Elering to reduce renewable energy charge from 1 January 2018

Elering will reduce the renewable energy charge by 14 per cent to 0.89 cents per kilowatt-hour from 1 January 2018. With the reduction of 7.6 per cent in Elering’s service charge on 1 July this year, this is the second price reduction this year, which should reduce the final electricity price for consumers.

Elering’s management confirmed that, on the basis of next year’s consumption and renewable energy production forecasts, the renewable energy charge will be 0.89 cents per kilowatt-hour. This year, the charge has been 1.04 cents per kilowatt-hour. The reduction in the renewable energy charge will be reflected in all end consumers’ invoices, as under the legislation, renewable energy subsidies are financed through the renewable energy charge paid by electricity consumers.

“Looking at the decrease of a total of 15 per cent in the Elering network service charge in recent years, and today’s reduction of 14 per cent in the renewable energy charge, it is important to note that, contrary to the general perception of electricity service prices’ continuous increase, electricity services prices move both up and down,” said Chairman of the Elering Board, Taavi Veskimägi.

Next year, renewable energy subsidies are predicted to total 74.6 million euros, and subsidies for efficient combined heat and power will total 4.5 million euros. A total of 1,390 gigawatt-hours of electricity is expected to be produced from renewable sources, and 140 gigawatt-hours from combined heat and power (CHP).

The share of renewable energy as part of total consumption is expected to be 17 per cent, as compared with the target of 16.1 per cent previously set by the state.

Based on the forecasts, the largest part of the renewable energy subsidies, or 49.8 per cent, will go towards subsidies for the five largest biomass cogeneration plants. Renewable energy produced from wind power will receive 43.2 per cent of subsidies. The remaining support will be shared among other biomass and biogas plants, as well as hydro and solar energy producers.

The Electricity Market Act imposes an obligation on Elering to administer renewable energy subsidies. Elering acts as a payment agent, paying out subsidies to renewable energy producers in the amount and under terms prescribed by the law. In order to finance the subsidies, electricity distribution networks and direct line operators collect the renewable energy charge from end consumers and transfer it to Elering, which confirms the total amount by 1 December of the preceding year.