The state has set sector-specific goals for Elering, requiring the company to ensure a reliable supply of energy to Estonia's electricity and gas consumers while supporting the energy policy objectives of both Estonia and the European Union.

This means Elering must maintain and develop the electricity and gas transmission networks and cross-border connections, as well as ensure the availability of reserve capacity.

"Elering AS's investments in energy system development must take into account not only everyday supply security for consumers but also Estonia's energy security needs, competitive end-user energy prices and the potential use of flexibility services," according to the new owner expectations.

The Ministry of Climate emphasized that the most important aspect of the updated expectations is Elering's obligation to keep end-user energy prices competitive with the average in neighboring Baltic Sea countries.

The Competition Authority is currently reviewing Elering's application to raise the transmission service price from €12.50 to €17.20 per megawatt-hour starting next year — an increase of 37.6 percent. Elering cited rising costs and the development of renewable energy as the reasons behind the proposed hike.

Meanwhile, distribution system operator Elektrilevi is seeking to increase the network fee by 20 to 50 percent over the next decade, citing the need to invest €1.6 billion to meet national targets. The Ministry of Climate believes, however, that improving the reliability of the power grid could be achieved at a lower cost.

Expectations also include creating hydrogen transmission network

The updated ownership expectations for Elering specify that the company, in cooperation with other national system operators, must begin preparations for the creation of a hydrogen transmission network and transit infrastructure.

Elering is also expected to plan new cross-border connections, taking into account factors such as improving supply security, enhancing the competitiveness of electricity and gas end-user prices, reducing environmental impact and strengthening energy security.

The document explicitly states that Estonia's supply security standards must be met and that the country must maintain sufficient controllable electricity generation capacity.

A second major sectoral objective outlined in the expectations is that Elering is responsible for ensuring the conditions for a transparent and efficient functioning of the electricity and gas markets. This includes treating market participants equally and promoting competition, which should also help keep energy prices competitive.

The expectations also emphasize that Elering must ensure the free flow of energy within the energy system and across connections with neighboring systems, while maintaining a leadership role in the development of both Estonia's and the regional energy markets.

"The aim of developing energy markets is to ensure energy availability in a balanced way — at the most affordable end price possible while maintaining supply security that meets societal needs," the document states.

This also assigns Elering the responsibility of analyzing future energy scenarios and identifying critical challenges.

Elering nevertheless expected to be profitable

As a key measure of success, the ownership expectations state that electricity and gas end-user prices in Estonia must remain competitive compared with other Baltic Sea countries.

Elering is also tasked with ensuring the continuity of vital services. To fulfill this, the company must direct investments toward mitigating risks stemming from technological vulnerabilities or natural forces.

On the financial side, the document sets the goal for the company to be managed profitably and cost-effectively, while ensuring stable returns for the owner.

The ownership expectations also outline broader principles: the company must set an example through sound governance and high business ethics, effectively manage risks, minimize the negative impact of its operations and ensure the uninterrupted delivery of vital services.

Additionally, the state expects Elering to avoid business relations with Russia and Belarus, contribute to research and development in the energy sector and develop and maintain energy expertise.

Responsibility for meeting these state-set goals lies with Elering's supervisory board and management board.

The state reviews its ownership expectations at least once every three years. The previous version of the expectations was adopted in 2022.

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