Rising grid fees could deter investment in battery storage

Six energy companies have warned that higher grid fees for electricity storage from next year could discourage new battery projects in Estonia, ERR reported. Elering, the transmission grid operator, said lower fees for battery owners would shift costs to other customers.

Batteries store electricity for later use or for sale back to the grid when prices are higher. Renewable energy company Enery’s head of regulatory affairs, Mihkel Annus, said the planned fee changes could deter new investment.

“Storage brings electricity prices down for end users, and all consumers ultimately benefit if storage is used more widely in Estonia,” Annus said. He said battery use is several times cheaper in Lithuania because of the structure of its grid fees, adding that investments needed by the system and beneficial to consumers could bypass Estonia if storage becomes more expensive.

Elering chief executive Kalle Kilk said the tariff changes were not aimed specifically at battery owners. From next year, the proportions of capacity charges and electricity transmission charges will change, affecting some customers, particularly battery operators, differently from others.

Grid fees include a capacity charge, which covers the availability of the network, and a transmission charge. Battery owners are exempt from the transmission component under the law, Kilk said, but the costs associated with their use of the grid remain. He said the revised structure would ensure that customers pay the costs related to them rather than shifting those costs to others. The Competition Authority has approved the new proportions, he added.

Energy companies have also raised their concerns with the Ministry of Climate. Minister Erkki Keldo said the government was seeking a balance that would give both energy companies and Elering certainty for investment. He said Estonia needs more battery parks and storage to lower electricity costs and reduce price peaks, while ensuring Elering can cover its costs and invest in the grid.

Keldo said he would consider whether a solution could be found that allows Elering to collect its grid fees without making new battery parks uncompetitive.