| Work Detail |
After Narva faced the threat of yet another increase in district heating prices, the Competition Authority announced that the border city must launch a tender for participants to propose a more efficient solution for heat production than the current method of burning natural gas.
In the last week of August, Enefit Power, a subsidiary of the Eesti Energia group, requested permission from the Competition Authority to raise district heating prices in Narva once again. If the application is approved as submitted, the final price of heat sold to consumers would be around €115 per megawatt-hour (MWh). Just a few years ago, residents of the border city were paying less than €50 per MWh.
Külli Haab, deputy director general of the Competition Authority, stated that the companys request is still under review and may not be granted at the price requested.
However, Enefit Powers application has prompted the Competition Authority to take more significant steps by demanding that a tender for heat production in Narva be announced. AS Narva Soojusvõrk, also part of the Eesti Energia group, must issue the tender notice by October 1 at the latest.
"The aim is to have alternatives available in the future," Haab said. "If someone wishes to propose solutions with more affordable production options, then why not."
Estonias third largest city heated using gas
Currently, district heating in Narva is produced using natural gas. Historically, the city benefited from surplus heat from the Baltic Power Plant, but as the cost of carbon emissions increased, keeping the oil shale plant operational became increasingly unnecessary.
Last years district heating price increase was driven by the growing reliance on natural gas for heat production. In May of this year, the 11th unit of the Baltic Power Plant was mothballed, leaving the burning of natural gas as the only option to heat homes in Narva.
Academy of Security Sciences border guard study group starts in Narva
A significant step towards announcing a heating tender was taken in June by the Narva City Council, which designated most of the city as a district heating area. This move aims to provide potential heat producers with the assurance that their customers wont switch to alternatives, such as heat pumps.
Narva Deputy Mayor Oleg Karpikov expressed hope that the terms for the heating tender would be finalized by January 1, with the selection of the winner taking a couple of months afterward. He believes that, in addition to the current heat producer, Enefit Power, other interested parties might participate in the tender.
"Like Utilitas or someone else," Karpikov suggested. "I can speculate, but I know that even a company from Finland was interested in coming here. In that sense, we have high hopes for this tender."
Külli Haab noted that competition will depend on the terms of the tender, including whether the network operator and the city of Narva can find locations to establish new potential production facilities. "This is certainly crucial to ensure that the tender actually takes place," Haab remarked.
Current situation might continue for five years
The conditions of the tender should also specify how much time the winner will have to establish the promised production capacity. Külli Haab mentioned that in previous similar tenders, up to five years were allowed.
However, Oleg Karpikov stated that this timeline would not be acceptable for the city of Narva.
Authority to investigate competitive situation in waste collection
"For the municipality, that would be very unfortunate. The most we can wait is two years, no more," Karpikov said. "In two years, we need some kind of result, whether its a stable price or a lower price. Of course, we would like the price to go down, but I dont believe that will happen. However, having a stable price is our expectation."
Enefit Powers CEO, Andres Vainola, commented that its difficult to predict how long it would take to establish new capacities without seeing the tender conditions. "It could take anywhere from a few years to five years. It depends on what technology and conditions the Competition Authority accepts," Vainola stated.
Eesti Energia would prefer a mix of generation
Eesti Energia has proposed various visions for the future of heat production in Narva. In a letter sent to the Ministry of Finance last fall, the company introduced a so-called combined production solution.
According to this plan, during hours when electricity prices are low, heat would be produced by heat pumps connected to the district heating network. During hours of high electricity prices, the surplus heat from a new peak power plant could be utilized. At that time, Eesti Energia also discussed plans to build a new biogas plant for this purpose.
The letter noted that during winter hours with average electricity prices, the cheapest heat could be produced by a boiler house burning biofuels. The combination could also include a heat storage system and the existing gas boilers currently heating Narva, which would serve as reserve capacity.
Andres Vainola mentioned that nearly a year later, it is difficult to elaborate on Eesti Energias plans. He reiterated that much depends on the expectations for the tender. However, Vainola emphasized that a good solution would have a minimal carbon footprint and make maximum use of local energy sources.
"Such options would reduce our dependency on global market prices for natural gas," Vainola noted. "Whether its wood waste, a bio-boiler, a heat pump or even an additional battery storage system – who knows. These possibilities are available both to us and other potential participants in the heat production tender." |
