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Vaks: Electricity prices will fall with as many wind turbines as possible

Rein Vaks.
Rein Vaks. Source: ERR

The key to making the price of electricity more affordable is to have as many wind farms as possible in Estonian municipalities, said Rein Vaks, head of the Estonian Ministry of Climate's energy department on ETV show "Esimene stuudio."

Vaks said that Estonia's current energy policy is working, as demonstrated by the fact that the country ranks fifth in the European Union when it comes to the development of renewable energy. The next step, according to Vaks, is to build more wind farms, as this should bring electricity prices down.

"More wind turbines on land, as many wind turbines as possible in each municipality. That's where we'll eventually get the price of electricity down," he said.

Estonia's current target is to cover 100 percent of its electricity consumption with wind energy by 2030. According to Vaks, this is an ambitious aim, although critics believe Estonia should think even bigger and take into account the fact that electricity consumption is growing.

"Estonia's ambition is quite high among EU member states. What's more, our potential is considerable. It is just a question of when we start to realize this potential and who should benefit from it," Vaks said.

"I dare say that we should not produce more renewable energy than we consume, purely because this renewable energy production usually comes out of somebody's pocket. Somebody has to pay for it. I think Estonian consumers are not at all happy with having to pay for the renewable electricity that we produce in Estonia but which is consumed in Poland, Latvia or Lithuania," Vaks added.

"It does not seem logical. This means, in turn, that we need more consumption, new industries and, also new jobs. Both of these things have to be dealt with at the same time, and the Ministry of Climate and Ministry of Economic Affairs and Communications are working on it together," said Vaks.

Prices on the Nord Pool electricity exchange recently rose to almost €2 per kWh. According to Vaks, the exchange works and reacts to those prices.

"I don't think it's worth overemphasizing those few hours in a year where the price of electricity is higher than we are used to. The market reacts to that and in fact, these wrinkles are already smoothed out in the market in the short term. Last summer was one such example - there were a lot of hours when the electricity price was zero, close to zero or even negative, and this is all thanks to the fact that we have had additional new renewable energy coming on to the market," Vaks explained.

"This is also what the Ministry of Climate is working hard on today, to ensure that we have so much renewable energy in the grid that we are accustomed to these summer prices in the fall and possibly also in the winter."

Regarding the capacity to be managed, Vaks said Estonia ought to go ahead with its gas-fired power plants.

"The truth is, that even if we meet our 2030 target of producing all our consumption via renewable sources, we will still have a third of the hours in the year when the wind does not blow or the sun does not shine," Vaks said.

"In that case, we need power plants that do not depend on whether it is hot, cold, windy or sunny outside. We have these types of plants in Estonia. /.../ These will prove difficult in the near future - they are no longer competitive and are unlikely to be able to perform their tasks as well in the near future. This is the information we have from Elering's security of supply report," Vaks said.

"The only logical way forward is with gas-fired power plants, and at the moment, we can actually already see that investment decisions for gas-fired power plants have come from the market. Eesti Energia is a really good example whereby they are considering the current situation and want to bring a gas-fired and a hydrogen power plant to the market. There is also a tender coming up in 2025 for Elering's frequency reserves, where 300-400 megawatts are being looked at. And that's the way these controllable capacities will come to us, we can't manage otherwise," he added.

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Editor: Michael Cole

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