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Latest developments in Estonia
Märt Ots Estonian Competition Authority Baltic Electricity Market Fora Vilnius
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Market opening Transitional period of opening of the electricity market in Estonia Until 2009 market opening level was 12%. Eligibility level 40 GWh. From %. Eligibility level is 2 GWh. From %. The price cap of non-eligible customers tariff and Narva Power Plants generation tariff (market dominating enterpreneur) is set by ECA.
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Market opening (2) The eligible consumers have the right to purchase electricity with regulated price. The restriction is, if the eligible customer has selected for regulated price, it can not change the supplier within one year. No change of supplier at the moment. Proposed changes of the electricity market act: should be valid by The eligible customers have no right to purchase electricity with regulated price.
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Market opening (3) Difficulties in the perspective of partial market opening: Complications in the separation of eligible and non-eligible markets. Possible manipulations and speculations with regulated tariffs. The best solutions would be the full market opening before 2013.
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Estlink Estlink 1 (365 MW). In commercial use until 2013. No TPA.
Preconditions for market functioning are the links to the Nordic or Central European markets. ECA together with the Finnish regulator supports the partial (Nordpool Spot project) and especially the full opening of Estlink 1. Estlink 2 (650 MW) planned as a part of TSO-s with TPA. 100 million € support from the EU.
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Ownership unbundling of TSO
Today the legal unbundling of the TSO – OÜ Elering is a subsidiary of Eesti Energia AS Decision made by the cabinet of ministers. Ownership unbundling of TSO by The shares will be transferred from Eesti Energia AS to the Ministry of Economic Affairs and Communications. Further step – the transfer of shares to the Ministry of Finance. The final goal is to transfer the shares of Eesti Energia AS and TSO to the different ministries.
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New generation capacity
Opening of two new wood and peat CHP units in Tallinn and Tartu. 25 MWel each. 30 % of heat supply in Tallinn and 95% in Tartu relies now on wood and peat. Opening of 39 MWel windpark in Aulepa (western part of Estonia).
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Parallel regulation The electricity sector is regulated by sector (electricity market) and general (competition) acts. In the electricity sector the network business is very well regulated by electricity market act. The abuse of market dominant position in generation and supply is not well regulated by sector legislation. The definition of the market dominance: the position enables to operate in the market to an appreciable extent independently of competitors, suppliers and buyers; market share of 40% by turnover 8
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Dominant position – regulated by the competition act
Any direct or indirect abuse by any undertaking or several undertakings of the dominant position in the goods market is prohibited, including: directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; limiting production, service, goods markets, technical development or investment; offering or applying dissimilar conditions to equivalent agreements with other trading parties, thereby placing some of them at a competitive disadvantage; making entry into an agreement subject to acceptance by the other parties of supplementary obligations which have no connection with the subject of such agreement; forcing an undertaking to concentrate, enter into an agreement which restricts competition, engage in concerted practices or adopt a decision together with the undertaking or another undertaking; unjustified refusal to sell or buy goods. 9
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Exclusive rights or essential facility (infrastructure)
The infrastructure business is regulated by the Competition Act. An undertaking with special or exclusive rights or in control of an essential facility shall: Permit other undertakings to gain access to the network, infrastructure or other essential facility under reasonable and non-discriminatory conditions for the purposes of the supply or sale of goods. Third party access. Maintain separate records on revenue and expenditure related to each product or service on the basis of consistently applied and objectively justified principles of calculation which shall be clearly specified in the internal rules of the undertaking. The calculation of revenue and expenses must enable to assess whether the price of a product or service is in a reasonable ratio with the value of the product or service. Separation of accounts and reasonable prices. 10
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Proceedings according to the competition act.
The first priority is to use the electricity market act. In the energy sector a number of proceedings were commenced under the competition act. The abuse of market dominating power by Narva Power Plants (the daughter company of Eesti Energia AS). The precept was issued by ECA, the fine of € was imposed. (Maximum fine is €). Second abuse of market dominating power is criminal proceedings. Third party access to the district heating network.
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Thank You for Your Attention!
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