Enefit Power wishes to substitute shale oil for Russian gas at Narva plant
Decoupling from Russian natural gas, along with the high price of gas, has caused problems for one power station in the eastern border town of Narva, whose only viable alternative is to switch to shale oil as a fuel.
The plant in question, block 11 at the Baltic power station, will undergo maintenance work for around a month, from mid-July, in the meantime.
While during such periods natural gas is usually used to power a substitute, the situation with Russian gas is such that alternatives have to be sought – in this case, shale oil.
Andres Vainola, CEO of Enefit Power, which operates the plant, said that: "We received a warning from the system operator today that the availability of pipeline gas might be problematic, while when we observe the price of this gas, it would be more reasonable to offer shale oil to Narva power stations instead of pipeline gas, during summer. This would be less than half the price of natural gas."
Enefit Power, a subsidiary of the state-owned Eesti Energia, will carry out the maintenance work.
Competition Authority (Konkurentsiamet) director general Märt Ots said that the concept of using shale oil at the 11th power unit was admissible from the point of view of economics, but even more so in terms of security of supply.
Ots said: "Many Russian pipeline gas inputs are already as good as closed, and if we look at the situation today, where we have only a single source of [alternative] supply in the region – the Klaipeda LNG terminal – we could already take into consideration that we have gas supply problems and shale oil."
The Baltic power station is a co-generation plant meaning it produces heat – the hot water which is a by-product from generating electricity is then piped into apartment buildings in Narva as heating – as well as the electricity itself.
Another consideration is the environmental one, given Estonia is in the process of moving away from oil shale-fired power stations in accordance with EU climate change regulations.
The plant is technically set-up for the use of shale oil, but requires a permit from the Environmental Board (Keskonnaamet) to do so.
Andres Vainola called this a complex and time-consuming process.
"Maybe the regulators will find faster solutions, but we have to follow the complex permit issued to us today, where shale oil is only a reserve fuel for emergencies," he said.
Due to the lag, the summer low-demand season will be used to take the unit off-line altogether, in order to conduct maintenance.
Meelis Mägi, head of the Environmental Board's climate and ambient air department, said that while the permit application process can be shortened from its usual lead time of around six months, it could not be cut down to just a matter of days.
A project involving both the state and the private sector would see a floating LNG terminal – a ship specially fitted-out for the purpose – moored off the port city of Paldiski and supplying, via the Balticonnector pipeline, Finland, as well as Estonia.
However this is not likely to be up-and-running until autumn at the earliest.
The state has also pledged to keep a reserve of natural gas of 1 TWh on-hand (Estonia's annual natural gas consumption is around 5 TWh).
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Andrew Whyte