The discussions come in the wake of damage to the Estlink 2 undersea cable linking Estonia and Finland. The cable will be offline for several months following a suspected act of deliberate sabotage by a vessel from Russia's "shadow fleet."

Prime Minister Kristen Michal (Reform) said Thursday the cabinet is to discuss options to mitigate energy prices at a meeting on the same day.

Michal acknowledged that the disruption of Estlink 2 will affect the energy balance between Estonia and Finland.

He said: "For us, the disruption of this connection means that when energy is cheaper in Finland, we cannot consume it."

This worked the other way round too, he said.

"Plus, when the need is greater in Finland, which happens more often in winter, especially during colder weather, they cannot consume cheaper energy from our side," Michal explained.

The prime minister said that according to an estimate from state-owned electricity generator Eesti Energia, the price impact of the Estlink 2 outage will be about 1.4 cents per kWh.

"This could temporarily create price fluctuations," Michal added.

The head of government also explained that the agenda will incorporate discussing a €100 million investment into building a natural gas-fueled power plant for Eesti Energia in Narva, bringing the Kiisa gas plant to market, and compensating renewable energy fees for businesses.

Michal said that the government is to continue discussions on making Estonia's economy and businesses more competitive.

"During this afternoon's cabinet session, we will continue this discussion on what we can do to render Estonia's economy and businesses more competitive," he said.

He added that the plan presented by the Minister of Economic Affairs and Communications, Erkki Keldo (Reform), includes an option for industries in Estonia which meet certain efficiency standards to be largely exempt from renewable energy fees.

"We will begin discussions on this aspect," Michal said.

Interior Minister Lauri Läänemets (SDE) meanwhile said the government is going to discuss ways to simultaneously support Estonian residents and businesses, while also considering how energy prices might influence food prices, which themselves have been soaring in recent years.

"Food prices are high, and this is a concern for many," Läänemets said.

Läänemets added that food security concerns cannot be left solely to market forces, while the government must ensure food security for all.

"Unfortunately, we cannot leave this solely to the market; the government must look at how to guarantee food security of supply," Läänemets said.

Läänemets confirmed that his party is to propose temporarily lowering network fees this week but stressed that the solution could involve network fees, renewable energy fees, or another approach.

"Whether it ends up being network fees, renewable energy fees, or some other solution isn't the most important thing. The most important thing is that we find a solution," he said.

Minister of Education and Research Kristina Kallas (Eesti 200) commented on a statement made by Eesti Energia's director of energy trading and portfolio management, Armen Kasparov, about raising fixed electricity package prices – which she felt was misguided.

She said: "This was probably not a well-considered statement because, to review existing fixed-price packages, mutual consent is required."

"To reassure the public, it must be repeated that no one can unilaterally change existing fixed-price packages," Kallas went on.

Climate Minister Yoko Alender (Reform) said that Elering and its Finnish partner are analyzing options for deepening the seabed around Estlink cables or providing additional physical protection against hybrid attacks.

"Additionally, while Baltic and Polish grid operators, we have developed an investment program worth €600 million to strengthen critical infrastructure protection, including cybersecurity. We are seeking co-funding from EU resources this year," Alender said.

Alender also mentioned that the climate ministry has submitted a proposal for tenders for onshore wind farms this year and next year, aiming for an additional capacity of 1,350 MW.

She said: "This would provide us with an additional capacity of 1,350 MW and, in the longer term, also allow for the addition of offshore wind farms. This discussion awaits us at the next economic cabinet meeting."

Michal commented on the possibility of abandoning the emissions trading system (ETS), stating that this option was available until 2019, but the Center-EKRE-Isamaa administration at that time opted not to pursue that.

"This would have been viable until 2019, when we could have used various CO2 units for free for energy sector investments, but the government at the time opted not to do so," the prime minister said.

Michal added that decisions made at that time cannot be picked up again.

"Nowadays, we cannot reopen this debate. The decisions made at that time cannot be revisited," Michal added.

Half of the cost of strengthening the electricity grid will be covered by network fees, it was announced.

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