Heating

Foto: Kersti Telve

Unlike the price of electricity and gas, the price of district heating is not determined by market conditions but by the Competition Authority. District heating consumption in Estonia is 4,200 GWh per year. There are 159 district heating districts with a maximum heat price approved by the Competition Authority, of which 125 have a sales volume of less than 10,000 MWh per year. 

Over the last decade, the district heating sector has undergone a very significant evolution. While in 2008, for example, the district heating network of Utilitas Tallinn produced almost 100% of its heat from natural gas, then today the share of gas has fallen to 34%. Similarly, consumption of gas and liquid fuels has decreased also in other district heating networks. Of the larger district heating networks, heat production in Tartu and Pärnu is predominantly uses wood chips, and in Narva and the Kohtla-Järve-Jõhvi-Ahtme region, predominantly oil shale and shale gas. Heat is also produced predominantly from wood chips by heating plants in regional centres. The share of heat production using only gas or shale oil as fuel has fallen to 5%. Adven-owned natural gas heating networks in Tallinn have been the most active. 

For district heating, it is important to continue the transition to renewable energy, as well as reducing the share of natural gas and oil. The future of heat supply in Ida-Viru County is also an important issue. So far, oil shale and carbonisation gas have provided cheap heat, but in terms of the green revolution, it is a problematic heat supply. 
As the production of heat is a monopoly sector where the consumer does not have a choice of service provider, the price of district heating (both production and network service) is coordinated by the Competition Authority. With regard to heat production, the District Heating Act provides for free access to the heat network under certain conditions. The Competition Authority has the right to assess the economic viability of heat supply and, if production is economically inefficient, the right to require the network operator to call for a competition.

Narva Soojus

One of the most important recent calls for competition for the purchase of heat has been the request expressed by AS Narva Soojusvõrk to enter into a long-term contract for the purchase of up to 450,000 MWh of heat per year with a nominal capacity of 200 MW to heat the district heating network in the Narva region. Based on the principle of technological neutrality, the competition is open both to companies planning to build a new plant (e.g., a cogeneration plant) to provide this capacity as well as to producers based on an existing technology. AS Narva Soojusvõrk submitted the conditions for the public competition to the authority for approval on 30 December 2021.