Kiisa power plant has a total capacity of 250 MW and the sale will help reduce electricity price spikes once it enters the market.

After desynchronisation, Estonia is required to maintain a stable frequency in its electricity system. To achieve this, the frequency reserve market was launched in February.

In 2028, the European Union's derogation allowing Estonia to include the Kiisa station in the frequency reserve will expire. As a result, it will no longer need to be purchased from the market, leading to lower costs for consumers.

The government backed the proposal put forward by Minister Sutt to sell the Kiisa station in 2028, which will allow for consumer benefits until then.

According to the minister, the sale of the station is a natural step.

"Elering's core responsibilities do not include operating the power plant," Sutt said, adding that under market conditions, the plant would benefit consumers by reducing electricity price peaks on the exchange.

"Selling the Kiisa plant immediately would harm consumers, as the station currently covers our frequency reserve, meaning consumers do not have to pay for it. If we sell the station, we estimate it could help lower the final price of electricity to €3.5/MWh. While this may not be a significant amount, it is still a reduction," he said in a statement.

The Kiisa emergency reserve power plant was completed in 2014 to ensure security of supply in Estonia and avoid dependence on foreign reserve capacity.

The station is owned by Elering and does not participate in the electricity market; it is intended as a backup source for critical situations.

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