Electricity prices in Estonia have almost doubled over the past year, influenced by the increased demand during the hot summer – thanks to air conditioning units and refrigeration – and a rise in demand in general.
The average electricity price rose by EUR 40 just between March and April, while state-owned energy generator Eesti Energia reported that July’s price of EUR 83.78 per MWh was the highest since the market was liberalized around a decade ago.
In July 2020, the price was not much more than half that figure.
Karl Kull, a project manager at Tallinn University of Technology (TalTech), put climate as the main influencer, but from the perspective of the supply side in renewables, rather than the demand side.
Kull said: “These types of price fluctuations are the result of a so-called social contract or social want, in which we are becoming increasingly dependent, to some extent, on nature – wind, solar and hydro-power.”
“Inevitably, if some of these sources do not exist, or some of these cheaper production units are not able to generate at the moment, then production units, which are more expensive, do so instead,” he added.
Wind turbines can be found at various wind parks in Estonia, primarily on Saaremaa and the north coast, though some of the private sector developers say they have experienced obstacles from the state over the years.
Solar panel parks, while seemingly a counter-intuitive idea in Estonia, can also function, partly due to the long periods of daylight in summer. The axe has long been hanging over the largest hydro-electric power station in Estonia, the Linnamae station in Joelahtme, just east of Tallinn, and, while oil shale burning once supplied the bulk of Estonia’s electricity needs (along with some energy bi-products such as heated water, which would be piped into nearby towns such as Narva) at a low rate, it is now facing the squeeze due to the imposition of EU climate goals.
Burning wood, usually low-grade timber off-cuts, at power stations, while this sometimes happens, no longer constitutes a renewable energy source in the EU’s understanding, as it did back in the 1990s.
On the other hand, Estonia did reach its EU renewable target for 2020.
Estonia has no nuclear power station, though the idea has been regularly touted.
The high price levels are expected to last through to spring of 2022, which will mean high electricity bills in winter, with the possibility of prices exceeding the EUR 100-per-MWh-mark
Prices to consumer also depend on what package is being used, for instance index-linked versus fixed price.
Marti Jeltsov, who is tech manager at Fermi Energia, a company, which wants to develop a small nuclear reactor plant in Estonia, says that while the public needs to get used to higher prices, an issue facing all the neighboring countries too, monitoring use of electricity is recommended – the gap between higher night-time prices and daytime prices is even wider than before, he said.
Eesti Energia renewables subsidiary Enefit Green announced its output rose between June and July, from 53 GWh to 59 GWh, predominantly from wind energy. The electricity generated could supply up to 20,000 average households for a year, Enefit Green says. (ERR/Business World Magazine)
