The price of district heating in the eastern border town of Narva is set to rise by 84 percent, to €88 per Megawatt hour, from the start of September, regional daily Põhjarannik reports.
District heating consists of centrally-controlled hot water piped into many apartment blocks, purely for heating purposes as its name suggests.
While district heating plants in, for instance, Tallinn, use fuels such as natural gas, Narva can utilize co-generation plants – meaning the hot water generated as a by-product of the activities of oil shale-fired power stations in the area can also be used for district heating purposes.
Narva Soojusvõrk, which provides Narva with its district heating and is a subsidiary of state-owned generator Eesti Energia, says a significant rise in input prices – namely CO2 quota prices and also high natural gas prices – is behind the increase, Põhjarannik reports (link in Estonian).
Pavel Rušeljuk, manager at Narva Soojusvõrgk, cited a €27 per tonne CO2 price and a €16 per Mwh natural gas price at the end of 2020, compared with €50-100 per Mwh for natural gas today.
District heating had in 2021 been capped at €47.80 per Mwh, but Narva Soojusvõrk was able to get permission from the Competition Authority to hike the price by 84 percent from September 1 this year.
The city's mayor, kartir Raik, called the development bad news both for residents and institutions, adding the city government is trying to find solutions including a request that the state provide support measures, to be funded by CO2 quota sales.
Heating season in Estonia traditionally runs October to March inclusive.
Soaring energy prices from the second half of 2021, gathering pace with Russia's invasion of Ukraine in February 2022, led to support measures being put in place first at local government level, in the winter of 2021-2022, then at state level the following winter.
District heating plants can burn other fuels in some cases, including wood chippings and even garbage.
Editor: Andrew Whyte, Mait Ots