Speaking to Vikerraadio's "Uudis +" show in an interview which follows, Ligi noted that Eesti Energia is a crucial producer of an essential service for society, while breaking it up would not increase confidence in Estonia's energy supply despite current soaring prices.

The government discussed increasing Eesti Energia's share capital by €100 million to build a Narva gas power plant at its energy talks yesterday. To clarify, did the government approve this capital increase, and will it now be implemented as a general meeting decision?

There has been no final decision on this yet. We still need to carry out profitability assessments and determine whether it is viable from a budgetary policy perspective. That means assessing whether it is a cost or an investment. The profitability calculation will show whether we will profit from it or end up subsidizing it. There are also budgetary rules in place for this.

Is the natural gas-fired plant needed? The gas plant is definitely needed, or at the very least a good idea, to stabilize electricity supply, as we have an extensive renewable energy program. However, it won't come cheap. We need to revisit the calculations to see whether it can actually compete in the market.

So no final decision has been made yet, and yesterday's headlines were premature?

I haven't been closely following the headlines, but it did sound as if something had been definitively decided. We have set a deadline for May.

There is already a line item in the state budget for this investment. In budgetary terms, €100 million has already been allocated to Eesti Energia, under financial transactions.

There is a hint that it will likely go toward the gas plant, though it is stated in conditional terms. So, there's flexibility there. The probability that the Narva gas plant will be built is a high one. An additional argument is that its profitability could be boosted by selling heat to Narva (for instance by using the hot water generated by the power station for Narva's district heating - ed.). After all, the process will generate heat.

The issue was brought to the government by your predecessor as minister, Mart Võrklaev. Given the ongoing energy crisis, why has this decision been delayed for over a year? What has Estonia gained, at least in terms of supply security, from not making this decision in December 2023?

I don't think it was necessary to delay it. But even if we act now, the plant won't be ready until 2028. We could've had it ready sooner. The budgetary and environmental concerns haven't gone anywhere.

I have looked into the background — I wasn't in office at that time — and there doesn't seem to be a reasonable explanation for the delay. I believe it was political obstruction, which I won't go into further.

We had to make these decisions anyway. The alternative, relying on reserve capacity, is environmentally harmful and more expensive. The government's 2019 decision to keep shale oil plants in reserve was a necessary short-term solution, but starting those plants is extremely costly and results in expensive electricity.

Transitioning to cleaner reserve capacity — like natural gas — was already necessary back then.

The Climate Act draft and the Energy Sector Development Plan 2025 propose that new gas plants must switch to hydrogen or biomethane by 2040. Is this realistic? And does this mean the new gas plant would need to shut down or be sold off in 2040?

There is no need to answer that now. We'll have our calculations, including budgetary considerations, done by May.

Biogas isn't going anywhere; we're still hoping for it. However, the volume isn't sufficient, so the concern is valid. But that doesn't stop us. If biogas isn't available, we'll use fossil gas for as long as we have it.

There are problems with fossil-derived gas — not only environmental but geopolitical as well. Europe doesn't want to depend on despotic regimes after all.

And U.S. gas supplies aren't as endless or cheap as some claim. The world's gas reserves aren't controlled by democracies.

Elering recently announced a 500 MW frequency reserve tender, expecting new power plants to participate in the electricity market. If Eesti Energia builds a 100 MW gas plant in Narva, would that be additional to the 500 MW tender or part of it?

Both options are viable, so far as I can understand. But this is not quite the same as the Kiisa reserve plant, which doesn't participate in daily market offers, though there are no legal obstacles preventing it.

The idea is that a gas plant can start up quickly, unlike shale plants, and provide cleaner, faster electricity.

Private company Utilitas has criticized the state's plan to increase Eesti Energia's capital, saying it distorts competition. Priit Koit, Utilitas CEO, argued that private companies can't get "free" capital and so must borrow at interest. What is your response?

That criticism is a bit premature. The state doesn't get free money either; it collects it from people or takes loans with interest.

I understand his frustration, but let's face it, Utilitas hasn't built a gas plant either. I think they're a great company with some exciting energy projects, but the state has to ensure the gaps are filled where the private sector hasn't delivered. The situation is that they haven't done that. We won't get certainty until May.

The 2023 coalition agreement between the Reform Party, Eesti 200, and SDE calls for splitting Eesti Energia by hiving off oil shale mining into a new company and completing Elektrilevi's separation. Will you be carrying out this plan, or is it off the table since Kaja Kallas stepped down as prime minister?

Let's just say I'm fortunate to be operating in politics while largely ignoring that coalition agreement. It's a source of ideas for different ministers, but it's not on my agenda (Ligi became minister in July last year - ed.).

Energy security is about ensuring reliable supply. Eesti Energia's breakup would not contribute to that end. The company is essential for producing goods we need. Despite the misconceptions, Eesti Energia isn't a "superpower." It faces significant financial challenges. Breaking it up won't boost energy security.

Eesti Energia still operates under the outdated owner expectations document created during Keit Pentus-Rosimannus' tenure [as finance minister]. When will you issue an updated version?

It's in my calendar for January. But we need to address major issues first, before finalizing new expectations.

The key concern is ensuring energy security of supply and making necessary investments, which is becoming increasingly challenging in the current environment.

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