Estonia's Elering wants to change pricing, increase network fees for power transmission

TALLINN - Estonian state-owned transmission system operator (TSO) Elering has submitted an application to the Competition Authority requesting to increase the network charge for power transmission from 2021, Postimees reports.

The competition authority's press spokesperson, Maarja Uulits, said that Elering had sent the application requesting to increase the network charge on average 7.9 percent on March 15. Elering also wants to introduce a two-tariff system, with regard to which the Competition Authority has conducted public consultations.

"These is a complicated procedure and the authority has at least six months to formulate its position," Uulits said.

According to Elering, the TSO wants to switch to a new price structure, which in addition to the electricity transmission fee also calculates capacity and location based fees.

"This need stems from rapid changes in the structure of the energy system, as a result of which the transmission network also has an increasing role in ensuring security of supply in addition to transporting energy," Katlin Klemmer, spokesperson for Elering, said.

A large network will remain a necessity to ensure security of power supply for times when local wind and solar energy output is low. Together with the development of dispersed power production, the network can be optimized and rendered "thinner", resulting in lower network fees for consumers in the future, according to Klemmer.

"A large share of the network fee is made up of investments that are made according to the capacities agreed upon in network agreements with customers. If the capacities are optimal, the network fee, too, will be optimal," she said.

Taavi Veskimagi, chairman of the management board of Elering, said that the TSO's biggest challenge is the integration of the Estonian and Baltic electricity systems. Estonia is currently part of the Russian electricity system and plans to join the continental European system from the start of 2026.

Veskimagi told Postimees in April that it would not entail an additional increase in network fees, rather the contrary. 

Klemmer said that the change in the network charge price structure is not directly related to the synchronization.

"In the project that will see our electricity system synchronized with the continental European frequency area, our investments are largely funded by the European Union and the rest will be covered from congestion income; thus, it will not affect the consumer," she added.