The offer submitted by the Estonian natural gas importer and distributor Eesti Gaas did not qualify in the tender of the transmission system operator Elering because Eesti Gaas is not allowed to treat Elering differently from its other customers due to its market position.
«In the case of this public procurement tender Elering set the conditions how gas has to be sold to it. Our market position does not allow us to treat Elering differently from other customers,» Eesti Gaas board member Raul Kotov told BNS in a comment on the outcome of the tender.
According to Kotov, different treatment is not possible under the competition law and furthermore, in the company's opinion it would not be justified in Elering's case.
Elering's tender conditions stipulated a fixed-price bid but in the offer submitted by Eesti Gaas the price of natural gas was tied to a price formula.
The public procurement tender for supplying gas to the Kiisa standby power plant was won by the state-run energy group Eesti Energia that offered gas at a fixed price of 0.03369 euros per kilowatt-hour.
Eesti Energia in turn buys natural gas under a purchase contract from Eesti Gaas, a spokeswoman said.
Depending on calorific value, the Kiisa plant consumes approximately 230 cubic meters of natural gas to produce one megawatt-hour of electricity. When both phases of the plant are working at full capacity it will use about 60,000 cubic meters of gas per hour.
The first phase of the standby power plant with a capacity of 110 MW was finished this spring and it is currently in the trial period.
The second phase is scheduled to be completed by fall 2014. The total capacity of the plant representing an investment of more than 130 million euros is 250 MW.