Estonia expects central heating rates to rise this winter
Central heating rates in Estonia may rise this winter due to the expected increase in the price of wood chips—the main fuel for most of the country’s heating networks. The exact extent of the increase will become clearer in the coming months, according to ERR News, citing the Estonian Competition Authority.
According to Kertu Saul, head of the agency’s price regulation department, heat supply companies typically sign contracts for wood chip deliveries for the heating season between June and September. At the same time, the impact of the fuel price increase will vary depending on the specific heating network and existing supply contracts.
Adven Eesti, one of Estonia’s largest energy and heat supply companies, forecasts an average increase in its rates of 7%, or approximately 5.80 euros per megawatt-hour. In most of the company’s 14 network zones, prices are expected to rise by 3–10%, according to its estimates.
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At the same time, rates in Kostivere are expected to drop by about 30%. This is due to an agreement with local authorities to connect the Kostivere grid to that of neighboring Loo. The company has also agreed to reduce its lease costs, which will allow it to keep prices in Loo unchanged.
Raivo Melsas, Head of Adven Eesti, noted that fuel prices remain the main factor, as diesel and other types of motor fuel are required for the production and transportation of wood chips. Natural gas, which Adven uses alongside wood chips primarily during periods of peak winter demand, may also affect the cost of heat. According to the company’s estimates, the recent rise in gas prices may begin to impact rates in October. The competition authority noted that natural gas will have a smaller overall impact, as it is used in about one-fifth of Estonia’s district heating networks, mostly as a backup fuel.
