A well developed network charge creates a more effective and reliable network
The distribution network is a support pillar of modern society and a vital infrastructure that offers the stability, security and comfort necessary for the society. The network is joined more and more by distributed energy producers requiring energy traffic in two directions. At the same time, electric transport needing large capacities is thriving. We also have to consider new types of market participants like energy associations and communities, power saving units, etc.
This kind of changes bring with them new need for network investments. To ensure the reliability and effectiveness of the network, the developments must also be accompanied by the network pricing – so that in ensuring the service and raising the reliability we could offer the maximum effect for each euro.
To ensure that the network service pricing corresponds to the current and future needs of the network and would guarantee the users the best price and quality ratio, we have developed a long term vision for Elektrilevi network charges.
For creating the vision, we held public consultations where we included different parties. Knowing the future developments ahead for a longer time and having a say in the pricing, all affected parties can consider the coming changes in time.
Main trends in network charges
Directions of network charge development for the next ten years:
Due to the changes in pricing, we can offer a more effective and reliable service, and keep the costs and price as a whole as low as possible.
Main trends in network charges
Price for each consumer group will more than before depend on the costs
necessary for that consumer group
If previously the big energy consumers have also been covering a notable part of the costs for small consumers, then in future the price will more and more depend on the costs necessary for each consumer group. Until now the price in Estonia has been for small consumers one of the most favourable in Europe, and to the contrary – the big consumers who have also covered the costs of slammer consumers have paid considerably higher network charges compared to European companies. The changes in network charge pricing will make the prices more fair and the companies more competitive, thereby promoting economic development.
The share of the fixed charge or network readiness charge is
The costs related to ensuring network connection do not significantly depend on how much electricity is consumed. Therefore more and more fixed charges are applied in the network charge. The share of this in Estonia has been lower than in the neighbouring countries and the rest of Europe, but the tendency is toward growth. On account of the growing fixed charges we can lower the kWh-based or variable component.
Optional packages will be added, which will allow a more favourable
network charge outside the peak load times
Flexible pricing will help to spread out the peak load of the network and direct consumption away from peaks. This helps to avoid situations where the network transmission capacity has to be increased and capital-intensive investments have to be made only due to momentary needs.
The network charge will continue to become cheaper in real prices, i.e.
compared to the consumers' purchasing power
We can predict a slight increase of network charges in nominal prices. Considering the growth of the consumer price index (CPI), the network service will continue to become cheaper in real prices, i.e. compared to the consumers' purchasing power.