Decoupling from Russian electricity grid to cost Estonian households €15 a year

Desynchronizing from the Russian and Belarusian electricity grid and synchronizing with the Continental European grid will cost a little over a euro a month on average per domestic end user in Estonia, or around €15 a year to be added to bills.
This is due to the need to maintain frequency on the Estonian grid.
Estonia is due to disconnect from the Russian power system and integrate into the Continental European electricity grid by the end of next week, Friday, February 8.
The transition away from Russia's power grid is a major step toward energy independence for Estonia, Latvia, and Lithuania, and, while inevitable anyway, has been hastened by the changed security situation in the wake of Russia's full-scale invasion of Ukraine.
Estonian grid distributor Elering has estimated that after the switch, maintaining the required frequency will cost the average household slightly over one euro per month.
This translates to approximately half a cent per kilowatt-hour extra for consumers, or the average household seeing an additional €15 on its annual electricity bill.
Until the end of June, the state-owned Elering will cover these costs itself, and after that, the financial burden will shift to both producers and consumers of electricity.
For the power system to function properly, grid frequency must be kept stable at 50Hz, something which requires maintaining a constant balance between electricity production and consumption.
If production falls short of consumption, or vice versa, frequency fluctuations can even damage sensitive electrical equipment.
To prevent this, power grids rely on frequency reserves — backup capacities that can quickly be activated to stabilize the system.
Four days before disconnecting from the BRELL grid, which all three Baltic states have been connected to, along with Russia and Belarus, these countries will open a joint frequency reserves market where electricity producers can bid on keeping part of their capacity on standby.
This standby power can be activated as needed to stabilize the system, ensuring grid balance during unexpected shortfalls during the transitional period.
Elering board member Erkki Sapp said: "Frequency reserves are necessary to replace lost production capacity in case of a power plant failure — when a significant amount of production suddenly disappears from the grid and must be replaced within seconds."

"The power system must always maintain a balance between consumption and production, or else the frequency will fluctuate," he continued.
"Starting February 4, we will begin procuring these frequency reserves together with our colleagues in Latvia and Lithuania to ensure enough emergency reserves at all times."
"These reserves are not activated daily, but only when necessary and in the required amounts," Sapp added.
Elering estimates that maintaining grid balance will cost Estonia approximately €60 million per year, though actual costs will be determined once the market is operational.
While part of the cost will be passed on to consumers, discussions continue on covering the remaining share of frequency reserve-related expenses.
In addition to consumers, electricity producers or balance managers (essentially electricity sellers) may also be required to contribute.
"Elering's proposal was that, since frequency reserve costs exist and must be maintained, these costs should be borne by both consumers and producers through their sales contracts," Sapp went on.
Latvia and Lithuania have proposed different cost distribution models, and discussions are ongoing to harmonize methodologies across the three Baltic states.
Lithuania has also been testing a market-based approach to frequency reserves since December, though its results do not necessarily foreshadow what will happen across the joint Baltic market in practice, after February 8.
Sapp noted: "The joint Baltic market will have different demand and different supply, and both will be shared among all three countries, so we cannot draw broad conclusions based on Lithuania's market results alone."
An explainer on the implications of the desynchronization from the Russian grid is here.
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Editor: Andrew Whyte, Mait Ots