Gren Eesti, the district heating provider in Tartu, will raise the price of heat by nearly 10% next month. The company says the price increase is necessary to cover operating expenses and investment costs.
While the current sales price of heat for Tartu residents is EUR 58.97 per megawatt-hour, in a month it will rise to EUR 64.69, plus value-added tax.
This means the consumer will end up paying nearly EUR 80 per megawatt-hour.
Gren Tartu board chairman Margo Kulaots said the change was needed due to rising operating costs over the past four years. Investments to improve reliability also need to be made.
“We have installed electric generators in boiler houses in case of power outages; we have enabled the use of liquid fuel in case there is a crisis with gas, for example – and all of this costs money,” he told “Aktuaalne kaamera”.
“Another important point is that our operating costs, as reflected in today’s heat price, are still at the level of four years ago, and all goods and services that have become more expensive for others over the past four years have also become more expensive for us,” he said.
Kulaots said it would still be 33% cheaper than the Estonian average. Due to this, the number of Gren Tartu customers in the city has grown rapidly in recent years. Since 2022, the City of Tartu has transferred the majority of its properties to district heating.
“If we are talking about this latest price increase, which is about 10%, then the impact on our budget is around EUR 250,000 per year – meaning we will have to find additional resources in the budget. But this concerns all buildings owned by the city. At this point, we don’t yet have a concrete plan in response to this fresh news, but the budgeting process is still ongoing, so we’ll take this into account both in this year’s supplementary budget and next year’s budget,” said Tartu Deputy Mayor Raimond Tamm.
While the district heating price for consumers is increasing, Gren Tartu’s profit for the most recent financial year, 2023, was over EUR 22.5 million. The year before, it was EUR 11.6 million – half that amount.
Kulaots said operating profit was lower in 2022 because during the energy crisis, heat was sold at a lower price than it should have been. He also noted that the company’s profits are not solely from the heat business.
“We do not just produce heat and deal with district heating, we also produce electricity and have subsidiaries, such as Gren Viru in Virumaa. Total profit doesn’t depend only on what’s sold to heat consumers in Tartu,” he said. (ERR)