Electricity Producer

According to §7 of Electricity Market Act the producer is an  electricity undertaking which generates electricity by one or several production units.

In Estonia the Electricity Market Act and the Grid Code are primarily regulating the issues related to production of electricity. Both Electricity Market Act and Grid Code classify producers into groups depending on their production capacity.

Small producers are producers whose generation unit’s net production capacity and production capacities of companies belonging to the same group, do not exceed 10 MW. An important limit for small producers can be also defined by 1 MW production capacity, where substantially simplified operating procedures for the producers are set. 

Producers are treated differently also based on the fuels used for electricity generation and whether electricity is produced by cogeneration of electricity and heat. According to Electricity Market Act the renewable energy sources are water, wind, solar, wave, tidal and geothermal energy sources, landfill gas, released gas from waste water purification, biogas and biomass.

According to §59 of Electricity Market Act the producer is entitled to sell electricity as a fixed delivery to the seller designated by the transmission system operator (TSO) or receive a subsidy from TSO for sold electricity if it is produced from renewable energy sources; if it is produced in efficient cogeneration regime using waste, peat or oil-shale processing retort gas  as a energy source; if it is produced in efficient cogeneration regime with a production unit which is established instead of an existing power plant which supplies consumers with heat and which has electric capacity not exceeding 10 MW.

Small producer or producer who produces electricity using renewable energy sources or who produces energy in cogeneration regime, has opportunity to sell its electricity to the eligible customers in Estonia, to the distribution network operator or to a licensed energy trading company.

Electricity business is a regional business, electricity price and sales opportunities for producers, however, are formed mainly on the basis of the Baltic and Nordic countries’ free market price and production capacities. Thus, it is important to see and analyze the situation and the opportunities in the broader framework than only Estonia. Nordic Power Management has a thorough knowledge on the field of electricity trading, managing the resale of electricity and organizing the best possible sales portfolio for producers like Fortum Tartu Ltd/ Anne Heat Ltd, Pakri Wind Park LLC, Viru-Nigula Wind Park LLC, etc.

In a situation where rules and market conditions are  constantly changing it is important to know all threats and opportunities for producers that exist in the market both in the short and long horizon period.

It is extremely important to understand all the factors affecting the success of both smaller and larger capacity producers already when making a business plan. Nordic Power Management can assist you in putting together a successful working plan. Practice shows that involving additional knowledge and experience in the planning process already is considerably worthwhile. Contact us if you need any advice on improving or developing the electricity production business.