Estonian Climate Ministry planning to amend Electricity Market Act

TALLINN - The Estonian Climate Ministry has submitted a draft amendment to the Electricity Market Act to the Justice Ministry of Justice for approval, aimed at providing greater investment security to companies developing electricity storage, as well as regulating provisions for managing electricity consumption and promoting flexibility services.

One key change proposed by the Climate Ministry is to exempt electricity storage facilities from double fees, the ministry announced.

"Currently, companies have to pay fees multiple times for stored electricity. The changes will significantly reduce costs for companies. For larger storage facilities, this could mean annual savings of more than three million euros, making storage more profitable and opening new investment opportunities," Climate Minister Yoko Alender said in a press release. She added that these changes will bring consumers more certainty that electricity prices will be low and stable in the future.

With the amendment set to take effect at the beginning of 2026, renewable energy and grid transmission fees for storage equipment will only be charged on net consumption for the calendar month. This means the owner of the storage device will only pay for the electricity lost during storage, meaning electricity that is not returned to the grid. The change will reduce costs for electricity storage facilities when storing and returning electricity to the grid, making storage projects more profitable for businesses. For example, a 100-megawatt storage facility could save more than three million euros annually.

The draft also promotes the installation of production equipment alongside electricity consumption. It addresses issues related to measuring electricity output, ensuring that consumers will not be billed for self-produced electricity consumption, with consumption and production balanced every 15 minutes. The ministry estimates that the costs for electricity producing consumers will decrease by 5 to 40 percent as a result of this change, which will be implemented at the beginning of 2027.

Additionally, the draft incorporates the directive on common rules for the internal market for electricity, which, among other things, removes the obligation for smaller network operators to develop long-term network development plans. However, larger operators like Elektrilevi and Elering will still be required to do so. Electricity sellers will also be required to provide a summary of the electricity contract when signing an agreement, giving consumers a clear and simple overview of the terms.

After a second round of approvals with the Justice Ministry, the Climate Ministry plans to submit the bill to the government no later than November. If the government approves the draft and the amendments receive support in the parliament, the changes are expected to come into force in April 2025.