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The matter of significant national importance “How to be victorious in the energy war?” was discussed in the Riigikogu at the initiative of the Economic Affairs Committee.

Chairman of the Economic Affairs Committee Kristen Michal, Member of the Board of Utilitas Wind Ltd Rene Tammist, Chairman of the Board of Elering Ltd Taavi Veskimägi and Green Transition Policy Coordinator at the Government Office Kristi Klaas made reports at the sitting.

In his report, the Chairman of the Economic Affairs Committee Kristen Michal said that many people were feeling as if the worst part of the energy war was over. “The markets have calmed down, containers are full, the global economy is cooling down, consumption is decreasing, and prices are falling. However, I would like to say something to this session hall here. It is a rule in the Riigikogu, is it not, that whoever speaks from this hall speaks to the Estonian people. The people are our employer, and we have the duty to tell our employer that work is being done in various processes but all options that may be unpleasant will also have to be prepared and thought through. This means that our neighbour’s ill-will in various games may also affect our energy sector this winter and maybe also next winter. So therefore it is necessary to be ready and to hope for the best but be ready for the worst,” he said.

The Chairman of the Economic Affairs Committee summarised what measures mitigating the complicated situation in the energy sector the legislature had adopted. Among other things, it had created preconditions for a gas reserve and the LNG receiving capability, increased the renewable energy target and established a universal service and a wind turbine charge. “What is on our agenda during this parliamentary term? A release of network resource and the resolution of the problem of ‘phantom’ connections. We have all read in the newspapers and we have even discussed here in this session hall how it is possible that if someone wishes to increase their connection volume to use a larger electric radiator and receives an outrageously expensive offer, the explanation is that a large number of connections have been made to the grid to reserve capacity, maybe some of good will and others maybe with a dubious intention. And therefore so much money is asked for new grid connections simply because the grid capacity is reserved but no actual generation is taking place. Those ‘phantoms’ will have to be removed from the grid in any case and we are working on it together with businesses,” Michal said.

He also highlighted the work that was being done on the simplification and acceleration of plans and pointed out some issues that the following parliament might discuss and decide. “Some like it and some do not but saved energy is the cheapest. It is necessary to think how to increase its amount,” Michal noted. In his words, everything to do with increasing the energy efficiency of the housing stock is of critical importance. In addition to this, he highlighted the regeneration and increase of energy security and supply security. “Controllable capacity choices and choices regarding a nuclear power station will have to be made and oil shale will have to be used in the meantime,” he specified. “When establishing large offshore wind farms, we are in competition with the rest of the world and our neighbours. It would be worthwhile to think how we as a country and nation will be able to increase our economy by bringing new developments here,” the Chairman of the Economic Affairs Committee said.

Member of the Board of Utilitas Wind Ltd Rene Tammist said that Russia having started the war of conquest in Ukraine and using the energy weapon against European countries had had a devastating effect on our economy, driven the economy into a recession and brought about inflation figures the likes of which we had last seen three decades ago. “There is only one way to exit this situation. It is to establish new and more affordable generation capacities that would replace the more expensive ones, reduce dependence on imported fuels and give long-term security to businesses and households,” he assured.

Tammist painted a picture of the future of the energy sector. “Wind energy has the greatest growth potential. The generation of wind energy would need to increase ninefold in order to achieve the target.” In his words, this would require wind energy generation capacities on land and offshore. “The continuing use of oil shale and wood grid blocks suitable to bridge wind gaps, and the existing combined heat and power plants would be an answer to the question of where we get electricity when the wind is not blowing and the sun is not shining. However. this response cannot be given endlessly,” he said. He added that therefore the best energy experts who had been drafting the energy road map had paid special attention to the potential future generation portfolio where the depreciating hybrid blocks would be gradually replaced by alternatives. “The response is a combination of additional generation capacities, storage solutions, peaking power plants and consumption management solutions. In the case of a potential scenario, future-proof power generation will require additionally hundreds of megawatts worth of solar panels, a thousand or so megawatts worth of offshore wind farms and onshore wind farms, and the implementation of cogeneration potential. Such a generation portfolio would cover the consumption for 95 per cent of time. If, in the way of short-term storage, we add to this batteries, water pump storage, and peaking power plants operating on biomethane or on methane generated from hydrogen, we will be able to supply ourselves with electrical energy as well.”

Tammist confirmed that affordable energy prices were a good problem to have because the solution would help the exporting industry as well as make our country more attractive to new investments. “The future generation portfolio would be nearly three times more affordable for consumers than the price of universal service that Eesti Energia is applying for. It would help the exporting industry and the services sector with climate neutral products and services in foreign markets, and would contribute to economic growth and employment,” Tammist said. In his opinion, it is clear that these are significant investments, but Estonia would not escape investment one way or another because it would not be possible to rely on oil shale power plants forever. “Investments should be made by the private sector, in order to find the quickest and most efficient ways to realise the constructions of the solutions. What will be needed for this, however? First, planning and authorisation procedures will need to be shortened so that we could complete plans in one or two years as is the case in our neighbouring countries. Second, it will be necessary to clear up the mess in grid connections and to develop the grid to receive distributed energy. And, third, a price floor would help contribute to the management of funders’ risks.”

In his report, Chairman of the Board of Elering Ltd Taavi Veskimägi focused on the development of the power grid and explained that four major aims had been directing the development of the Estonian power grid in the recent decade. “In terms of ensuring supply security, of course most importantly the Government of the Republic together with the other Baltic states and the European Commission has committed to synchronising the Baltic states with the continental European power system by the end of 2025.” In Veskimägi’s words, this means that Elering has invested and is investing an amount of ca 350 million euro into the development of the power system. “It is a regular activity but next to it of course there are also activities that are linked to being ready for quick extraordinary separation from the Russian power system should the Russian side disconnect us without advance notice,” he noted. Veskimägi confirmed that, in respect of desynchronisation, much work was under way but very much had been done as well. “The capacity of the grid is gradually increasing. We are better prepared today than we were yesterday, and we will be better prepared tomorrow than we are today,” he said.

According to Veskimägi, the second important aim in the development of the grid has been to ensure supply security in a climate neutral way, and the third aim is connected with the replacement of depreciated grid and equipment, while, fourthly, energy generation as an economic sector is coming ever more clearly into focus. “Another increasingly important issue is how power generation could support Estonia’s economic development. The development of the power grid must be very clearly divided into two parts here. One part is that which is necessary for the supply security of our own Estonian consumers, and the other part is the generation that is necessary in view of the economic development more broadly so that we could for example take our marine areas into active use in economic activities through power generation,” he noted.

As regards supply security in a climate neutral way, however, Veskimägi would like to leave the Riigikogu with a message that the capacity of the main grid is not an obstacle to ensuring Estonia’s power supply in a climate neutral way in 2030. “It is very important here – and this may tend to get mixed up sometimes in the public debate – that there are capacity and energy. Capacity and energy are spoken about interchangeably. When we speak of renewable sources, today, the picture is something like this: we have around 2,350 MW of usable capacity in total in Estonia. Renewable source-based generation capacity accounts for around 900 MW of this, and this 900 MW could generate around 2.7 TWh per year in the perspective of 2030. The potential already covered by a connection contract is 1.8 GW of renewable energy which would be capable of generating 3.1 TWh, with the average capacity factors of both wind and solar power. And if we add just 1 GW of offshore wind to this, then, when we see that Estonia’s domestic power consumption in 2030 could be 9–9.5 TWh, it will be possible to generate around 10–10.5 TWh with generating installations covered with a grid contract or a connection contract today. That is, we can see that already today the grid resource that has been reserved by generating installations is sufficient to ensure Estonia’s own power consumption on the basis of renewable energy sources. It is important that they be constructed,” Veskimägi affirmed.

Green Transition Policy Coordinator of the Government Office Kristi Klaas explained that one important solution to the energy crisis was a rapid increase of the share of renewable energy, and in this regard Estonia had set itself the target that, by 2030, the amount of renewable electricity it created would be equal to its total yearly consumption. “At the same time, in view of the energy crisis, it is very important for us to be able to develop this generation as quickly as possible. However, the main obstacle that has been pointed out so far has been that the administrative procedures that are connected to the development of renewable energy are time-consuming and too complicated.”

Klaas said that it had been agreed in the Action Programme of the Government that, under the auspices of the Government Office, an audit of the processing of plans, environmental impact assessment as well as authorisations would be carried out with the aim of finding ways to speed up the implementation of renewable energy projects. “If we wish to be able to generate as much renewable electricity as we are consuming by 2030, it will be necessary to replace about 7 TWh fossil fuel-based power with renewable sources,” she pointed out. She added that wind energy played a crucial role in the achievement of the target according to the national energy and climate plan. So the audit had been carried out based on the aim that it would be necessary to quickly start developments for a capacity of approximately 1 GW offshore and 1 GW onshore wind energy. “An important focus is on speeding up the existing proceedings because the interest from developers is very high at the moment and we would like to be able to offer as many mitigations and accelerations as possible in terms of the developments that have currently reached various stages already,” Klaas noted. She confirmed that it was possible to speed up the development in all stages.

“And what can we see? It is possible to introduce legislative amendments in two stages. First, there are a number of amendments that can be introduced practically at once. Other amendments will take time to be developed, and it will be possible to adopt them by next February. However, the audit clearly shows that the amendments to be made in all three stages will allow the establishment of wind farms to be sped up significantly. If we take an example from marine areas, if a wind farm is developed offshore under a superficies licence already in process, it will be possible to take the wind farm into use within approximately four years as of the beginning of development instead of the earlier ten years,” Klaas confirmed.

She also described the amendments concerning planning and the strategic environmental impact assessment. For example, as a result of the amendments made to the Planning Act, it will be possible to shorten the preparation of a plan of a wind farm by two to three years. According to Klaas, there is also a legal possibility to establish joint authorisations. “Then it would not be necessary to undergo three various stages which is very time-consuming.” At the same time, the establishment of new power plants can be sped up by developing the register of buildings, drawing up better guidance materials and a processing handbook, and by training the staff.

During the debate, Taavi Aas (Centre Party), Heiki Hepner (Isamaa), Timo Suslov (Reform Party), Riho Breivel (Estonian Conservative People’s Party), Peeter Ernits (Estonian Conservative People’s Party), Tarmo Kruusimäe (Isamaa) and Jürgen Ligi (Reform Party) took the floor.

Photos of the sitting (Author: Erik Peinar, Chancellery of the Riigikogu)

Verbatim record of the sitting (in Estonian)

The video recording of the sitting will be available to watch later on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)

Riigikogu Press Service
Maris Meiessaar
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