The Renewable Energy Charge for 2012 is 0.97 cents/kWh

Forecasts by Elering, the Estonian TSO, show that next year’s renewable energy charge to consumers is 0.97 euro cents per kWh, which is higher than this year’s charge because of the increased levels of production from wind and biomass.

Under the Electricity Market Act, Elering must publish the renewable energy charge for the next year on 1 December each year. The calculation of the charge uses data submitted by producers to predict the amount of electricity that will be generated in the next year from renewable sources or in efficient CHP plants and the level of subsidy that this qualifies for. It also considers the consumption forecasts for the next calendar year, using the net consumption of the previous 12 months as a base, and the excesses and shortfalls during the 12 months.

Elering expects total production from renewable sources and efficient CHP generation to be 1455 GWh in 2012, which means that the total amount paid out in subsidies will be more than 74 million euros. Elering’s forecasts show that the renewable energy charge for next year will be 0.97 euro cents per kWh, up from 0.615 cents per kWh this year.

Biomass is used to generate 59% of the renewable energy qualifying for the subsidy, wind power generates 35%, and 6% comes from hydro power, waste and black liquor, a by-product of the wood and paper industries. Electricity generated in efficient CHP plants will qualify for subsidies of around 5.2 million euros.

Data from producers and from Elering’s analysis show that the largest rise next year will be in wind-powered electricity production, which will receive almost 73% of the total subsidy, and in electricity produced from biomass, which will take 15% of the subsidy. The production from efficient CHP plants is expected to increase by 7%.

In 2010 renewable energy covered 9.7% of total consumption, and its share for next year is predicted at more than 14%. This means that Estonia will be very close to the goal of increasing the proportion of electricity produced from renewable sources to 15-20% by 2020.

The renewable energy charge uses money from electricity consumers to finance the subsidies paid to producers of electricity from renewable sources, and it is paid by all consumers in Estonia in proportion to their consumption of network services.

Elering is the payment agent who collects the renewable energy charge from all consumers and uses it to pay the legally required subsidy for renewable energy to producers. VAT is added to the renewable energy charge.

Elering is the Estonian Transmission System Operator, whose main duty is to ensure high-quality supplies of electricity to consumers at all times. To achieve security of supply, Elering maintains and develops the national transmission grid and international connections. Elering controls the Estonian electricity system in real time, ensuring the operation of the transmission network, and the balance between production and consumption.