Ditte Juul Jørgensen
Directorate-General for Energy of
the European Commission Our Ref: 06.02.2023 No 17-6/2022/7324-2
1049 Bruxelles/Brussel Belgium
Reporting of monitoring obligations in line with
(EU) 2022/1854
Dear Ms Jørgensen,
With this letter, we are submitting a report to fulfil monitoring obligations in line with COUNCIL
REGULATION (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high
energy prices.
The report can be found in Annex.
With best regards,
(signed digitally)
Timo Tatar
Deputy Secretary General for
Energy and Mineral Resources
Tauno Hilimon
+372 625 6476
[email protected]
Suur-Ameerika 1 / 10122 Tallinn / ESTONIA
Phone: +372 625 6342 / Fax: +372 631 3660 / E-mail:
[email protected] / http://www.mkm.ee
Annex
Report on monitoring obligations in line with COUNCIL REGULATION (EU) 2022/1854 of 6 October
2022 on an emergency intervention to address high energy prices
Background
Article 191 of the Council Regulation (EU) 2022/1854 defines monitoring obligations for Member States.
This document provides a template for Member States to fulfil their monitoring obligations.
Demand reduction
The questions below cover Articles 3, 4 and 5:
1. Please specify which measures have been put in place to reduce the total monthly gross electricity
consumption (Article 3.1).
Energy saving campaign for end-user2. We started with the energy saving campaign already
at beginning of this year’s summer with a more active campaign starting at the beginning of
November. Various booklets and other materials were compiled and shared online,
commercials in television and radio, posters at bus stops and other places. Additionally,
more than 680 thousand households received a leaflet with energy saving tips in their
mailbox.
Energy saving measures in central government. Ministry of Finance came out with
mandatory measures for central government to reduce energy consumption in upcoming
winter. Measures are already in place since beginning of October. Measures include
decrease of indoor temperature to 19 degrees, out of office days, assessments and
optimization of building automation systems and other more building specific measures.
Guides has been created to optimize heating in building which is shared also with
municipalities. Central government example has also motivated municipalities to come out
their energy saving measures for the upcoming winter.
Related documents:
Keskvalitsuse hoonete energiasäästu suunised.docx | 110.41 KB | docx
Lisa 1 Tehnilised suunised.docx | 42 KB | docx
Renovation of small buildings. Financial scheme3 to renovate small buildings was open until
start of august this year and another4 has been opened few days after the closing of previous
one. Energy efficiency investments are supported, both deep renovation and smaller
investments.
Solar panel support for apartment buildings5. In June 2022, application for support was
1
Article 19.3
By 31 January 2023 and again by 30 April 2023, Member States shall report to the Commission on:
(a) the demand reduction achieved pursuant to Articles 3 and 4 and the measures put in place to achieve the
reduction pursuant to Article 5;
(b) the surplus revenues generated pursuant to Article 6;
(c) the measures concerning the distribution of the surplus revenues applied to mitigate the impact of high
electricity prices on final electricity customers pursuant to Article 10;
(d) any public interventions in the price setting for the supply of electricity referred to in Articles 12 and 13
2
Campaign website – www.hoiamekokku.info
3
https://kredex.ee/en/services/elamistingimuste-parandamiseks/reconstruction-grant-small-residences-2022
4
https://kredex.ee/et/majaduueks
5
https://kredex.ee/en/node/2219
opened. In addition to support for solar panels, renovation of roof and electricity storage
devices are also supported.
Resource efficiency measures for industries6 and resource efficiency measures for
agriculture and fishing sector7. Additional support was given to industries from Recovery
and Resilience Fund. Resource efficiency measure is planned to continue.
Renovation of public buildings8. Additional support of 28 million euros for energy efficiency
in central government buildings has been agreed on and opened9. Additional financing
schemes are planned for municipalities.
Renovation of apartment buildings. Additional support from Recovery and Resilience Fund10
and React-EU11 were given for renovations. Additional renovation schemes are planned in
the future, first one opening in January 202312.
Energy security measure for food industry13. Ministry of Rural Affairs opened the measure in
September 2022. Measure specifically aims to ensure security of supply for the enterprises,
including supporting solar and energy storage.
Additionally KredEx14 gives out emergency loans15 and guarantees16 for enterprises.
Enterprises decide for what the loan is used for but there has been a communication
targeted towards enterprises to consider energy efficiency investments.
Call to reduce electricity consumption at peak hours. We are carrying out this
communication through various channels17. For example, Estonia’s Prime Minister Kaja
Kallas already recently called on people to save electricity18.
Energy storage measure for enterprises has opened19.
Connection of apartment associations to district heating20.
2. By how many MWh has the total monthly gross electricity consumption been reduced between 1
December 2022 and 31 January 2023?
Total monthly gross electricity consumption has been reduced by 48 990 MWh when compared to
the average of gross electricity consumption in the corresponding months of the reference period.
3. Which measures have been put in place to reduce the gross electricity consumption during the
identified peak hours (Article 4.2)? Please provide details on the costs and impacts achieved for
each measure.
Energy saving campaign for end-user21. We started with the energy saving campaign already at
6
https://kik.ee/et/toetatavad-tegevused/ettevotete-ressursitohusus-rrf
7
https://www.pria.ee/toetused/kalapuugi-ja-vesiviljelustoodete-tootlemise-energia-ja-ressursisaastlikumaks
8
https://www.rtk.ee/toetuste-taotlemine-ja-korraldamine/valdkonnad-ja-meetmed/energeetika
9
https://www.rtk.ee/meede-keskvalitsuse-hoonete-energiatohususe-parandamine-moderniseerimisfondist
10
https://kredex.ee/en/services/reconstruction-grant-rrf
11
https://kredex.ee/en/services/elamistingimuste-parandamiseks/reconstruction-grant-react-eu
12
https://kredex.ee/en/kodudkorda
13
https://www.pria.ee/toetused/toiduainetoostuse-investeeringutoetus-energia-varustuskindluse-tagamiseks-
2022
14
https://kredex.ee/en
15
https://kredex.ee/en/services/business/industry-loan
16
https://kredex.ee/en/services/extraordinary-loan-guarantee-support-economy
17
https://mkm.ee/uudised/tipptundide-energiasaastu-saab-panustada-iga-tarbija
18
https://baltics.news/2022/11/24/the-prime-minister-of-estonia-calls-for-saving-electricity/
19
https://kik.ee/et/toetatavad-tegevused/energiasalvestuse-seadmete-pilootprojektide-arendamine
20
https://kik.ee/et/toetavad-tegevused/atmosfaariohu-kaitse-programm-sh-korteriuhistute-toetus
beginning of this year’s summer with a more active campaign starting at the beginning of
November. Various booklets and other materials were compiled and shared online, commercials
in television and radio, posters at bus stops and other places. Additionally, more than 680
thousand households received a leaflet with energy saving tips in their mailbox. Additionally call
to reduce electricity consumption at peak hours has been made. We are carrying out this
communication through various channels22. For example, Estonia’s Prime Minister Kaja Kallas
already recently called on people to save electricity23.
It is estimated that at least 1% of electricity on peak hours will be saved as a result of campaign
and communication. Otherwise, electricity consumption savings on peak hours result from higher
electricity prices.
4. Please specify how the peak hours have been identified (Article 2.4, Article 4.1).
TSOs explanation on determining peak hours:
Peak load hours have been determined for each month of the year separately. The selection has
been done by choosing the four hours each month with the highest average load of that month.
The calculation has been performed as follows for each calendar month:
a) According to the requirements of Article 4.1, it has been determined that 4 peak load hours
must be selected in each working day to satisfy the requirement of choosing a minimum of 10% of
all hours;
b) For each hour of the day, the average load of that hour among all working days (after the
exclusion of holidays) of the month has been calculated;
c) According to the 24 mean load values deriving from step b), a 4/24 percentile value has been
determined to filter out the four hours with the highest average load;
d) Hours of each month, during which the average load is higher than the threshold calculated in
step c), are set as the peak load hours of that calendar month.
5. How is the reduction of gross electricity consumption during the identified peak hours computed?
Which baseline do you use (historical data, historical data corrected with temperature, TSO
expertise)?
TSO has created the baseline and the model. Information from TSO:
Hourly consumption data for collected for the months of previous years and coupled with hourly
ambient temperature data from the Estonian Environmental Agency. The consumption and
temperature data included includes the period starting with December 2018 and ending with
March 2021.
According to the statistical consumption and temperature data in the determined peak load hours
of the analysed period, a linear consumption model has been created in the form of the following
formula:
𝑃 = 𝑎 + 𝑏𝑇, where:
P – electricity consumption in Estonia (MWh);
T – ambient temperature in the chosen measurement location (℃).
21
Campaign website – www.hoiamekokku.info
22
https://mkm.ee/uudised/tipptundide-energiasaastu-saab-panustada-iga-tarbija
23
https://baltics.news/2022/11/24/the-prime-minister-of-estonia-calls-for-saving-electricity/
A linear equation has been created for all the hours that lie in the month calendar months of
December in the historical period, a separate equation for the hours of January etc. The created
linear equation of December has used as a reference for period of December 2022; the created
linear equation of January has been used as a reference for the period of January, 2023 etc.
To determine the change of consumption levels, the measured ambient temperatures of peak load
hours of winter 2022/2023 have been used, along with the created linear equations to determine
the reference level of the consumption. The reference level of consumption has been compared,
hour by hour, with actual measured consumption of winter 2022/2023, from which the relevant
reduction levels can be calculated.
6. By how much MWh the gross electricity consumption during the identified peak hours has been
reduced between 1 December 2022 and 31 January 2023? Please specify a range: 1-4%; 4-7%; 7-
10%; above 10%.
The sum of electricity consumption reduction during the selected peak load hours has been
determined to be 10 054 MWh between 1 December 2022 and 31 January 2023, which lies in the
range of 4-7%, compared to the reference model.
7. Pease explain how the measures taken to achieve demand reduction in application of Articles 3
and 4 fulfil the conditions set out in Article 5.
No measures are in place for which the conditions in article 5 apply.
Cap on market revenues and distribution of surplus revenues and surplus congestion income
revenues to final electricity customers
The questions in this section cover Articles 6, 7, 8, 9, 10 and 11.
Questions regarding how the inframarginal revenue cap has been implemented:
8. What is the actual level of the cap (per technology if applicable)?
Estonia has taken a different approach with the inframarginal revenue cap which has been
communicated previously24. The level of cap is 180 eur/MWh. Revenue exceeding this cap must
be reinvested into renewable investments or its enablement (for example investments into
storage).
9. When the cap has been set at a higher level than 180 eur/MWh, please provide justification for
the cap level.
N/A
10. What is the period of application?
The obligation to reinvest surplus revenues applies to surplus revenues earned between 1st
December 2022 to 30th March 2023.
11. Does the cap apply to all market timeframes (i.e.: forward, day-ahead, intraday and balancing)?
Yes.
12. Does the cap apply to 100% of revenues?
Yes.
13. Does the cap apply also to traders?
Obligation applies to producers.
14. Which methodology do you use to apply the cap on future transactions? (proxy, at
settlement/after settlement, based on declaration, others)? Based on hourly prices, daily or
monthly averages, others?
N/A. If monthly average revenue for the producer exceeds 180 eur/MWh, the surplus must be
reinvested into renewable production or into its enablement (for example investments into
storage).
15. Which methodology do you use to apply the cap on existing hedges in place? (proxy, at
settlement/after settlement, based on declaration, others)? Based on hourly prices, daily or
monthly averages, others?
N/A. Same methodology is used as in previous point.
16. How does the implemented measure deal with existing power purchase agreements?
If monthly revenues exceed 180 eur/MWh, then the same methodology applies as described
previously.
17. Please specify which measures have been adopted to use the surplus revenues in application of
Article 10.
Revenues exceeding the cap must be reinvested into renewable energy production or its
enablement (for example investments into storage).
18. Have you encountered any challenges regarding the implementation of the cap on market
revenues? If so, could you explain what those challenges are and what measures have you taken
to address them?
No challenges have been identified yet. Producers keep a monthly overview of their power-
generating facilities with an installed capacity starting from 1 MW and report in their annual
reports on how much surplus revenue was reinvested into renewables.
Questions regarding the effect and results of the inframarginal revenue cap:
24
https://data.consilium.europa.eu/doc/document/CM-4715-2022-INIT/en/pdf
19. What amount of surplus revenues was initially expected to be collected?
N/A.
20. What amount of surplus revenues has been collected up to date? (total EUR and EUR/MWh)
N/A.
21. Has the measure had any impact on the cross-border flows?
No impact has been identified.
22. Have you detected any potential change of bidding behaviour of market participants, or of the
liquidity on organised markets?
No impact has been identified.
23. Have you been reported any relevant impact on power purchase agreements or as regards the
conclusion of forward hedges?
Approach taken in Estonia won’t have any impacts on power purchase agreements.
Retail measures
The questions in this section cover articles 12 and 13:
24. Are there any public interventions in the price setting for the supply of electricity to small and
medium sized enterprises pursuant to Article 12? If that is the case, how does the measure take
into account the beneficiary’s annual consumption over the last five years? Are these public
interventions set below cost as allowed under Article 13?
From November 2022 to December 2023, SMEs can buy electricity with fixed price. Electricity
price is fixed by the regulator (Competition Authority). Regulator set the temporary production
price for universal electricity service at 154.08 euros/MWh, or 15.4 cents/kWh. All electricity
suppliers can sell electricity with the fixed price. Regulated price is the actual cost of electricity
generation from oil shale, including a reasonable profit.
Measure was put in place before (EU) 2022/1854 entered into force which is why the measure
won’t consider the beneficiary’s annual consumption over five years. But there is a maximum
amount of electricity which can be bought at the fixed price by SMEs (1 GWh over a year). Fixed
electricity price is high enough to motivate energy savings.
25. Are there any public interventions in the price setting for the supply of electricity to households
and microenterprises that are set below cost as allowed under Article 13?
From October 2022 to March 2023 households are compensated up to 5 cents/kWh the monthly
average price of electricity without VAT, which exceeds 8 cents per kilowatt-hour (kWh)25.
26. If there are public interventions that are set below cost as allowed under Article 13:
a. What amount of consumption does the measure cover?
N/A. Measure was put in place before (EU) 2022/1854 entered into force which is why
there is no cap on the consumption.
b. How does the public intervention retain an incentive for demand reduction?
The measure will take effect only when price exceeds 8 cents/kWh and caps at 5
cents/kWh meaning that price can’t drop below 8 cents/kWh.
c. How does the measure ensure non-discrimination between suppliers?
All suppliers provide the compensation to electricity consumers and in turn get
compensated themselves.
d. How are suppliers compensated for supplying below costs?
All suppliers get compensated by the Environmental Investment Centre.
e. Are there any restrictions on the eligibility of suppliers to provide offers based on the
public intervention?
No restrictions are in place.
25
https://www.riigiteataja.ee/akt/116092022012