1. Electricity sector legislation in Estonia, issues to be solved Einari Kisel Director of Energy Department

2. Storyboard What is Common Baltic Electricity Market? Issues to be solved Planned amendments to the Estonian Electricity Market legislation

3. What is Common Baltic Electricity Market? (1) Baltic States ? Baltic States with North-West Russia ? Baltic States with Nordic Market ? Baltic States with NW Russia and Nordic Market ? Market Area:Security of Supply Area: Technically :

4. What is Common Baltic Electricity Market ? (2)  Who are the market participants ?  Where and how the security of supply should be guaranteed?  What do we want to achieve in CBEM?  What do we want to avoid in CBEM?

5. Estonian Electricity Market legislation Required licencing of activities in Estonia  to avoid, all Baltic States should have similar approach to all market participants (also to importers) Market opening by 2009/2013  to accelerate, the framework towards Russian electricity supplies has to be agreed by all Baltic States  to accelerate, the handling of dominant players has to be regulated

6. Additional issues to be solved Security of Supply area (how much capacity should be available in the market area): Common Baltic Electricity Strategy Regulation – from price cap to market power regulation Environmental taxes

7. Planned new regulation for Renewable Power and CHP (1) 1.option: -purchase obligation -5,17€cnt/kWh for RES-E less than 100 MW -3 €cnt/kWh for CHP using peat and waste -3 €cnt/kWh for CHP installed instead of a boiler house (less than 10 MW) -applicable for 12 years from start of operations -for wind power: applicable until 200 GWh within a calendar year is produced from wind power

8. Planned new regulation for Renewable Power (2) 2. option: -sale to the market with market price, additional premium -3,2€cnt/kWh for RES-E less than 100 MW -1,1 €cnt/kWh for CHP using peat and waste -1,1 €cnt/kWh for CHP installed instead of a boiler house (less than 10 MW) -applicable for 12 years from start of operations -for wind power: applicable until 400 GWh within a calendar year is produced from wind power

9. Planned new regulation for Renewable Power and CHP (3) 3. option: -sale to the market with market price, get guarantee of origin  sell “green electricity” or “CHP electricity” -applicable forever

10. Conclusions  Currently there are different approaches to the concept of CBEM in the Baltic States  Few changes needed Estonian electricity market to be liberalised, depend from Russian interface.  Common Baltic Electricity Strategy is needed  Amendments to the electricity market regulation in Estonia will support renewables and CHP-s