Estonian govt okays amendments to Electricity Market Act

  • 2021-09-02
  • BNS/TBT Staff

TALLINN – The Estonian government on Thursday gave its nod to a bill to amend the Electricity Market Act and the State Assets Act, which aim to strengthen the functioning of a transparent and competitive electricity market and increase the possibilities for distributed generation.  

 In a press release, Minister of Economic Affairs and Infrastructure Taavi Aas described competition and equal treatment of all market participants as the cornerstones of the successful development of the Estonian energy market.

"This benefits both the consumer, who can be offered electricity at the best possible price, and society more broadly, as it allows to ensure the security of supply of the state and support the fulfilment of energy and climate policy objectives," the minister added.

To ensure equal terms of competition, the conditions for distribution system operators to operate on the market will be changed. For example, it will be prohibited for distribution system operators to provide free market services, including own and manage charging points and storage facilities for electric vehicles, and the dependence of distribution system operators on electricity generators and owners of storage facilities and charging infrastructure will be precluded.

An obligation to procure the services necessary to improve the network from market participants, without favoring one's affiliated companies, was also introduced.

In addition, the amendments introduce more precise regulation of small-scale electricity generation, which is primarily aimed at covering the generating party's own consumption needs. To this end, the conditions for operating on the market were supplemented for both active network service users and energy communities. For example, active network service users and energy communities have the right not only to produce for their own use, but also to provide their services in the procurement of flexibility services by network operators. 

The minister noted that small-scale production is especially important in low population density areas, and in order to give a boost to it, it is important that the legislation also creates a favorable groundwork for this. 

"It is usually quite expensive for a network operator to develop a network in sparsely populated areas, in which case it may be wise to generate and store electricity for one's own use. It will now become easier and less bureaucratic for such small producers to participate in the market," he said.

Aas added that this will expand opportunities for consumers and communities to decide how to ensure their own electricity supply and based on what principles electricity is consumed.

With the amendments to the Electricity Market Act, Estonia will transpose the directive on the internal market in electricity in the European Union. The amendments are scheduled to enter into force by the end of this year.