Addressing the issue of phantom subscribers is commendable, but there is also a lot of uncertainty

The Chamber submitted an opinion to the Economic Committee of the Parliament of Estonia on the planned amendments to the Electricity Market Act, which mainly deal with the problem of so-called phantom subscribers, i.e., the situation where producers create the technical capacity to produce electricity and transmit it to the grid, but do not actually do so. As a result, the development of the electricity network and the addition of new electricity producers to the network has been significantly hindered. The Chamber considers it correct to deal with the problem of phantom subscribers, but also proposed several amendments to the bill.

Setting different fees for phantom subscribers raises questions
According to the draft, the network operator has the right to ask the producer for a fee of 38,000 euros for each unused megavolt-ampere, if, in the case of solar panels, production has not been started within two years of the conclusion of the connection agreement, and also within two years of the conclusion of the network agreement. The Chamber wants to find out whether in reality there may be situations where some producers have to pay a fee based on both the connection agreement and the network agreement. The chamber expressed its opinion that if in some situations there is double charging, then we are against it.

In our opinion, we also pointed out as a question whether a producer is exempted from paying fees even if, for example, for one hour during a year, he switches on all his electricity generation equipment and does not use any of them the rest of the time.

According to the Chamber, producers who delayed less time in starting production should be distinguished from those who delayed more. According to the current wording of the bill, a fee of 38,000 euros per unused megavolt-ampere would apply both to those who delay production by three months longer than stipulated, and to those who delay by ten months.

For example, we can imagine a situation where producer A and producer B install solar panels and create the capacity to transmit electricity produced from renewable energy to the grid. However, after one year from the conclusion of the connection agreement, neither of them has started production. Producer A will start transmitting electricity to the grid one year and three months after the conclusion of the connection contract, and producer B will start transmitting electricity to the grid one year and ten months after the conclusion of the connection contract. However, both are subject to the same fee - 38,000 euros per megavolt-ampere.

In the Chamber's opinion, this is not reasonable, which is why we made a proposal to the Economic Affairs Committee of the Parliament of Estonia to consider providing for exceptions so that the payment of the fee for the delay would be proportional to the length of the time delay.

Charges to producers should not apply in the event of an obstacle beyond the control of the producer
Several companies that expressed their opinion on the bill were of the opinion that it would be unfair to impose charges on producers who have not started generating electricity within the prescribed period for reasons beyond their control. We therefore asked the Economic Affairs Committee to consider introducing an exemption from the payment of the fee in situations where the delay in starting the production of electricity is due to reasons beyond the control of the producer.

Producers should be given the possibility to add other technologies to existing technology
The bill stipulates that the technology specified in the connection application by which electricity will be produced (i.e., solar energy, wind energy or storage energy) cannot be changed. Currently, technology modification is allowed. Companies that have expressed their opinion on the draft have very different views on this issue.

In its opinion, the Chamber of Commerce expressed its support for the middle ground, and we asked to consider the possibility of adding other technology to the technology stated in the connection application, if in the case of the technology stated in the connection application, the production equipment of the corresponding technology has been installed to the extent of at least 50 percent of the production capacity stipulated in the connection agreement.

The deposit paid at the conclusion of the connection agreement could be smaller
According to the bill, producers whose production equipment has a capacity of more than 15 kilowatts must pay a deposit in the amount of 38,000 euros per megavolt-ampere when signing a connection agreement.

The Chamber of Commerce is of the opinion that this fee could be lower, because otherwise it may affect the interest of some potential producers to start producing electricity.

The amendments will enter into force in accordance with the general procedure, i.e., ten days after their publication in Riigi Teataja. The exact date of entry into force of the amendments is currently unknown.

The planned changes can be found here.