Minister: Eesti Energia lay-offs fix lies in both renewables and oil shale

Minister of Public Administration Jaak Aab (Centre).
Minister of Public Administration Jaak Aab (Centre). Source: Siim Lõvi/ERR

In finding solutions to proposed mass lay-offs by state owned electricity firm Eesti Energia, Minister of Public Administration Jaak Aab (Centre) emphasized coexistence between older oil shale burning plants and environmentally friendly renewable sources. Aab noted that the potential conflict was not unexpected, but had been brought into sharper focus recently.

Eesti Energia announced Tuesday that it would be making temporary job cuts through the summer, of up to 1,300 people. This is on top of an earlier announcement in April that 400 Eesti Energia employees would be given temporary redundancy.

The reason given by Eesti Energia was a lack of competitiveness, and therefore reduced capacity at its plants, resulting from large quantities of Russian and Belarusian electricity entering the Nord Pool energy market. These countries are not subject to European Union carbon dioxide emissions duties, which have doubled over the last year.

Not a case of one or the other

Jaak Aab proposed a "both/and", rather than an "either/or" solution, whereby Eesti Energia focuses both on the traditional, oil shale burning generation, and increasing the market share of renewable energy.

Eesti Energia's renewables subsidiary, Enefit Green, acquired private company Nelja Energia last year, and with it turbines at the Paldiski wind farm, as well as other assets.

"The news that increases in the price of carbon dioxide emission credits may result in up to a thousand people becoming jobless in Ida-Viru County is catastrophic for many families," Aab said, according to BNS.

"The situation is more than critical, and actions are needed quickly," he continued, as quoted by finance ministry spokespersons.

Expand existing regional support program

Aab added that the state should increase the scope of an Ida-Viru County program initiated to support the region and create new jobs. The bulk of the, albeit temporary, job losses will be felt in Estonia's easternmost county.

The program aims to boost the region's economic activity via new investment, facilitating job creation at above-average salaries, compared with other industries in the region.

"Preliminary work has been done and measures are in operation, so now it would be necessary to increase the support volumes. There is also a great need for cooperation between ministries to help people via national support," Aab said.

A primary driving force behind the Ida-Viru County program was in any case concern that transitioning to more environmentally friendly energy sources would leave some people in the sector jobless.

"However, due to what is going on on the energy market, this problem arrived sooner than we expected," Aab added.

Aab also noted the overall success of the Ida-Viru County program, and possible future developments.

"We are also supporting the establishment and development of a start-up ecosystem in Ida-Viru County in partnership with KredEx and Startup Estonia. But it is clear that the program's results do not emerge overnight, and developments take time," Aab continued.

The Eesti Energia lay-offs would last for up to a 90 day period within 12 months, during which the minimum wage possible, €540 per month, would be paid.

Around 500 people have reportedly already received redundancy notices; according to some labor unions, the number laid off could ultimately reach around 6,000.

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Editor: Andrew Whyte

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