Estonia's European Commissioner Kadri Simson (Center) has said that cheaper electricity prices have resulted from competition and from the European Union's climate policy, which would not be possible if all electricity was domestically generated.
Simson also said that job losses in Ida-Viru County, where the vast majority of the country's oil shale sector is located, could be mitigated in future through diversification.
Talking to regional daily Põhjarannik (link in Estonian), Simson also said that, to the best of her knowledge, there was no electricity trading between Estonia and the Russian Federation, though Estonia can still see cheaper Russian electricity – not subject to EU carbon tax regulations – reaching the country.
"Why this is happening is because there are three pillars in energy policy," she told the daily.
"One is to reduce pollution, the second is to provide sufficient energy security even when all our neighbors require a lot of energy. This is something that the government must take into account – that power plants cannot be shut down without knowing how to cover peak demand," she went on.
"The third is price, which is why we have joined the Nordic market, so that our consumers can obtain a better price. If we were solely operating in the Estonian market, Narva power plants would provide electricity at any cost, meaning our industry and people would pay much higher electricity bills," Simson said.
Asked how the Estonian state should have been better prepared for the sharp rise in carbon prices, to avoid a thousand job losses in Ida-Viru County within a year, Simson, who is a former economic affairs minister, said that: "Diversifying industry is one possibility. There will be other industrial jobs, so they don't have to go to another region or another country to look for work. "
"The new European Commission has also made a promise that we will be installing a cross-border carbon mechanism. This means that if someone wants to sell goods in the future, be it cement, steel or electricity, they will have to pay a border tariff whiich takes into account the carbon footprint and equates it to a quota paid by a European company," she continued.
Editor: Andrew Whyte