Shale oil is a cheaper fuel source than the natural gas which Utilitas usually uses and which has seen soaring prices impact on the end price to consumers.

District heating is essentially hot water piped in to many apartment blocks, centrally controlled, to provide heating, as its name suggests.

Despite the switch, the traditional heating period starting October 1 will not be accompanied by cheaper district heating prices, however.

Utilitas in fact draws around two thirds of its heating fuel from wood chips and waste heat.

Utilitas board member Janek Trumsi told AK that: "Since two-thirds of the heat portfolio in Tallinn is waste heat and wood chips, we use reserve capacity when using peak capacities, and it depends primarily on the weather. Gas will not be completely excluded, but it is still a matter of diversifying the portfolio."

As to costs to consumer, Trumsi said: "The fuel market today is very volatile. Every month, all fuels are changing. Rather, we see that the price of fuel remains stable at the moment, how it will change during the heating season, we are not ready to say yet."

As reported by ERR News, Utilitas Tallinn has also applied for authorization by the Environmental Board to switch from natural gas to diesel, for the same purpose, a move which the Ministry of Economic Affairs and Communications considers justifiable.

This is still pending processing.

Many other district heating firms nationwide are also applying for environmental exemptions to use fuels other than natural gas, AK reported, though most of the 10 applications, covering 19 boilers, received since March 1 this year are still pending, Erik Kosenkranius, Deputy Director General of the Environmental Board, said.

He said: "Most of these want to switch to shale oil, somewhere around two-thirds of these changes are related to that fuel and the other, roughtly, one-third relate to other fuels, be it diesel fuel, pellets, wood chips, or even peat."

The exemptions will only apply through heating season, which runs to the end of March next year, and is in response to soaring energy prices.

The Environmental Board is required to ensure that switching to oil shale, diesel and other fuels does not lead to pollution standards being exceeded, for instance in terms of sulphurous emissions, as natural gas is less pollutant than many of the alternative fuels.

While the switch should not lead to unpleasant odors being emitted in and around district heating plants, or in Tallinn as a whole, an "oily smell" may present in certain wind directions and conditions, AK said.

District heating payment support for domestic customers is, along with that for natural gas and electricity, being processed at the Riigikogu.

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