Competition Authority: Electricity market heavily import-dependent

Electricity sub-station in Estonia.
Electricity sub-station in Estonia. Source: ERR

Estonia is transitioning away from being a net exporter of electricity to a net importer, particularly at peak times, the Competition Authority (Konkurentsiamet) says. This is further weakening the grid system, and also causes concern for the long-term as, while grid synchronization with the EU by 2025 will reduce dependency of electricity of Russian and Belarusian origin, a lack of new generating capacity making up for this, twinned with the decline of the oil shale industry in eastern Estonia, will make the country import-dependent in any case.

Estonia's security of supply of up to 1,000 MWh is guaranteed by external connections through to 2030, after which inadequacies in the system may become more apparent.

A security of supply review carried out by distributor Elering found that the production stock needed to meet consumer demand will be sufficient through to year-end, even in the case of a severe winter, but after that peak consumption will not be met by domestic production alone.

While the adequacy of the Estonian electricity system through imports in the next decade is still guaranteed, after 2030, there may be gaps in system adequacy, and a strategic reserve may be necessary.

At the same time, little in the way of new generation capacity is entering the market, while cheap electricity imports from Russia, not subject to EU CO2 charges, further undermines the domestic market.

Imported electricity also imposes additional costs on the transmission network, the authority says.

In terms of solutions, the Competition Authority proposes a network usage fee for electricity imported from Russia and other non-EU states, following the example of Finland, until the synchronization is finalized in 2025, as

Estonia has been the main electricity supplier and exporter in the Baltics since the closure of the Ignalina nuclear power plant in Lithuania in 2009.

At the same time, Estonian electricity production is based on emissions-rich oil shale energy under pressure due to EU climate change policies and to be followed by the closure of larger production plants in Ida-Viru County resulting from that, by which time Estonia would be a net importer, rather than exporter.


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Editor: Andrew Whyte

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