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Estonian Competition Authority

Press release: AS Tallinna Küte assumed a commitment to organise a competition for purchasing peak capacities of heating

10.04.2014

The Estonian Competition Authority accepted a voluntary commitment taken by AS Tallinna Küte to organise a competition for purchasing peak capacities of heating for the district heating network of the city of Tallinn and for concluding long-term agreements from the year 2016. This concluded supervision proceedings that examined whether AS Tallinna Küte has, when buying natural gas-based heating for the district heating network of the city of Tallinn, ensured fair competition between gas boiler plants owned by AS Tallinna Küte and the Iru power plant of Eesti Energia AS.

AS Tallinna Küte is operating the district heating network of the city of Tallinn, being the sole possible buyer for various producers of heating. Heating in Tallinn is produced foremost from forest chips and waste. The remaining deficit is produced from natural gas, the quantities of heating produced from natural gas are larger mostly in winter. The natural gas-based heating for the district heating network of Tallinn is produced by AS Tallinna Küte itself in its boiler plants and by Eesti Energia at the Iru power plant.

In its preliminary assessment, the Competition Authority found that AS Tallinna Küte may have created an advantage for its own boiler plants when purchasing heating. Subsequently AS Tallinna Küte submitted an application to the Authority whereby it proposed a voluntary commitment to hold a competition for purchasing peak capacities of heating and concluding long-term agreements from the year 2016 in order to determine the best offer. According to the Competition Authority, this commitment will improve the competition situation in purchasing peak capacities of heating for the district heating network of Tallinn and makes it possible to effectively use the existing competition for the production of heating.

From 15 July 2013, the Competition Authority has the right to approve voluntary commitments taken by companies for the purpose of improving competition. The decision on AS Tallinna Küte is the first time the Authority has exercised this right.


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