The Competition Authority extends the deadline for the analysis of the causes of high electricity exchange prices

The deadline for the analysis of the causes of high electricity exchange prices is postponed due to the volume of the material to be analysed.

According to Evelin Pärn-Lee, Director General of the Competition Authority, several meetings have been held over the last few weeks with regulators from the Baltic states, system operators and Nord Pool representatives. “The volume of data to be analysed is extensive and we need more time to compile and analyse the necessary information,” claimed Pärn-Lee. “We understand the public’s great interest and we are working hard to find answers to the questions as well as propose solutions. It is known by now that there was no lack of production capacity on 17 August and if the system of Nord Pool had been more flexible, the price would have been different.” 

In addition to electricity, the price of gas, wood chips and other types of energy has significantly increased and as a result the number of price change applications submitted to the Competition Authority has spiked. According to Pärn-Lee, the situation is concerning. “In many cases, the Competition Authority cannot directly intervene in the operations of wholesale undertakings. Although the state has guaranteed compensation measures for household customers, we cannot forget that in the current situation it is important to ensure the competitiveness of the Estonian economy as a whole, and that the rapid increase in the price of energy carriers is a hard blow for undertakings as well,” added Pärn-Lee, according to whom the Competition Authority is complying with legislation and approves price changes only when justified. 

The Director General also noted that the sudden price increases we have seen lately necessitate close monitoring and, if necessary, analysis of the competitiveness of the vital services market. According to the law, vital services means all services that the population is used to consuming. In addition to the previously mentioned electricity, gas and wood chips market, the Competition Authority is also focusing on the motor fuel and food retail market. Undertakings with significant market power should not forget that they have an obligation not to abuse their power and they are not permitted to implement unfair prices or other unfair business conditions. It is also important for retailers not to behave unfairly towards food producers, as the production of food is especially important during a time of crisis.

On 17 August, the average price of electricity in the Estonian price area increased to 682.05 euros/MWh, with the price being 4000 euros/MWh from 18:00 to 19:00. In relation to the record increase in the price of electricity, the Competition Authority launched an analysis in order to identify the reasons for the price increase, which was initially supposed to be completed within a month.

The Competition Authority exercises state supervision over competition, electricity, natural gas, district heating, mail, public water supply and sewerage as well as railways, aviation and ports.