Tallinn, October 31 - Neftegaz.RU. A rapid increase in the price of carbon dioxide (CO2) emission credits and unequal gas pricing by Russia has given rise to large-scale cross-border trade in electricity with Russia, says Hando Sutter, CEO of the Estonian state-owned energy group Eesti Energia.
«The increase in the share of Russian electricity among imports to the Baltic electricity area is very much in correlation with the price increase for the CO2 quota,» Sutter said at the presentation of Eesti Energia's interim report for the 3rd quarter.
He noted that the cause of the increase in imports is the cheaper price of Russian electricity as a result of there being no costs related to CO2 quotas. «We are taxing ourselves out of the market to then buy energy produced in Russia,» Sutter observed. «It's just like the Latvian alcohol rally: we forget that we've got competition the other side of the border. The situation is similar in Finland.»
In addition to the absence of quotas, electricity generated in Russia is also made cheaper by the difference in the price of gas. Namely, Russian natural gas for Russia's own gas-powered electric power plants is cheaper than the price at which Russia sells gas to EU member states.