Premium tariff
Updated: 17.01.2019
Author: Lilian Pungas
Where an electricity producer sells electricity on the free market and exports it to the electricity grid, the transmission system operator shall pay a bonus on top of the selling price (§ 59 par. 1, 2 ELTS). This support is granted following European Commission’s guidelines on state aid for environmental protection and energy (§ 59 par. 2.1 ELTS). The expenditure is borne by consumers and is calculated by the transmission system operator with respect to the volume of network services used and the amount of electricity consumed via direct line (§ 59.2 par. 1 ELTS).
Eligible technologies
All renewable electricity generation technologies are eligible as long as their net capacity does not exceed 125 MW (§ 59 par. 1 ELTS). However, for some technologies, such as biomass, eligibility is subject to compliance with certain requirements (§ 59 par. 1 no. 2-4 ELTS).
Electricity produced for the power plants’ own use is not eligible for support (§ 59.1 par.2 no. 3 ELTS).
The producer is not granted support when it lacks the required environmental authorisations, is in breach of the respective conditions or is not in compliance with the obligation to repay state aid (§ 59.1 par. 2 ELTS).
| Wind energy | - The tariff scheme will be suspended for the current calendar year as soon as the generation of total amount of 600 GWh of electricity from wind energy has already been supported (§ 59.1 par. 5 ELTS).
- Electricity generated by a wind power plant is not eligible if the plant operator has received other investment subsidies from the state for the relevant generating installation (§ 59.1 par. 2 no. 1 ELTS).
- The generating installation’s net capacity does not exceed 125 MW (§ 59 par. 1 ELTS).
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| Solar energy | Eligible as long as the net capacity of the generating installation does not exceed 125 MW (§ 59 par. 1 ELTS). |
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| Geothermal energy | Eligible as long as the net capacity of the generating installation does not exceed 125 MW (§ 59 par. 1 ELTS). |
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| Biogas | Eligible as long as the net capacity of the generating installation does not exceed 125 MW (§ 59 par. 1 ELTS). |
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| Hydro-power | Eligible as long as the net capacity of the generating installation does not exceed 125 MW (§ 59 par. 1 ELTS). |
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| Biomass | Eligible under following conditions: - The electricity must be generated by high-efficiency CHP plants (§ 59 par. 1 no. 2; § 108 par. 1.2 ELTS).
- The net capacity of the generating installation does not exceed 125 MW (§ 59 par. 1 ELTS).
- Electricity generated from biomass in a condensation process is not eligible (§ 59 par. 1 ELTS).
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Amount
The bonus amounts to € 0.0537 per kilowatt hour and does not differ for the individual technologies (§ 59 par. 2 no. 1 ELTS). However, CHP plants with a production capacity below 10 MW using waste, peat or oil-shale retorting gas are eligible for a tariff amounting to € 0.032 per kilowatt hour (§ 59 par.2 no. 2 ELTS).
| Wind energy | € 0.0537 per kWh |
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| Solar energy | € 0.0537 per kWh |
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| Geothermal energy | € 0.0537 per kWh |
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| Biogas | € 0.0537 per kWh or € 0.032 per kWh |
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| Hydro-power | € 0.0537 per kWh |
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| Biomass | € 0.0537 per kWh or € 0.032 per kWh |
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Addressees
Entitled party: The persons entitled are the energy producers (§ 59 par. 1 ELTS).
Obligated party: The person obligated is the transmission system operator (§ 59 par. 1 ELTS).
Procedure
Process flow | Plant operators are statutorily entitled against the transmission system operator to the payment of a guaranteed bonus for every kilowatt hour of electricity produced (§ 59 par. 2 ELTS). The transmission system operator shall pay the support to electricity producers by the 21st of each month (§ 59.2 par.9 ELTS).
Obligation to inform. By the 5th of each month the electricity producers must provide the transmission system operator with the data concerning the amount of electricity produced from renewable energies/CHP plants and the proportion of it that was sold using the Premium tariff (§ 58 par 3 ELTS). |
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Competent authority | No authority is responsible for implementing the bonus scheme as the legal framework established by the ELTS applies to private individuals, system and grid operators and not to authorities. |
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Degression
Statutory law does not provide for an adjustment mechanism.
Cap
The amount of electricity from wind energy to be supported is limited to a total of 600 GWh per calendar year (§ 59.1 par. 5 ELTS).
Eligibility period
Eligibility to the bonus system is limited to a maximum of 12 years from the date of commissioning (§ 108 par. 1 ELTS). The commissioning date of a plant or system is the day on which the electricity it produces enters to the grid or a direct line for the first time (§ 108 par. 3 ELTS).
Distribution of costs
| Consumers | In the end, the costs arising from the premium tariff system are borne by the consumers, who are obliged to pay an additional renewable energy fee as part of their electricity bill. (§ 59.2 par. 1 ELTS). |
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| Distribution mechanism | Every 1st of December, the transmission system operator shall publish an estimate of the costs of the bonus scheme on its webpage with the underlying data as well as the calculation methods. This estimate is the basis on which the transmission system operator calculates the costs for the year to come. These costs are proportionally added to every single kilowatt hour of grid services used and of electricity consumed via direct lines. The underestimated or overestimated costs and interest rates of the support scheme will be adjusted accordingly (§ 59.2 par. 1-8 ELTS). |
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Estonia
