Estonian TSO updating network charges principles from start of new year

Elering's synchronous compensator in Püssi, Estonia's first.
Elering's synchronous compensator in Püssi, Estonia's first. Source: Rene Kundla/ERR

From January 1, 2024, Estonian transmission system operator (TSO) Elering is introducing new price plans for electricity transmission services aimed at offering customers, including storage devices, a more flexible price model and distributing the costs of maintaining the transmission network more fairly across various customer groups, the company announced.

These changes were approved by the Competition Authority last Thursday, September 28, the TSO said in a press release. The allowed revenue and the average network charge for transmission service agreed upon with the Competition Authority remained unchanged; only the electricity consumed from the grid will be charged, while supplying energy to the grid will remain free of charge.

This change will affect key customers connected to Elering's transmission network — some 30 companies, including primarily electricity distribution networks and a few large electricity consumers.

While Elering has previously collected the money needed to maintain and develop the electricity transmission network in the form of energy-based transmission fees, from January 1 onward, customers will be able to choose between a fully fixed plan or a partially fixed charge plan.

"The energy system is changing rapidly," Elering CEO Kalle Kilk said. "The share of distributed generation and renewable energy is gradually increasing, and as a result, the electricity transmission network is becoming a security of supply provider. The structure of network charges needs to keep up with this change. Price plans must offer customers the opportunity to choose the most suitable solution for their business while also ensuring that the electricity system as a whole continues operating safely and securely at all times."

Kilk highlighted that the planned change will also reduce inequality by eliminating the situation where customers who use the transmission network on a regular basis essentially pay the network connection costs for customers who only use the transmission network for a few hours as a backup and contribute only modestly to the maintenance of the network.

"On the other hand, the new charge structure will allow large storage devices, such as battery tanks and hydro accumulation stations, to enter the market, where the same amount of energy moves through the grid twice and for which the current energy-based charge is therefore not commercially appropriate," he added.

According to the TSO, its customers can optimize the use of their connection capacities, i.e. give up capacities that aren't actually being utilized. In this way, freed up capacities could be redirected to new connectees, or network maintenance and upgrade costs could be saved on places where freed up capacities will not be used in the future.

The new transmission charges will remain the same year round, marking a change from the current system, under which charges are higher in winter than in summer.

Elering has worked on preparing the announced structural change to its transmission charges since 2018, with several public consultations with market participants taking place along the way. The latest public consultation carried out by the Competition Authority ended in mid-August.


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Editor: Aili Vahtla

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