Ukraine war causes spike in Estonia's oil shale needs
The difficult geopolitical situation caused by the war in Ukraine has hiked the price of oil shale energy for Estonia. The need for oil shale is so great that Eesti Energia cannot mine enough of it and is forced to buy more.
Increased demand for oil shale follows Estonia's decision to start offering customers fixed prices as the universal service, as well as growing power consumption in Estonia and the neighboring countries.
Eesti Energia subsidiary Enefit Power has enough oil shale reserves to meet the company's needs in its Narva Quarry and Estonia Mine. However, Eesti Energia is forced to buy additional oil shale from the Ubja and Kiviõli quarries as lower demand for oil shale caused the west wing of its Estonia mine to be shut down some years ago. The company does not have enough machinery with which to mine enough oil shale to meet rising demand. The amount of oil shale Eesti Energia is forced to buy should fall by the end of next year when new machinery is scheduled to arrive.
"We cannot produce enough oil shale with a heating value of 8.4 megajoules in the Estonia Mine today. If last year, we generated 2.4 terawatts of power in the first ten months of the year, we have produced 4 terawatts in the same time this year," CEO of Enefit Power Andres Vainola said.
One of Eesti Energia's extra sources of oil shale is the Kiviõli Keemiatööstus' mine that lies 70 kilometers from the Narva Power Plants. The last time the national energy company bought large quantities of the fuel from there was five years ago.
"The shift in the market has been quite abrupt in the last year. If in previous years, we found that oil shale was no longer as necessary and used it primarily for our own purposes and sold very little of it, demand has spiked in the wake of the Ukraine war. We consumer and sell everything we manage to mine and are working at capacity," said Kaidi Sulp, head of production at the Kiviõli quarry.
The quarry has hired a few dozen new employees this year and is looking for more.
Enefit Power plans to source over half a million tons of oil shale from outside its own mining zones in 2022. The company plans to use 10.4 million tons of oil shale for power and oil production this year to suggest the fuel it buys in counts for under 5 percent of its needs.
There is also traffic in the opposite direction, as Enefit Power is set to sell the Kiviõli Keemiatööstus 200,000 tons of enriched oil shale suitable for shale oil production this year.
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Editor: Marcus Turovski