Language switcher

You are here

Estonian Electricity and Gas Market Reports

Dear readers,

We are pleased to present the overview of the functioning of electricity and gas markets in Estonia in the years 2019-2020. It is a speech pattern to start with the words that 2020 was a special year. It is likely to be а catchphrase of the year in the annual reports of many organisations and authorities. Nevertheless, the pandemic, as some of the major events, has to be pointed out. Regardless of all the negative consequences also a positive moment has to be emphasized – despite of the complicated situation in the spring and late fall of 2020 our energy system overcame all the challenges. There were no outages and the supply of energy as a vital service was always available to the consumers. We express our deepest gratitude to the enterprises who were up the task and managed to maintain the supply of energy.

Setting out of the EU's climate neutrality objective has to be outlined a very significant event. It is a very ambitious goal – to become carbon neutral by 2050. For the EU the ambition is important also from the point of view of security of energy supply. While being some of the largest and wealthiest economies, we are in a sharp dependence on the import of energy. Besides the achievement of climate neutrality this is also a very important goal for the future of our planet.

In the achievement of the climate neutrality it is very important keep in mind free competition, which is one of the basic principles of the EU functioning. Both the production of renewable energy and the security of supply of the system have to be achieved through free competition and both the application of capacity mechanism and renewable energy subsidies are justified only in the case if these goals cannot be achieved through free competition. A good example herewith is ensuring the security of electricity supply – a separate chapter is dedicated to this in the present report. In the previous years the security of supply calculation was based on the principle where the controllable capacities were summarised and then it was analysed whether it is enough to cover the peak load. The green energy package, which was introduced in 2019, provides an updated approach. The basic principle is ensuring the security of supply through free competition and integration of energy systems. The EU legislation provides very precise guideline when to apply a capacity auction while the primary task is to ensure free competition. As the framework of the capacity mechanism provides for a public aid, a Member State shall thoroughly weigh whether a deviation from free competition and application of the capacity mechanism is really justified. As it was said above, a very important issue is the strengthening of cross-country connections. Looking into the future it is getting ever more important to consider the coincidence factor. By logics it is likely that somewhere in Europe the Sun is shining or it is windy and thereby it becomes possible to transport also the energy produced from renewable resources in the system.

We would also like to stress the commencement of operation of the common Finnish-Estonian-Latvian gas transmission region. We are a kind of a reference project for the rest of EU where gas is flowing from one Member State to another without extra network charges. This is an example of application the free movement of goods – some of the EU basic principles. We hope that the hurdles in the construction of compressor stations will be resolved and already in the coming months the system should be able to function at full capacity.

With wishes for pleasant reading,
Märt Ots
Director General