Elering’s price increase to reach Elektrilevi’s customers on 1 June
The Estonian Competition Authority has approved a 10% price increase for the network service as of 1 June. The main reason for this is a 17% increase in the price of the transmission service of the transmission network operator Elering.
‘At the end of last year, Elering announced that the price of its transmission service for the transmission network would increase by 17% on 1 April this year. The change will incur an additional cost of 12.1 million euros for Elektrilevi. As the transmission service for the transmission network accounts for approximately 35% of Elektrilevi’s network charge, the price increase has a direct effect on the price of the network service,’ explained Mihkel Härm, chairman of the management board of Elektrilevi.
The second factor in the change in the price of the network service is the increase in electricity prices. The electrical power network also needs electricity for its daily operation, and the related costs have increased by 48% for Elektrilevi. ‘If there is a sustained stabilisation and decrease in electricity prices on the electricity market, Elektrilevi will review its network charges and will lower prices at the earliest opportunity,’ Härm said.
The third factor in the change is the amendment to the Competition Act passed by the Riigikogu at the end of last year, which obliges network operators to pay a supervision fee equal to 0.2% of their sales revenue to the Competition Authority. ‘For Elektrilevi, this will cost half a million euros this year,’ Härm noted.
As a considerable proportion of the increase in the network charge is due to the increase in the exchange price of electricity, Elektrilevi is searching for ways to mitigate electricity price risks. One option is to organise a competition for the purchase of lost electricity at a fixed price, where renewable energy producers could submit tenders. ‘We believe that such a solution would help stabilise network charges against major changes in the exchange price of electricity,’ Härm stated.
‘Elektrilevi has consistently sought ways to prevent price increases without compromising on network quality. In five years, we have been able to reduce the number of failures by a third and connect more than 10,000 electricity producers (such as solar parks) to the grid, thereby supporting the green transition. In 2021, we managed to improve the security of supply for more than 69,000 customers – we are making constant efforts in this area and will continue to do so this year as well,’ Härm added.
In 2021, Elektrilevi reconstructed more than 600 kilometres’ worth of power lines and 200 substations. Major renovations of the medium-voltage network are planned in Riisipere, Jõgeva, Põltsamaa, Pärnu in the Papiniidu area, as well as in the vicinity of Mustvee, Türi, Nõva, Varbla, Audru, Lõpe, Kihelkonna, Orissaare, Elva, Tõrva, Nuia, Vigala, and Võru.
The new price list, which will take effect on 1 June, has been published on Elektrilevi’s website. The network charge will increase equally for all customers.