Speaking at the government’s regular weekly press conference on Thursday, Kallas said: “Yesterday’s electricity price of €4,000 per MWh recorded between 6 p.m. and 7 p.m. is, so to speak, the result of a perfect storm. But the main thing is that the Competition authority (Konkurentsiamet) is currently investigating how prices were able to reach such high levels. There has been a big shift in terms of supply and demand. It seems that the problems are mainly related to the latter. One aspect is that we, together with Finland, Latvia and Lithuania have given up Russian electricity, leaving 1 GWh less electricity available. All this is the result of Russia’s war against Ukraine.”
“One thing is that we, together with Finland and Latvia-Lithuania, have given up Russian electricity and there is one gigawatt hour less in total. This is all due to the war that Russia is waging against the Ukraine,” she continued. .
The Prime Minister added that she was surprised that several different power producers in the Baltic region had scheduled maintenance work all at the same time.
“I hope the Competition Authority will investigate whether it really doesn’t need to be coordinated and whether it’s still possible to go out at the same time,” Kallas continued.
“I am interested to know if such situations could be avoided through better coordination, whereas what we see in Latvia and Lithuania, where gas-fired power plants have also temporarily left the market, all this contributes to disrupting the In other words, if the main culprit is low supply, we need to focus on how to increase supply,” the Prime Minister continued.
On whether the Nord Pool power exchange should be made more transparent, explaining clearly why peak prices have reached such high levels, Kallas said the idea could certainly be supported.
“After all, we’re all interested in who’s bidding, but also who’s not.”
“Currently, the main problem is the lack of supply, but if a producer has, for example, three production units but makes a bid with only one, and not with the other two, then he wins it much more than that of ‘a unit- I can’t be sure there is manipulation going on at the moment, but increasing transparency on the power exchange is essential for us to understand how prices are formulated. We can also begin to solve the problem, perhaps life has shown that greater transparency brings clarity and generally reduces costs,” explained Kallas.
Economy and Infrastructure Minister Riina Sikkut (SDE) agrees.
Sikkut said: “Should this be made available to the public or only to market players [is one question]but compared to the current situation, the power exchange certainly needs more transparency, in order to maintain confidence in Nord Pool.”
“For Ukraine to win the conflict, we have to maintain Western unity. But the difficulties people face are beginning to break this unity of support for Ukraine. However, in the long run, completely leaving the stock exchange of the “Electricity won’t do us any good for our safety, nor will it bring a better price. Transparency is the first and most effective way to build trust now,” she continued.
While Estonia’s Nord Pool figure of €4,000 on Wednesday was an all-time high, and also the maximum currently allowed under European Commission regulations, the EU’s own European Emissions Trading System (ETS) EU should also see a record price of CO2 quota on Thursday, of 96.35 € per tonne, which will also impact prices.
As for a question from an ERR journalist on whether Estonia should ask for changes to be made to the ETS, for example by establishing a price cap, Kallas replied that discussions on this subject at the EU level are currently underway. “These discussions took place in the Council of the European Union, that is, between the heads of government. In the current difficult energy price situation, there are two important variables – the price of inputs and emission units. Proposals have been made to fix them for one year. Another proposal, which is not linked to the ETS, is to decouple the price of electricity from the price of gas. We have supported these proposals in the discussions and we will continue to do so, because it is a concern of all of us – we have crazy price levels in Estonia, but in many parts of Europe they are even higher .”
The cabinet is due to discuss this afternoon the bill on the reform of the electricity market prepared by the Ministry of Economy and Communications.
ERR also asked Kristjan Järvan (Isamaa), Minister of Foreign Trade and Information Technology, ahead of the Council of Ministers, if it would be more appropriate, when defining the base of universal service beneficiaries, to set a limit on the volume of consumption instead of setting it specifically for private consumers and apartment associations, as this would also help small businesses.
Järvan said it was a: “Good question. The fact is that the energy crisis is general. Some have been heating with natural gas until now. The alternative for them is an electric heat pump. If you say that “an apartment association consumes more, where do you draw the line? Companies consume eight times more than domestic consumers.”
The proposed universal service would be aimed at domestic consumers, but its likely price range has yet to be announced.
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