The government approved the renewable energy fee this week, and this will save up to 80 major companies nationwide thousands or even tens of thousands of euros per month in input costs.

"The renewable energy fee is one component of the final electricity price, and especially for large electricity consumers, electricity and its price are a very important input. Making this competitive is important for the competitiveness of our economy. You could say that most of our neighbors offer such additional discounts to large consumers," Minister of Economic Affairs and Industry Erkki Keldo (Reform) told Aktuaalne kaamera.

However, this boon will be short-lived, some sector representatives say, as new electricity charges being added from next year will cancel it out.

Pulp producer Estonian Cell, the most energy-intensive company in Estonia, on its own consumes 2.5 percent of the country's total annual electricity. The company's electricity bill is around €20 million per year, and thanks to the continued high electricity prices, the company has had to reduce production to 60 percent and cut its workforce by a quarter.

The final electricity price will make operations more difficult next year even as the renewables fee slash was most welcome, board member Meelis Kuzma said.

The new levies will include an islanding fee, referring to the division of an interconnected power grid into individual disconnected regions with their own power generation sources.

"From January 1, new charges in the form of a balancing capacity fee and an islanding fee will apply to all consumers. In combination with these new charges and the differentiation of renewable energy fees, in the case of Estonian Cell, an energy-intensive company operating at full capacity would end up paying €1 million more per year than before," Kuzma said.

This means production volumes will remain at 60 percent of full capacity next year as well, he said.

The renewable energy fee discount applies to companies whose annual electricity consumption exceeds one gigawatt-hour. There are nearly 80 such companies nationwide, and these would receive a discount of up to 85 percent.

For example, a medium-sized dairy processor consuming 7 gigawatt-hours of energy per year would see its costs fall by an average of €4,000 per month. For a larger company, such as a wood pellet production plant consuming 50 gigawatt-hours, costs would fall by an average of €28,000 per month.

Jaano Haidla, board member at Graanul Invest, a firm that produces pellets, said the measure merely alleviates the general rise in electricity prices for the meantime, but overall input costs will rise next year anyway.

"In essence, it is as if the electricity price is cut by €6.2 per megawatt-hour, but at the same time next year the balancing capacity fee and the security of supply fee are increased by a combined €11.3 per megawatt-hour. So in overall terms, the electricity price still rises," Haidla said.

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