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District heating cheapest in Narva, Karksi-Nuia and Lähte

District hearing piping.
District hearing piping. Source: Siim Lõvi /ERR

Narva currently enjoys the absolute cheapest district heating in Estonia and will remain one of the cheapest district heating areas even after the September 1 price hike.

Heating currently runs residents €39.83 per megawatt-hour (MWh) in Narva based on Competition Authority-approved pricing. Local paper Põhjarannik reports that this will climb to €73.35 per MWh after a looming price hike. But even so, Narva and the surrounding area will be among the cheapest places in terms of heating costs.

Following the price advance in Narva, heat will be cheaper in the Ovaal Maja area in Tallinn at €48.42/MWh and the Rae Technology Park in Harju County at €62.66/MWh.

Looking to larger district heating areas, the Karksi-Nuia area (€54.43/MWh) in Mulgi Municipality, Lähte small town area (€56.38/MWh) in Tartu Municipality and the Linnamäe and Pürksi villages areas in Lääne-Nigula Municipality (€61.36 and €62.34/MWh respectively) also offer favorable prices.

Peeter Vikman, member of the board of Lääne-Nigula Varahaldus AS, told ERR that cheaper prices are made possible by the use of sod peat.

"The price is a mix of the service and the source material, which is not particularly expensive. Neither are the production costs," Vikman explained.

Aigar Lepp, executive manager of Tartu Valla Kommunaal OÜ, said that the small town uses natural gas for its heating needs but did not shed any more light on details of price formation.

Member of the board of Karksi-Nuia Soojus OÜ Mikk Kullamaa told ERR that their cheap prices are courtesy of using local wood chips.

"We do not have the alternative of gas, while we can rely on liquid fuel backup," Kullamaa said, adding that the company tries to avoid using the latter whenever possible.

Prices the result of fuel, investments and sales volume

Eike Kingsepp, communication partner for the Estonian Competition Authority, said that heating providers can offer the service at below the approved price level should input become cheaper. The new price needs to be listed on the company's website.

She explained that prices tend to be cheaper in areas where heat is generated using solid fuels, such as wood chips or peat. Using syngas is also relatively cheaper, while natural gas or oil shale heat tends to be more expensive.

"Sales volumes, consumption density, volume and structure of investments also differ from one district heating area to the next," Kingsepp said. Therefore, the price is made up of many different factors, not just fuel.

District heating is most expensive in the Vändra heating area at €201.30/MWh before VAT, Kostivere (€163.68/MWh) and Rõngu (€132.95/MWh) areas.

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Editor: Marcus Turovski

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