Estonian Electricity Market To Be Opened Up To Competition

As of 1 January, 2013, Estonia’s electricity supply market will be privatised and opened up to competition thus making it one of the last erstwhile state monopolies in Estonia to be privatised.

As a result, electricity prices will be set in accordance with the Nord Pool spot power exchanges, which comprises some 350 electricity suppliers in the Baltic Sea region, rather than set by the state.

It seems likely that the change might lead to some initial increase in prices. According to the Eesti Energia website, who currently have the monopoly on electricity supply, “..the average exchange price in 2011 suggests that a household with an electricity bill of 15 euros per month would have to pay an extra 2.5 euros per month. This also includes the change in VAT”.

The open market does not affect the electricity excise and renewable energy fees because these are calculated from the electricity consumed, the Eesti Energia website stated.

However, since the quantities of electricity traded on the Nord Pool exchange are vast, measurable in Megawatt hours (MWh) rather than Kilowatt hours (KWh) and change on an hourly basis, it is impossible to accurately forsee electricity prices after this liberalisation, the Eesti Energia website went on.

If a householder does not indicate a preference as to supplier after January 2013, they will not be cut off but rather their electricity will be supplied by a ‘universal service’ based on the average power exchange price from the previous month, the Eesti Energia website states.

Naturally, the increased competition and range of choice available to customers suggests more competitive prices being offered in electricity supply in the future, although electricity prices on a global scale are increasing.

Goodson & Red Tallinn Property Consultancy is a premier residential and commercial property service based in Tallinn, Estonia, with a strong focus on consultancy services for overseas property investors. Our recent media accolades include mentions in both the UK quality newspaper the Daily Telegraph, and the New York Times.

One thought on “Estonian Electricity Market To Be Opened Up To Competition

Leave a Reply