Kõne Euroopa Parlamendi avalikul kuulamisel “The Future of the EU Electricity Market”,  10 juuli 2017

Distinguished Members of the European Parliament,

Ladies and Gentlemen,

Estonian electricity market opening has been a success story…. Not just a positive coincidence…  Estonians have had the belief that best way to keep lights on and homes heated is the well-functioning energy market. Estonia liberalised the wholesale electricity market in two thousand ten together with start of the Nordic electricity exchange Nord Pool Spot operations in Estonia. In two thousand thirteen the electricity market was opened for all consumers and producers, without exeptions for instance to protected customers and balancing responsibility to everyone. All consumers buy their electricity from the free market at the market price.

The benefits of liberalised wholesale market were transferred to consumers thanks to introduction of central electricity data hub created by Elering, which allows for simple supplier switch (supplier switch rate has been 38%), causing sharp competition between traders and diminishing the sales margins (as low as 0,18 €cent/kWh level). Consumers can buy electricity based on real hourly spot prices (currently share of hourly priced contracts are 30%). All this has resulted in lower electricity prices than would have been the previous regulated price.

Estonian electricity market digitalisation together with full liberalization has transferred the benefits directly to the Estonian electricity consumers. These steps in parallel with full smart meter rollout has enabled probably the most efficient retail electricity market in Europe.

Data hub of one country and for one energy source is good, but not enough to empower consumers to become active players on the energy market.

Elering has made the next step by creating energy smart grid platform Estfeed, which links and makes available near real-time electricity, gas and presently in pilot stage district heating production and consumption data as well as information from external data hubs such as weather forecast data, day-ahead electricity prices or renewable energy production and subsidies information.

As data security is vital, we use for data management a highly secure Estonian government IT platform x-road and ID-card, used for all e-estonia services, for example tax declarations and parliament elections.

In developing the EU energy market further through energy system digitalization we see the need to be more bold and ambitious compared to the current proposal of the Clean Energy Package to achieve more efficient EU energy market.

First, data management has to move to real time. This allows to use measured data for managing consumption and production devices. As an example, controller in my house should be able to make real time consumption-production-switch between energy sources based on information available from the central data hub. For this is a crucial set in place EU wide energy data exchange standards. We do not need a one data hub for all European Union, but we have to guarantee that different energy data hubs in different members states able to communicate each other and with devices.

This brings us to another topic, I urge Parliament to seriously consider in time of the Clean Energy Package discussions distribution system operators neutrality and unbundling from traders issue. In Estonia, I have led unbundling of both electricity and gas transmission system operators from the vertically integrated incumbents and know how this support development of efficient energy markets. In the future, in the energy system less energy and more data. In this respect is important to separate DSOs actually from energy suppliers through ownership unbundling.

Secondly, further integration of energy markets requires well organized cross-border data exchanges. It is reasonable to store data nationally (national data hubs) but a regional, cross-border data exchange should be guaranteed for retail not only wholesale market integration.

Third, move from different energy sources based markets to single energy market. For example, make electricity and gas price arbitrage for consumers actually work, so in future we do not speak about electricity and gas markets, but single cross-border energy market. Gas in pipelines and electricity in overhead lines compete on equal basis.

The future is one energy market integrating different energy sources. Arbitrage options trough integrated real time based electricity, gas and district heating data hubs actually empower the consumers and brings them as equal partners onto EU energy market.

Thank you very much!

 

 

 

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