District heating prices expected to be lower than in previous years
This heating season in Estonia promises to be slightly cheaper than the previous one, as both natural gas and wood chip prices have fallen.
The weather in Estonia has started to turn cold as autumn sets in, which also means the heating season has now begun.
According to Robert Kitt, head of Utiliitas, Estonia's largest heat producer, this year's prices are expected to be more favorable for consumers than last year's.
"I think that most district heating providers, including us, will keep their prices more or less the same or reduce them slightly. So while there is talk of large price increases in the country in general, district heating is going in the opposite direction," said Kitt.
"We have a total of just under 10 regions. In two of them, the price drop has been over 5 percent, which is why we were forced to adjust the marginal price, and in the others, it is less than 5 percent," he added.
Another of Estonia's major heat producers, Adven, has also noticed a drop in prices.
"Prices are falling compared to the same month last year. Prices are down by an average of 4 to 5 percent. We have seen the biggest declines in Rakvere and Haabneeme, where prices are down 7 percent compared to last year," said Raivo Melsas, Adven's Estonia business manager.
Heating is becoming cheaper due to falling fuel prices. The price of natural gas has, for instance, fallen to the same level it was at in 2021, and it is not expected to rise again significantly this fall. Natural gas is now half the price it was this February.
"Prices in the district heating sector have fallen compared to the previous heating period. This is due to the fact that fuel prices have fallen. If we take the price of wood chips, for example, they have fallen by 12 percent compared to last year. Shale oil is also around 14 percent cheaper and natural gas prices have undergone significant changes," said Külli Haab, deputy director general of the Estonian Competition Authority.
By law, district heating producers are required to change their prices in response to the fall in fuel prices. The Competition Authority coordinates the maximum price, which is based on the producer's understanding of a reasonable level of consumption.
"Companies can lower the maximum price themselves and many companies have done already. Those that haven't yet will do so, as there will definitely be significant changes in October's prices," said Haab.
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Editor: Michael Cole, Marko Tooming
