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Electricity Cost as a Driver of Competitiveness in Northern Europe: The Case of Estonia

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  • Marko Viiding
  • Kalev Kallemets
  • Peeter Pikk

Abstract

The Estonian electricity market will be fully opened in 2013. Given ever-stricter environmental standards limiting the use of domestically available oil shale as main fuel for electricity generation and expansion of regional power pools, it is widely believed that Estonia’s currently low electricity prices are set to increase. Authors argue that cost differentiation and regional competition will be based on transmission charges and add-on fees. Measuring exporting industry’s total electricity costs as a share of total production costs shows that for the majority of Estonian producers electricity costs make up only around 1–2 % of production costs, but noteworthy exceptions exist. Copyright Springer-Verlag Wien 2013

Suggested Citation

  • Marko Viiding & Kalev Kallemets & Peeter Pikk, 2013. "Electricity Cost as a Driver of Competitiveness in Northern Europe: The Case of Estonia," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(3), pages 367-381, February.
    • Handle: RePEc:spr:trstrv:v:19:y:2013:i:3:p:367-381
    DOI: 10.1007/s11300-012-0252-4
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    References listed on IDEAS

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    1. Paul Joskow & Jean Tirole, 2007. "Reliability and competitive electricity markets," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 60-84, March.
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    More about this item

    Keywords

    Electricity cost; Cost-based competitiveness; Estonia; Northern Europe; N74; P28; Q48;
    All these keywords.

    JEL classification:

    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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