Eesti Energia will discontinue its green energy program - wood-fired electricity production - at Narva Power Plants for the remainder of the year and will focus solely on oil shale.
Subsidy reductions are forcing the plant to reduce its annual output, and the green energy program will resume in 2013.
The company said that a bill being reviewed by the Cabinet has retroactively implemented a 375-gigawatt-hour limit for green energy production, reported uudised.err.ee.
Raine Pajo, a board member of the power company, said the law change, which reduces subsidies for green energy producers, threatened losses in earnings, and therefore the green energy program had to be cut.
"[Wood-fired production] helps significantly reduce the environmental impact of electricity production without endangering the security of the electricity supply," said Pajo.