Fossil fuels ensured favorable prices and supply security of electricity not too long ago. Today, affordable energy comes from renewable sources, while we lack production capacity. To make up for the shortage, we are once again looking at hugely expensive fossil alternatives. A real Catch-22.

Russia's war in Ukraine has also demonstrated that in order to strike a balance between price, the environment and supply security, the green transition needs to be accelerated. Carefully considered power consumption favors smart choices. And vice versa. We need to change our thinking and adopt an open approach.

Premise there for smart services breakthrough

A good energy solution is one the consumer doesn't even notice. How many of you regularly think about remote reading electricity meters that cover almost all of Estonia? Most European countries are lightyears away from the breakthrough. Digital data sent in by the meters lays the groundwork for storage devices, consumption management and a smart grid in the new energy system. They manifest in everyday life through natural and smart choices. The first of these is home solar power.

Investing in solar panels pays off, and Estonia could become an exporter of solar power as early as next summer. Looking at the cost of the average private residence solar park, it is often less than the price of the vehicle in its driveway. And unlike the latter, a solar farm will keep generating positive cash flow for the next 25 years.

The average solar panels payback period is ten years and can be half that for small residences should the market price of electricity remain high. In addition to offering saving, solar panels increase property value and energy efficiency.

Storage boom a matter of time

Rapid technological advancement and sharp electricity price fluctuations have made energy storage solutions the next likely hit. Solar power flooding the market come summer could cause prices to plummet. That would make it wiser to store energy during the day and use it in the evening when the market price is higher. Cheaper night-time electricity can also be stored to be used during the morning price peak. Power usage optimization solutions allow one to manage home electricity generation and consumption to maximize green energy output and customer benefits.

The abundance of storage will eventually have a positive effect on peak consumption periods. Local generation will reduce demand for power from the grid, which means that hugely expensive gas power plants (that otherwise cover peak consumption) will have to be fired up less often.

As with solar panels, storage solutions would require additional national support measures. That said, it is also true that smart green solutions will remain beyond the reach of tens of thousands of people, both due to their initial cost and because buildings erected in the mass construction drives of the 1960s through 90s are not in good enough repair to facilitate their installation. (Estonia's long-term strategy for building renovations provides that in order to reach at minimum the C energy class in the next 30 years, 14,000 apartment buildings will have to be renovated, 22 percent of them by 2030.)

Powerful devices will need to work smart

We need to take care not to invest today's money in yesterday's solutions. An additional layer of insulation and a nicer facade will not bring us closer to smart energy efficiency.

Businesses have realized the latter. New commercial buildings' heating systems use just 20-40 percent of total energy consumed, which has a positive effect on electricity costs. Using modern heating and cooling systems, it is possible to save considerably on energy. For example, older boilers have a maximum efficiency rating of 80 percent, while newer alternatives can hit 95 percent.

Major devices that consume or generate power can be linked to a virtual power plant. This would see a smart system automatically manage workload and help save on expenses. Modern lighting can also be up to 40 percent more efficient and rely on smart programming and management. These constitute simple solutions that can be adopted immediately. More than a few companies are bitterly regretting decisions to postpone energy efficiency investments today.

Offshore wind farms fastest way to carry out green turn

As we've found, the necessary solutions largely exist. A green electricity transition [in Estonia] requires a single offshore wind farm and another 120 terrestrial turbines. Not a lot.

Many projects are already underway: Enefit Green's Purtse hybrid park is under construction, preparations are underway for the Sopi and Tootsi wind power area, with Risti, Põlendma, Siiraku and other wind farms, as well as the Gulf of Livonia offshore farm all in development. Without an offshore farm, it would be necessary to build 300 terrestrial wind turbines, which would be a far more daunting task.

Fully renewables-based power generation could be Estonia's next success story. To pull it off, we need a social contract and for it to manifest in concrete steps: faster permits processing, an income stabilization system to benefit both the state and investors, support in seeking co-financing and grid investments.

Because of these smart and green solutions, 55 percent of the green transition will be handled by consumers. This will be based on wise energy choices and trust in service providers being able to manage smart devices safely and beneficially.

Government can nudge smart solutions breakthrough

Estonia has supported the consumer green transition in various ways throughout the years. Solar farm and electric vehicle grants are the first examples that come to mind. In order to achieve a favorable price and maximal social impact, support for green energy generation or emissions-free driving should sport the additional condition of their use through smart energy management solutions.

In the case of electric cars, we are talking about smart charging that makes it possible to alleviate peak consumption, promote renewable energy consumption and dial back expenses. Green energy generation should promote storage solutions that, coupled with solar panels, can be managed to offset the market.

Estonia is not wealthy enough to make foolish decisions. That is why we cannot postpone renewable energy decisions. Our aim is to cover Estonia's power needs using renewable energy by 2030 to make sure electricity is affordable, green and available.

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