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Estonian ministry wants to halve renewable energy charge by 2013 – daily

Estonian news - etea October 18, 2011

Baltic News Service, 18.10.2011

Estonia’s Ministry of Economy and Communications has brought out a bill to halve the renewable energy charge by 2013, the daily Postimees says.

The renewable energy charge stands at 0.73 cents per kilowatt-hour this year. If the ministry’s plan to cut it is implemented the charge will be half smaller in two years’ time.

Consumers at present support the production of electricity from wood, water and wind with a direct subsidy of 5.4 cents per kilowatt-hour. In the first eight months of this year electricity producers have received 32 million euros in support.

The ministry’s plan would make the size of support dependent on the free market price of electricity. In that case hydroelectric power plants and the Tallinn, Tartu and Parnu cogeneration plants would be entitled to a subsidy of 7.4 cents minus the free market price. Support for wind turbines would be 8.6 cents and for the oil shale-fired Narva power plants, 5.2 cents minus the free market price.

The ministry hopes the bill will reach parliament at the beginning of next year and the cuts take effect at the start of 2013 along with full opening of the electricity market.

Last year the ministry suggested that the new rate of support should be 6.4 cents minus the free market price of electricity.

Another aim of the bill is to set a ceiling on renewable energy generation. In January-August 800 gigawatt-hours of electricity was produced from renewable sources. The bill caps annual output of renewable energy entitled to support at 1,200 GWh.

In the paper’s view this means that once the national power company Eesti Energia’s new wind farm in Narva goes into operation the annual quantity will be full and there will not be room for new projects.

True, the bill gives the government permission to raise the ceiling but only in case electricity consumption in Estonia grows for some reason faster than forecast.

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