kattai said inflation could have been as low as 2 or 3 percent without it.

The rapid rate of inflation is expected to slow this year and Estonia's inflation fell to 17.5 percent in December.

"Last year, month-on-month price growth stopped at the end of the summer. So there was no significant change in price levels in Estonia in the autumn months until the end of the year. Inflation is already on a downward path, as we have seen, and will recede this year," Kattai said.

He said it may fall below 10 percent in the summer.


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Editor: Marko Tooming, Helen Wright

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