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Estonia · Law · SE

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Electricity Market Act Amendment Act

avaldatud riigiteatajasEstonia· Riigikogu· ET

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16 December 2024

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AVALDATUD_RIIGITEATAJAS

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7 May 2025

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Summary

The bill is related to frequency reserve and island operation. Amending the law has two central goals, firstly, the service of island functionality must be ensured, and secondly, the relevant directive must be adopted and the shortcomings of its adoption up to now have to be eliminated. The bill eliminates double taxation of electricity storage and establishes a separate metering point for this storage. The regulation of aggregation and consumption echo is improved, which increases the flexibility of consumption. The procedure for financing the cost of obtaining balancing capacity is established. The principle of net metering is introduced during the trading period when presenting invoices to consumers. As an important innovation, the regulation of the service of guaranteeing island functionality will be created, which will allow from 2026 to maintain the necessary amount of power generation capacity to maintain the stability of the Estonian electricity system. Without the measure, there would be a risk that from 2026 there would not be enough production capacity available. The system manager, i.e. the grid operator Elering AS, analyzes and assesses whether there is enough power generation capacity available at any given time to cope with the island operation situation. Elering AS has estimated that the minimum need for controllable power in the Estonian electricity system is approx. 1000 MW. With the support of the service for ensuring the islanding capability, Estonia would have the independent ability of the electricity system to cope with the situation if we were to end up in islanding. Only the capacities located on the territory of Estonia are able to ensure the independent operation of the electricity system in the situation of island operation. Until now, oil shale power plants have maintained the necessary controllable capacity, but due to the decrease in the competitiveness of oil shale energy, oil shale power plants do not earn enough from the electricity market for the owner to keep them on the market in the future. The estimated cost of procuring the island capability service is in the order of 34 million euros per year, which leads to an estimated increase in electricity bills for consumers by about 2.4% (0.42 cents per kilowatt-hour). In order to ensure the service of guaranteeing island functionality, the system manager Elering AS carries out public procurement, which is technology-neutral in nature and all Estonian electricity producers who meet the conditions can bid for it. Elering AS plans to submit the technical conditions and procurement principles to public consultation in 2025. during May-June, and the public procurement is estimated to take place in the period August-October. The conditions are coordinated by the Competition Authority. The main condition is that the power producer must be able to provide production capacity for ten consecutive days in the situation of island operation.

Machine translation from Estonian. The official text remains authoritative.

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