The Estonian competition authority has authorized a new pricing formula for the Tartu network, resulting in a new heat price cap of €64.69 per MWh, down from the previous cap of €85.80 per MWh.

The primary reason for this price reduction is the decrease in the purchase prices of fuels, such as wood chips and natural gas, as well as electricity. The new price cap also incorporates investments totaling approximately €16 million, which were not included in the previous price cap.

A significant portion of these investments is dedicated to the renovation of heat pipelines, leading to a pipeline loss rate of under 10% in Tartu's district heating network, which is considered an excellent indicator of efficiency.

The approved pricing formula includes variable factors such as the purchase prices of fuels and electricity, with natural gas and electricity prices based on projected market rates, while wood chip prices are based on contractual rates. If actual fuel purchase prices fall below the levels used in the approved price cap, Gren Tartu AS is obligated to sell heat at prices lower than the approved cap, which the company has already implemented.

The competition authority oversees various sectors, including competition, electricity, natural gas, district heating, postal services, water supply and sewage, railways, aviation, and ports, while also preventing unfair trading practices in the agricultural and food supply chain. The authority operates under the jurisdiction of the Ministry of Justice and Digital Affairs.