{"id":4787,"date":"2024-04-25T11:58:21","date_gmt":"2024-04-25T08:58:21","guid":{"rendered":"https:\/\/energiatarkus.energia.ee\/uncategorized\/reader-asks-how-is-the-price-of-electricity-set\/"},"modified":"2024-05-02T14:50:24","modified_gmt":"2024-05-02T11:50:24","slug":"reader-asks-how-is-the-price-of-electricity-set","status":"publish","type":"post","link":"https:\/\/energiatarkus.energia.ee\/en\/relevant\/reader-asks-how-is-the-price-of-electricity-set\/","title":{"rendered":"Reader asks: “What does an electricity bill consist of?”"},"content":{"rendered":"\n

Electricity is an integral part of our lives – we need it whether we’re at work, walking down the street or doing domestic chores. As the electricity bill we receive each month has a direct impact on our monthly budget, it is only natural that people want to know exactly what they are paying for when they use electricity.<\/strong><\/p>\n\n\n\n

The amount you see on your monthly electricity bill is made up of three main components: the cost of electricity, the network charge and national taxes such as the renewable energy tax and electricity excise tax.<\/p>\n\n\n\n

The first of these, the electricity cost<\/strong>, depends on your electricity package<\/a> and your monthly electricity consumption. The price of electricity includes a margin to cover the risks and operating costs of the electricity trader, a monthly fee to maintain information systems and develop web applications, among other things, and VAT, a national tax on the consumption of all products and services.<\/p>\n\n\n\n

The network service fee<\/strong> is paid to the network provider for delivering the electricity to your home. This fee covers the costs of maintaining and developing the necessary infrastructure. The price of the network service cannot be influenced by the customer and is agreed annually by the Competition Authority. Elektrilevi is the largest network provider in Estonia.<\/p>\n\n\n\n

The renewable energy tax <\/strong>is a charge set by the state to support the production of clean energy in Estonia. It is calculated and published annually by the transmission system operator Elering. The electricity excise tax<\/strong> is a national tax that finances environmental benefits.<\/p>\n\n\n\n

The total cost of both the network service fee and the national taxes depends on how much electricity you have consumed.<\/p>\n\n\n\n

Estonia operates on the Nord Pool electricity market<\/strong><\/h2>\n\n\n\n

Since 2013, the market price of electricity has been set on the Nordic and Baltic Nord Pool Spot power exchange, which includes Norway, Sweden, Finland, Denmark, Latvia and Lithuania, along with Estonia. Each country has at least one pricing area, which in turn is connected to other surrounding pricing areas (see dark blue lines on the map). <\/p>\n\n\n\n

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Pricing areas of the Nord Pool Spot power exchange.<\/em><\/figcaption><\/figure>\n\n\n\n

As transmission capacities between countries are limited, electricity prices may vary from region to region. The price is also affected by the production of renewable energy \u2013 the more green energy a region produces, the cheaper the price of electricity there. <\/p>\n\n\n\n

Similarly, the market price of electricity is created by the interaction of various aspects, which in turn is the reason behind price variability. The price on the stock exchange can be affected by: <\/p>\n\n\n\n