Energy, Estonia, Investments

According to Peep Soone, CFO of Elering, the accounting principles for recording the proceeds from the cross-border transmission capacity auction changed significantly since 1 July, leading to a reduction of Elering's revenue and profits.

In accounting, these proceeds are no longer recorded as revenue; instead, these are transferred to a special fund that Elering is going to use for financing investments for increasing cross-border transmission capacity in the future. At the same time, network fees are not going to be affected by the investments that are financed in this manner.

Elering’s third quarter revenue fell by 7.2 million euros compared to the same period in 2013; however, the operating costs remained virtually on the same level. The main reason for the reduction of revenues was the aforementioned change in accounting principles (effect: –6.6 million euros). However, it was influenced partly also by the lower tariffs that took effect in April this year. Revenues from the sale of balance services dropped by 0.8 million euros. Financial costs in accounting grew by 2.0 million euros, because of the amount of capitalised interest reduced due to the completion of large investment projects.

Cash flow from operations was negative by 1.5 million euros, due to the annual interest payment of bonds made in the third quarter. Cash flow from investments was 25.8 million euros and Elering borrowed 35 million euros from the Nordic Investment Bank in order to finance investments.

Elering is Estonia’s independent and standalone transmission system operator, whose main task is to ensure that Estonia’s consumers enjoy a consistent, high-quality electricity supply. To ensure the security of supply, Elering maintains and develops the domestic transmission network and external interconnections. Elering manages Estonia’s electricity system in real time, ensuring the functioning of the transmission network and the balance between output and consumption.