This has served to spark debate over the outage's economic impacts, energy security, and infrastructure risk management, following the damage caused by a trailing anchor from a vessel thought to be part of Russia's shadow fleet.

The malfunction of Estlink 2, a critical interconnection between Estonia and Finland, is expected to raise Estonia's average electricity prices. Energy entrepreneur Sandor Liive emphasized this point, stating:

Speaking to "Aktuaalne kaamera," Liive said: "If I should try to answer the question of whether the outage with Estlink 2 will bring us higher or lower prices in Estonia, my answer is that it will for sure bring us a higher average price. Totally. There's no point in confusing people."

Liive further outlined the disparity, referencing last year's prices by saying: "The average price in the Baltic countries was significantly higher than in the Nordic countries. So there is no rational justification for this being followed by a lower average price for us."

Ministry official: Potentially smaller price gap with Finland

Despite the expected rise in energy prices, Deputy Secretary General at the Ministry of Climate, Jaanus Uiga, suggested that the gulf in prices between Estonia and Finland might not be as wide as during the previous outage of Estlink 2, from early last year through to the autumn.

Speaking to Vikerraadio's "Reporteritund," Uiga said: "The last time, the price differential caused by Estlink 2's failure stood at about €20 per MWh, or two cents per KWh. This time around, the gap might be smaller pending on various factors."

Uiga attributed this potential narrowing of the gap to recent increases in renewable energy capacity. "The gap might be smaller as we have added additional production capacity in the form of renewable energy in the meantime," he said.

Renewable energy as a mitigating factor

Estonia's growing renewable energy capacity is seen as a mitigating factor for the price impact. "Our wind power capacity has almost doubled, while we already have over 1,100 MW of solar panels, with more to come next year," Uiga added.

The official pointed out that when conditions are favorable, renewable sources could continue to lessen the price gap. "During the hours when these plants can operate – when there is wind and sun – the price difference works more in our favor," he said.

However, Uiga cautioned against making too firm predictions, qualifying this by saying: "To pledge before the fact that it will definitely be €20 or €14 or something along those lines is a very thankless task. There are so many assumptions [underlying it]."

Meanwhile, Sandor Liive remained skeptical, expressing doubts about whether renewable energy could fully offset the loss of Estlink 2's 650-megawatt capacity.

"Will all of this compensate for the outage? I don't think so... This means it will cost the Estonian economy," he argued.

Liive cited expert estimates, which suggest an additional €100 million burden on the economy, on top of the €800 million consumers paid for electricity in Estonia last year.

Energy security remains intact

Despite these challenges, both Uiga and Liive reassured the public that Estonia's energy security remains robust.

Uiga elaborated on this. "It is important for people to get this information, that we have a major interconnection cable with Finland out of service... but it is crucial to tell people that this cable fault does not endanger our supply security," he said.

Liive, too, elaborated on the strength of Estonia's interconnection network, which does not solely involve Estonia's northern neighbor, saying: "We essentially have four interconnections – one between Lithuania and Poland, one between Lithuania and Sweden, and two with Finland – one of which is out."

He also applied a certain amount of game theory to his argument. "In energy terms, this is the N-minus-one criterion. As I understand it, Elering applies an N-minus-two criterion, meaning the system must stay operational even if the largest, or two largest, units go offline," Liive went on.

Long-term risks and recommendations

Both interviewees underscored the need for better risk management and timely execution of energy infrastructure projects.

Liive pointed to the intentional burial of Estlink 1 within the seabed as a precaution taken during its construction, back in 2005 when the regional security situation still was not as fraught as it is now – though the risk of accident was around the same.

"Even then, there was heavy traffic of Russian oil tankers, which was seen as a potential risk. Sometimes anchors are forgotten or dropped into the sea," he added.

He contrasted this with the current situation, saying: "While the gas pipeline was damaged by an anchor, as was the fiber-optic cable between Estonia and Finland, Estlink 1 remained intact."

"Most likely, it didn't break because the anchor simply couldn't penetrate that deep into the seabed."

The gas pipeline Liive referred to is the Balticconnector, ruptured by a dragging anchor from a Hong Kong-flagged freighter in October 2023. In the latest incident which damaged the Estlink 2 cable, the ship responsible, the Cook Islands-flagged Eagle S, was redirected to the Finnish coast by that country's authorities ahead of reaching Estlink 1's zone, which lies to the west (see map above).

Liive stressed the urgency of implementing identified solutions going forward. "The implementation and execution of these solutions in Estonia need to be significantly increased. There are always objective reasons, but excuses are also always found," he said.

The damage to the Estlink 2 became apparent on Christmas Day. By current estimates, repairs will take over half a year and losses will amount to over €100 million.

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