Due to falling natural gas and electricity prices and the high price of CO2, oil shale-based electricity production is no longer competitive on the market, meaning that oil shale-fired power plants now have significantly less access to the market and to a great extent lack the capacity to generate revenue from it, Eesti Energia said in a press release.

As international accounting standards require that the value of a company's assets must be assessed in accordance with the market situation, it continued, the Estonian energy group had to write down the value of its oil shale-fired power plants by €628 million.

Group CFO and management board member Marlen Tamm noted that Eesti Energia took major steps forward on its green journey last year, investing €779 million primarily in cleaner energy production, the development of a reliable and modern electricity network as well as the establishment of a sustainable chemical industry. She also highlighted that throughout the year, the group's share of income earned outside of Estonia increased significantly while the share of renewable energy in its electricity production rose to 45 percent.

"Energy is a sector that requires a long-term vision and plan," Tamm said, explaining that the aforementioned areas are those on which Eesti Energia is building its future.

"At the same time, the drastically changed energy market situation in 2023 significantly reduced the competitiveness of our oil shale-based power plants and their ability to generate future revenues," she continued. "This triggered a need to write down these assets for accounting purposes and, despite our strong business result, we ended the year with a normalized net loss of €376 million."

Nearly two-thirds of sales revenue generated abroad

"In the Baltics, Poland and Finland, Enefit offers beneficial energy solutions to more than 600,000 customers," Tamm said, referring to the brand under which Eesti Energia now operates its customer-oriented business across all markets. "Currently, most of our sales revenue – 62 percent – comes from outside of Estonia."

Last year's biggest growth occurred in the Polish market, where the company found new customers and gained market share; in 2023, Poland accounted for 21 percent of the group's total revenue, up from 13 percent on year.

In 2023, Eesti Energia's total revenue decreased by 14 percent to €1.9 billion. This decrease in sales revenue was due mainly to lower electricity market prices as well as business customers' decreased consumption volumes.

Investments up, made largely in renewables

Compared with 2022, the group increased investments by 75 percent, or €334 million, to total a record €779 million for the year.

The largest share of these investments, accounting for €339 million, constituted investments by the group's renewable energy arm Enefit Green in the construction of new wind farms and solar parks. This included, for example, €84 million invested in the construction of the Sopi-Tootsi wind farm.

As of the end of 2023, Enefit Green had under construction six wind farms with a total capacity of 612 megawatts (MW) and four solar parks with a total capacity of 97 megawatts.

Eesti Energia also invested €105 million to develop Ida-Viru County's oil shale industry into a sustainable, circular economy-based chemical industry.

Group distribution network operator (DNO) Elektrilevi, meanwhile, invested €168 million last year – €43 million more than in the previous year – to improve the quality of the network service as well as develop connection opportunities for micro-producers.

Nearly half of total production from renewable sources

In 2023, Eesti Energia produced a total of 3.614 gigawatt-hours (GWh) of electricity, marking a decrease of 42 percent, or by 2.647 gigawatt-hours, on year.

"Although electricity production decreased as a whole, the share of renewable energy increased to 45 percent of the group's total electricity production," Tamm highlighted. She added that the decrease in production and increase in the share of renewable energy was influenced primarily by the more than twofold drop in electricity prices and reduced competitiveness of the group's Enefit Power-operated power plants.

In 2023, Eesti Energia paid a total of €391 million in taxes and environmental charges to the Estonian state. Of this, €99 million consisted of various direct taxes and €292 million of CO2 emission costs at market price.

The energy group's normalized earnings before interest, taxes, depreciation and amortization (EBITDA) for the year, excluding the impact of changes in the value of long-term power purchase agreements, totaled €483 million, marking an increase of 45 percent on year.

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