Network development and fixed connection fee

To achieve this goal, new renewable electricity generating capacities need to be built and connected to the network. This requires changing the concept of connecting to the transmission system so that the network could be developed to be ready for the producers.

To meet this goal, we need to build approximately as many power plants generating renewable electricity by the end of this decade as we currently have power plants connected to the network.

If we double the generating capacity of power plants connected to the network, their annual electricity output is approximately 10 terawatt-hours, which corresponds to the estimated consumption volumes in 2030 (without accounting for the addition of potential major consumers in Estonia).

In order for us to connect the necessary number of new power plants to the network by the end of the decade, we need to change the principles of connection and start developing the network to be ready for it. Otherwise, we will not be able to achieve the goal of generating capacity by 2030.


 

Estonia’s electricity consumption forecast (in Estonian)

 

Network developments

To connect power plants on a larger scale in the last years of this decade, the necessary activities to build network reinforcements in the transmission network must begin no later than in 2025. To this end, the logic of connecting to the electricity network must be changed and the construction of the network must commence years before a specific client connecting to the network reaches Elering with their connection application. To connect the necessary power plants to the network, network investments in the estimated amount of 300 million euros will need to be made. The principal share of the reinforcement concerns the existing 110-kilovolt network, to which the majority of generating capacities to connect by 2030 will be connected. Elering plans to reinforce only the existing network as part of its development obligation. If the new power plant to be connected is located further away from Elering’s existing network, the client planning to connect to the network is required to build the connection from the power plant to Elering’s network themselves.

Read an article about the concept of the pre-development of the electricity network (in Estonian)

 

 

 

Future connection speed

Once the development obligation applies, the duration of connection depends only on the deadline for the constructing of the connection point.

 

New principles for connecting to the network

According to the new proposal, all clients to connect to the network will pay a fixed fee, which makes the clients’ development activities easier.

It makes it possible to know long in advance and exactly how much the connection cost of each specific project will be when drawing up business plans. According to the concept, one part of the fee is for the construction of the connection point, which depends on the voltage level and technical configuration of the connection point, and the other part of the fee is related to the size of connection capacity.

Since consumers will also benefit from the reinforcements of the electricity network to be made in order to connect production (for example, an outdated line will be renovated), half of the costs of network reinforcements are planned to be covered from the network service fee. This approach means that clients to connect to the network will pay half of the total cost of the necessary network reinforcements. The other half of the costs will be borne by electricity consumers through network service fees, in return for which they receive a more reliable electricity network and a more affordable electricity price due to renewable electricity. 

In order to make the cost of connection more competitive and to provide the client with price certainty, the new concept states that production can begin as soon as the connection point is completed, even if all investments related to the reinforcement of the network have not yet been completed. In this case, there may be a need to limit production if the electricity network is overloaded. If limitation occurs, producers will be compensated for the price of electricity not produced at market price.

In summary, the new concept is accelerating network connection and ensuring price certainty through a fixed connection fee. A producer connecting to the network must pay the costs of establishing a connection point, fixed at the average price, and half of the cost of network reinforcements, which are estimated to be 12,000 euros in the 330 kW network and 65,000 euros in the 110 kW network per megavolt-ampere (MVA), and the amount is paid as a single instalment following the entry into the connection contract. 

 

 

Security of supply solution based on renewable electricity is the most affordable for consumers

The increase in the share of local renewable electricity supports security of supply and ensures that consumers have access to electricity at a more affordable price for the majority of hours in the future.

The most expensive way to generate electricity is an isolated power system based on fossil fuels.  The most affordable renewable electricity for consumers comes from solar parks and onshore wind power plants. Because the sun isn’t shining and the wind isn’t blowing all the time, we need to connect up to three times more renewable energy generating capacities than peak consumption in the network.

In times when there is not enough wind and sun and not enough affordable renewable electricity is coming from neighbours through international connections, controlled power plants will help to ensure security of supply. Gas stations are probably best suited for controlled power plants due to their low investment costs, but because gas is an expensive fuel, it is more beneficial for consumers if these stations operate as little as possible. Storage helps to reduce the operating time and overall costs of gas stations, keeping electricity prices lower.

Although the implementation of the new concept will increase the network service costs for an average private electricity consumer by about five euros per year, the higher share of more affordable renewable energy will ultimately reduce the consumer’s electricity costs.