'Esimene stuudio' debate discusses potential CO2 quota elimination

Panelists on
Panelists on "Esimene stuudio", Wednesday, October 19 2022. Source: ERR

Wednesday's edition of ETV politics panel discussion show 'Esimene stuudio' saw representatives of the five political parties represented at the Riigikogu discussing energy, including the possible elimination of the CO2 quota component from the final electricity price to consumers, and whether to focus on constructing renewable energy-based power stations over the next decade, or to stick with oil shale-fired plants.

Taking part were Minister for IT and Foreign Trade Kristjan Järvan (Isamaa), leader of the opposition Conservative People's Party of Estonia (EKRE) Martin Helme, opposition MP and former economic affairs minister Taavi Aas (Center), SDE MP Jevgenis Ossinovski and Reform Party MP Kristen Michal.

Järvan, speaking on behalf of the state, criticized a plan presented by Helme which would sell electricity to consumers at a price of three cents per KWh.

Järvan said: "This fairy tale is very easy to pick apart. If we look at the data that Eesti Energia has officially submitted and which has been officially checked by the Competition Authority (Konkurentsiamet), we can see that costs already stand at over three cents; the operating costs here are 1.4 cents - in fact without any environmental fees, and if you consider that the environmental fee for oil shale is included, this comes 0.4 cents. The rest consists of labor costs."

"Yes, this three cents could be done, it's just that it would cost nearly €700 million, which of course would necessitated a tax increase," he added.

Helme responded by saying that it is possible without regulatory costs.

He said: "[State electricity generator] Eesti Energia sold electricity at an average price of 3.4 cents in 2020 and made a profit of €20 million. So if someone comes to tell me that it's not possible, well, the numbers don't lie."

Taavi Aas said that the universal electricity service package introduced by Isamaa has not yet commenced. 

He said: "Many people are hesitant about it. The problem with all this is that it does not bring people certainty. We know the price for October, but does the minister know now what the price of the universal service will be even in November?"

Järvan responded by saying that the November price of universal service will be €154 per MWh. "The Competition Authority did its work very professionally; Eesti Energia wanted to increase its profits, but there is actually no basis for doing that."

Ossinovski said for his part that three-cent electricity was unfortunately not that straightforward, saying: "There are difficult times ahead for the energy market: Volatility, turbulence."

"On the one hand, of course, because of the geopolitical risks, but on the other, due to the fact that over the past decade, we have not made the necessary investments in renewable energy in order to get cheaper electricity today. At this time, energy production in Estonia is without a doubt the most environmentally polluting. As a result, our CO2 component in electricity production is at its largest. Naturally, in the short term, there would be no question that we would be ready to change this CO2 component also, but unfortunately we have no allies in the EU in this context, save for Poland, which has remained in the right place without making the necessary investments," Ossinovski added.

"The question now is, are we here today discussing the nonsense that Helme is talking about, which actually cannot be done without us leaving the EU ... Or will we now accept the decision that we will support consumers in the short term and at the same time we will make the necessary decisions in order to quickly catch up in the coming years regarding offshore and onshore wind farms and ensure normal, environmentally-friendly and cheap, reliable electricity by the end of this decade," he went on.

Kristen Michal said that important steps will be taken in the coming years so that power plants based on renewable energy can be built in Estonia, freeing up areas both offshore and on dry land.

Aas said of his party's electricity plan that: "It won't cost very much at all, because there are a lot of consumers who do not consume more than t half he average for a month. The state could certainly handle this, while it would give people the assurance that the minimum amount of electricity they need is guaranteed to their homes."

Helme said that talk about leaving the EU due to the elimination of the CO2 component was complete nonsense.

"As of today, this regulation has been changed a lot. The European Commission has told everyone to do what you want with CO2 money to help businesses and people in the current energy crisis. Almost all other countries in Europe, save for Estonia and Denmark, use CO2 money to to create compensation mechanisms. To come and say that this is not possible is simply not true. Plus there is no need to leave the EU," Helme said.

Ossinovski responded to Helme by saying:. "Are we opposed to electricity being cheaper? No, we are not against it, but in order for electricity to return to the average level it was in the last decade, it is necessary to make wise long-term decisions today, and not to engage in populism."

Järvan stressed that oil shale, previously out-of-favor in the context of the EU's climate change goals, must remain in Estonia's energy portfolio, and since by 2030 Estonia will lose capacity due to the depreciation of power station units, he proposed the construction of a new oil shale power plant at Auvere,  to be done by renovating older energy blocks. "This is the fastest way for us to generate new manageable power here. Green energy cannot be utilized without controllable power," said Järvan.

Ossinovski said investing in new oil shale capacities was no the way to go. "The same billion that should probably be invested there will come out of the taxpayer's pocket, just as with the money spent on the construction of the previous Auvere station. If we had invested this money in renewable energy, we would be in a situation today where the price of our electricity is the same as the Finns and the Swedes have."

Michal said that renewable energy power plants could be put up much faster. "I don't believe that wind farms and green power should take a decade. My assertion is that with faster action it will take two, three or four years."

Of the five panelists, only Jevgeni Ossinovsi was opposed to constructing a nuclear power plant in Estonia.


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Editor: Andrew Whyte

Source: Esimene stuudio

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