Eesti Energia has not been ordered to extend supply security reserve power

Hando Sutter.
Hando Sutter. Source: Priit Mürk/ERR

Even though Minister of Economic Affairs and Communications Taavi Aas said at the start of March that he is about to take to the government an extension of Eesti Energia's obligation to maintain 1,000 megawatts of power generation capacity in reserve, the company has not been ordered to do so by the Ministry of Finance.

The government is planning to extend the obligation of keeping 1,000 MW of energy production capacity in reserve indefinitely – the current deadline is 2023 – while no such instructions have reached the national energy giant, CEO Hando Sutter told Vikerraadio's "Uudis+" program.

"The owner's expectation is clear, with the document available on the finance ministry's webpage. It has not been changed so far and the reserve power obligation is set to expire in 2023, but deliberations are ongoing" Sutter said.

He said that while EE does not plan to scrap the plants used to ensure reserve power now, the company needs to know its new obligations as soon as possible. Sutter said that older power plants are associated mostly with cost and an agreement is needed with the owner for how to pay for maintaining reserve power.

"Talks are ongoing, and it is in our interests to find a solution this spring," he said.

The Ministry of Finance told ERR that it has sent to the government its proposal to extend the reserve power obligation until at least 2025. The matter is set to be discussed in April.

Sutter said that expenses depend on the level of preparedness the state wants. "Power plant maintenance is like servicing a car that needs to be kept in good working order even if it is not being driven. We need to know what to count on when making plans. We need an agreement, and if we get one in April, that is what we will be going with," the CEO said.

Expenses, including necessary investments, depend on the period for which the reserve obligation is extended. Sutter said that an extension of several years would require repairs worth millions in older plants. "Therefore, we are talking about pretty serious decisions," he said.

Eesti Energia has been in the red maintaining reserve power for years as formerly cheap prices have kept largely uncompetitive oil shale energy off the market and plants idle, Andres Vainola, head of subsidiary Enefit Power, told ERR in March.

Vainola added that if the goal is to continue maintaining reserve power capacity after 2023, a corresponding decision would be needed at least 18 months prior.


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Editor: Marcus Turovski

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