The government on Thursday agreed to amendments to the Electricity Market Act that would allow biomass to be used in greater amounts alongside oil shale in the production of electric energy in Estonia.
Minister of Economic Affairs and Infrastructure Taavi Aas said it makes sense to increasingly substitute oil shale with low-value wood waste to increase the competitiveness of the Narva power plants on the electricity market, preserve jobs in the energy sector and create new jobs in forestry.
"Preservation of the Narva power plants is critical for Estonia's energy security to ensure our energy independence in the future. At the same time, it makes sense to produce more shale oil from oil shale," the Center Party minister said.
Thus far, wood waste has been used for the production of 100 gigawatt-hours of electricity on the average. The amendment would enable to use wood waste potentially for generating additionally 500 gigawatt-hours of electricity.
The resulting increase in renewable energy fees is estimated to total €5 million a year. In 2020, renewable energy fees are estimated to reach over €90 million.
The amendment would increase energy security and the security of supply of electric energy.
Besides, an obligation would be placed on the government to conduct an ex post evaluation of the impacts by January 1, 2025 and if necessary, to make relevant proposals to the Riigikogu.
In addition, the amendment would introduce the possibility to start requiring a deposit from participants in lowest-bid auctions for generating electric energy with equipment with a capacity of more than one megawatt. This, according to the authors of the bill, would create a tool to ensure the fulfillment of the obligation assumed by the renewable energy generating party.
The amendments would step into force pursuant to general procedure, save for the amendments which require a state aid permit from the European Commission. Such provisions are to step into force on the tenth day following the decision by the European Commission.
Editor: Helen Wright