TALLINN - Eesti Energia managers are weighing a proposal to forego the EU-mandated grace period and open up the electricity market.
The director of the Estonian Energy Market Inspectorate, Margus Kasepalu, told the daily Postimees that the idea was expected. "When the cable to Finland is completed, Eesti Energia may wish to have more freedom of action in the Nordic countries," he said.
Eesti Energia board member Margus Kaasik said that although the state-owned company would lose clients at home, it could finally export energy to the Nordic countries.
Since Estonia was awarded special terms during EU membership negotiations, the Baltic state can postpone the introduction of its electricity market until 2013. Estonia had argued that it needed a "grace period" to make the necessary investments in its large oil-shale fired power plants.
If the market is closed, energy imports are banned, and the state controls not only the price of electricity in the power grid, but also power plants' output price. If it is opened, the Energy Market Inspectorate would no longer have control over power stations and imports, but the price of transmission would remain under its control.
Eesti Energia reportedly wants the market to be opened in January 2009, although an earlier date cannot be ruled out either.
The company is currently engaged in two large international projects: An underwater cable connecting Estonia and Finland that is due for completion at the end of this year, and a new nuclear power station in Lithuania. (See story on Page 6.)
Eesti Energia would like to control at least a quarter of the new generating facility in Lithuania, Kaasik said. And the underwater cable will offer Baltic energy companies the possibility to enter the Nordic market.
Once the market is opened, Estonian electricity consumers will no doubt see a price rise. On Feb. 22, a kilowatt-hour of electricity cost the equivalent of 0.70 Estonian kroons at the Nordic energy exchange Nordpool, compared with 0.42 kroons charged by Estonia's Narva power stations.
Speaking on behalf of Fortum Elekter, a subsidiary of the Finnish energy group Fortum, which runs electricity distribution operations in parts of Estonia, manager Are Veski said Eesti Energia currently owned over 90 percent of the generating capacities in Estonia.
"It would take years before new producers of electricity arrive on the market here, because right now new investors don't have enough clarity on whether the political will to actually have a (free) electricity market exists," Veski said.
