Establishment of tariffs for electricity produced
from renewable energy resources
Country:
ESTONIA
Regulatory body: ESTONIAN
COMPETITION AUTHORITY
Establishment of tariffs for electricity produced from renewable energy
resources
1. Who regulates the sphere of
renewable energy resources
(RES):
•Government
•Estonian Competition Authority
(regulator)
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Establishment of tariffs for electricity produced from renewable energy
resources
2. What kind of RES exist in your
country?
1) Hydro energy:
•
2)
3)
4)
5)
6)
SHPP, built on the rivers
Wind energy
Solar energy
Landfill gas and biogas
Biomass and peat
Waste
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Establishment of tariffs for electricity produced from renewable energy
resources
3. Tariff calculation principles of
RES
Subsidies
Supporting is regulated by Electricity Market Act.
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Establishment of tariffs for electricity produced from renewable energy
resources
4. Which are the main factors
considered in the applied
methodologies?
Subsidy for electricity must enable the producer to
cover reasonable costs:
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for fuel (not above the market price);
to fulfill obligations from legislation and
an activity lisencing conditions;
for capital expenditure;
ensure a reasonable rate of return from invested
capital.
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Establishment of tariffs for electricity produced from renewable energy
resources
5. Advantages and disadvantages
of RES
-
the customer shall bear the expenses
arising from financing of the support
+
ensuring energy security through the
local RES
environmental conservation
+
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Establishment of tariffs for electricity produced from renewable energy
resources
6. How is the rate of return
calculated in the tariffs for RES, set by
regulator?
The rate of return calculated to the subsidy through the
invested capital.
7. Actual Rate of return
Actual average rate of return (%) depends on the market price
of electricity, together with subsidy. Estonian Competition Authority
position is that the rate of return should not be above 10%.
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Establishment of tariffs for electricity produced from renewable energy
resources
8. How often are the tariffs for RES
reviewed?
There have been many amendments in the
Electricity Market Act regarding the RES.
Almost every year was changed the
circle of producers who have the right
to receive supports for RES depending
method of process.
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Establishment of tariffs for electricity produced from renewable energy
resources
9. How long are the set tariffs for RES
valid?
Subsidy may be paid to the
producer within 12 years
from the commencement of
production.
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Establishment of tariffs for electricity produced from renewable energy
resources
10. Obligatory purchase of electricity
produced from RES
There is no obligatory purchase of electricity
produced from RES in Estonia.
Producers (who have the right to sell) sell
their electricity to the open market and be
in accordance with the Electricity Market Act
decreed cases, may receive subsidy.
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Establishment of tariffs for electricity produced from renewable energy
resources
11. Current tariffs
A producer has the right to receive support (Euro/MWh) from the transmission
network operator for the electricity which was generated:
ƒfrom a renewable energy source; from 01.07.2010 for the electricity, which was generated
from renewable energy source, to the exclusion of biomass (53,7 €/MWh);
ƒfrom biomass in cogeneration regime (from 01.07.2010); if the electricity was generated
from biomass in condensation regime, a producer has not the right to receive support
(53,7 €/MWh);
ƒin efficient cogeneration regime from waste within the meaning of the Waste Act, from peat
or oil-shale processing retort gas (32 €/MWh);
ƒin efficient cogeneration regime with power plant which has the electric capacity not
exceeding 10 MW. (32 €/MWh).
oIf electricity was generated in efficient cogeneration regime from a renewable energy
source or from peat, Estonian Competition Authority may impose a different rate of
subsidy for producer (of application by the producer).
oProducer has the right to receive support from the transmission network operator for the
usage of installed net capacity in power plants which use oil shale and started producing
01.01.2013-01.01.2016 (14-16 €/MWh depending on CO2 prices)
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Establishment of tariffs for electricity produced from renewable energy
resources
12. Price setting for RES in the future
This decision depends on politicians.
Estonian regulator has issued an analysis of
the supports for RES and states that the
current system is not sustainable in the long
term.
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Establishment of tariffs for electricity produced from renewable energy
resources
13. Comments
Thank You for Your Attention!
Riina Randmaa
Estonian Competition Authority
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