Annual Report 2015
Estonian Competition Authority is glad to present its annual report describing our work and activities in 2015. A large and important part of our work is related to energy issues, therefore 2015 will mostly be remembered for a drop in energy prices. Leaving aside the price shock of crude oil in 2008, the following rapid decline and a new rise in 2009, this is the first time in the last 10 years when we as consumers are able to enjoy low energy prices due to the drop in the prices of crude oil. It can be seen both in petrol stations and on electricity and gas bills. It is also reflected in the continuous decline in consumer prices for two years in a row. Just like in other European Union countries, there have been discussions in Estonia on whether the free energy and gas market really does ensure the best prices for the consumers or if we should continue with the more conservative market model in which the monopoly dictates who sells energy and gas to the consumers. Today, it is safe to say that the EU has chosen the correct path when implementing the free market principles, and Estonia together with the other Baltic States is a fine example to others of a free energy and gas market and integrated connections. It is clearly manifested in both the Estonian-Finnish electrical connections and the Lithuanian-Swedish electrical connection that launched last year. An additional Estonian-Latvian connection should be opened in 2020.
There has been progress in the entire region as to gas connections as well. Let us view, for example, the recently reinforced network in Lithuania that now enables both Estonia and Latvia to buy natural gas from the Klaipeda terminal. The establishment of Lithuanian-Polish and Estonian-Finnish gas connections is also important, ending the gas supply isolation that has prevailed in Finland and the Baltic states for decades. It is extremely relevant in following the principles of both the free market and energy security. At that, we are true leaders at the Estonian-Finnish gas connection project – it is carried out thanks to the Estonian initiative. Naturally, the project has many critics and the debates on its economic efficiency could go on endlessly, but looking at the map of Europe it is clear that there would be no uniform and functional gas market without that connection.
Maybe I have concentrated too much on energy in my foreword this time. After all, we cannot forget that we are called the Estonian Competition Authority, not a supervisory body of regulated markets or something of that kind. Based on our own example, I can make assurances that it is exactly thanks to the field of competition that the regulator has become more open and broad-thinking. The first emotion of a separate regulator who sees a problem is often to add regulation, that is, to fight the consequences, not the causes. We have come to a clear understanding that first and foremost, the causes of the problems need to be tackled and it is often the liberalisation of the respective market that provides the best outcome for a consumer.
There are still sectors in Estonia where we could take steps towards better organisation and diminish regulation, be them the fields of district heating or electronic communication that are clearly overregulated today.
Although everyone is undoubtedly doing a big and important job, I especially want to thank our competition officials for making the price regulator what it is today.
With best wishes