Estonia serves 62% of citizens with district heating, of which over half is provided through direct renewables and recycled heat. Estonia’s national energy strategy is to fully regulate the district heating sector and its prices. Therefore, from the viewpoint of the district heating companies, there is no open market for district heating. However, a customer has the right to disconnect from the district heat network without any penalties and use any local solutions for the production of heat.
The graph demonstrates the energy source used to satisfy heat demand in Estonia. District heating dominates heat demand supply, with a 52% of market share, followed by renewables sources, with a 43% market share. The use of heat pumps has increased considerably in recent years and, as a result, Estonia is position third in the world in terms of its number of heat pumps per capita. Although district heating dominates, it is common for smaller apartment blocks to still utilise individual boilers.
Combined heat and power (CHP) accounted for 16% of electricity generation in 2013 and provided 37% of the requirements for district heating. Estonia adopted an amendment of the Electricity Market Act with regards to feed-in tariffs for CHP based electricity, which resulted in several new CHP projects. As of 2010, there were 19 large-scale CHP plants in Estonia, with a further waste-fired CHP plant commencing construction in Tallinn in 2013.