Next Year the Renewable Energy Charge will be 0.89 Cents per Kilowatt-Hour

Estonia’s transmission system operator Elering has confirmed next year’s renewable energy charge for consumers to be 0.89 cents per kilowatt-hour, an increase of 0.12 cents on this year.

The Chairman of Elering’s Management Board, Taavi Veskimägi, states that the renewable energy charge has decreased in recent years by a fifth, due to poor wind conditions, and the discontinued support of biomass electricity production at Eesti Energia’s Narva Power Plants, therefore making it possible to return to consumers part of the previously collected sum by means of a lower charge.

“Next year’s charge is in accordance with the renewable energy’s current subsidy level. A greater possible change in charges in the future is dependent on subsidy changes. When the respective changes in the Electricity Market Act come into effect in 2015, Elering will be able to recalculate the renewable energy charge during the course of the year,” Veskimägi explained.

In 2012, the renewable energy charge was 0.97 cents, last year it was 0.87 cents and this year it was 0.77 cents per kilowatt-hour.

According to prognosis, in 2015 the volume of subsidised electricity generated from renewable sources and in efficient combined heat and power (CHP) mode will be 1417 gigawatt-hours, which is close to this year’s level. The cost of subsidies will be 72.3 million euros in 2015.

Renewable energy forms 88 per cent and electricity generated in efficient CHP mode forms the other 12 per cent of the electricity energy receiving subsidies. Wind energy forms 48 per cent from the renewable energy receiving subsidies. Renewable energy produced from biomass in combined heat and power plants forms 37 per cent, and renewable energy produced from other sources forms 14 per cent of all the renewable energy receiving subsidies.

According to the producers’ data, statistics and Elering’s analyses, the amount of wind energy receiving subsidies next year will amount to the level capped by law which is 600 gigawatt-hours. The amount of renewable energy produced from biomass in big combined heat and power plants will supposedly decrease by 3 per cent, but the amount of energy produced from other sources will increase by almost 6 per cent compared to this year since new production equipment will be amongst those receiving subsidies. The estimated capacity of electricity produced in efficient CHP mode will remain at this year’s level.

According to the Electricity Market Act, Elering has an obligation to compile and publish by 1 December of every year the following year’s renewable energy charge. The price calculations are based on the estimated capacities of electricity energy produced from renewable sources or in efficient CHP mode (according to data provided by producers) and the cost of their subsidies, estimated consumer consumption for the next calendar year (taking the last 12 months net consumption as a basis), and surplus and shortfall of monies in the previous period.

Subsidies paid to the renewable energy producers are financed by electricity consumers through the renewable energy charge, paid by every end user in Estonia in accordance to their network service capacity. Elering acts as a payment agency by collecting the renewable energy charge from consumers, and paying renewable energy subsidies to electricity producers in accordance to conditions and subsidy levels enacted by the law. VAT is added to the renewable energy charge.

Elering is Estonia’s independent and standalone transmission system operator, whose main task is to ensure that Estonia’s consumers enjoy a consistent, high-quality electricity supply. To ensure the security of supply, Elering maintains and develops the domestic transmission network and external interconnections. Elering manages Estonia’s electricity system in real time, ensuring the functioning of the transmission network and the balance between output and consumption.