All undertakings engaged in electricity distribution services must coordinate their prices with the Competition Authority. This kind of supervision provides consumers with the security that undertakings will not earn unjustifiably large profits by abusing a monopolistic market position.
The Competition Authority additionally ensures that the investments of undertakings into improving the technical state of networks and into developing the power supply infrastructure are reasonable and made in due time. The transmission system operator Elering AS is responsible for the functioning of the electricity system as a whole and for ensuring a high-quality power supply.
There are 33 distribution system operators in Estonia, operating more than 65,500 kilometres of low and medium voltage lines.
Elektrilevi OÜ’s market share is approximately 87%, followed by VKG Elektrivõrgud OÜ, active in Ida-Viru and Lääne-Viru County, as well as Imatra Elekter AS, active in the western part of Estonia.
They all have the obligation to secure consumers with a high-quality power supply connection and fast elimination of network faults. The electricity market is regulated by the Electricity Market Act and the network code, setting out requirements for electricity producers, sellers, network operators, line possessors, balance providers, electricity exchange organisers, consumers and also for the Competition Authority as a regulator.
The Competition Authority approves the tariffs taken by the system operators and verifies that the investments reflected in those are reasonable and will ensure the network’s reliability and sustainability.
The Competition Authority’s main tasks in the field of electricity:
- to develop a competitive, flexible, secure and environmentally sound internal and regional markets;
- to agree, adopt and inspect the prices of power supply services;
- to inspect and coordinate connection fees, connection fee calculation methods and connection contracts;
- to perform supervision over the field of electricity, and to prevent and detect misdemeanours;
- to subject undertakings to activity and development obligations, and to inspect the fulfilment of those.
Open market for electricity
At the beginning of 2013, Estonia’s electricity market became open for all consumers. Everyone with a valid network contract can choose their electricity seller. In an open market, all electricity producers have an equal opportunity to access the electricity networks and the network connections between European Union countries.
For the consumer, the opening of the market means an opportunity to choose the electricity seller most suitable for the consumer, regardless of which undertaking they have signed the network service contract with. The undertakings, on the other hand, need to put in more effort to compete for the customers. The electricity price forms on the electricity exchange, in the conditions of equal competition.
If the consumer has not signed a contract with any electricity seller or the contract has expired then the consumption region’s network operator (or the seller named by the latter) shall supply electrical energy to that consumer under the general service. The Competition Authority inspects the formation of the general service’s price retroactively.
Last updated: 06.10.2023