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District heating prices could still rise after compensation measure ends

Boiler plant chimney in Tallinn.
Boiler plant chimney in Tallinn. Source: Siim Lõvi /ERR

District heating prices have gradually dropped over recent months and the compensation measure is due to end in April. However, the geopolitical risks that pushed up prices have not disappeared and customers may see their bills rising again in the future.

Prices shot up after Russia launched its full-scale war in Ukraine last year and natural gas prices, in particular, rose sharply. But the outlook is not so gloomy at the moment.

"Today it [prices] is back where it should be and, hopefully, it will normalize further," Margus Kaasik, head of Eesti Gaas, told Tuesday's "Aktuaalne kaamera".

The price of wood chips and other energy sources has also fallen, although not as far as.

This has allowed the cost of district heating to fall, said the Competition Authority, which regulates heating prices.

However, exactly when customers will feel the difference is dependent on the fuel source, said Külli Haab, head of the authority's regulatory service. Several have already applied to lower their prices.

The government's compensation measure, which pays 80 percent of the part of the bill which exceeds €80 per megawatt hour, will end next month.

But not all customers will have seen their bills fall naturally by then, as they would normally with the arrival of warmer weather.

"It depends on the specific price and the region. We can still compare it to where our new normal is heading. We don't know if we'll ever have another subsidy. As of today, we can say that these prices are relatively similar to where they were with the subsidy, or thereabouts," said Juhan Aguraiuja, head of Adven Estonia.

And prices could rise again.

District heating provider Utilitas Estonia board member Robert Kitt told AK: "I can't say that the crisis is over, that everything is forgotten. The war is still on. In this respect, in energy in particular, the main focus is on continuity, security of supply."

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Editor: Barbara Oja,Helen Wright

Source: Aktuaalne kaamera

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