Eesti Energia redundancies may be fewer than projected

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Oil shale extraction (picture is illustrative).
Oil shale extraction (picture is illustrative). Source: Postimees/Scanpix

Around 350 redundancies is the maximum expected in northeastern Estonia's mining and energy sector in the near future, less than forecast earlier, though following a wave of retirements and redundancies over the summer. At the same time, government ministers have stressed the importance of maintaining Estonia's energy independence, and a desire to protect jobs as far as possible.

The revised figure may even be reduced further, according to Trade Union Confederation (EAKL) chair Peep Peterson, BNS reports.

Representatives of various energy trade unions met on Wednesday with finance minister Martin Helme (EKRE) and economic affairs and communications minister Taavi Aas (Centre), together with management of state-owned energy group Eesti Energia, discussing ways to mitigate the impact of the current oil shale crisis on energy sector workers.

Energy trade unions had been planning to picket the joint ministry building in Tallinn on Aug. 28, according to regional paper Põhjarannik.

Oil shale has been in the spotlight recently, with President Kersti Kaljulaid saying in June that its use in generating electricity was at an end. Critics often cite environmental factors, but at the same time, state-owned energy giant Eesti Energia has revealed plans to locate a new oil shale pre-refinery either at Sillamäe or nearby Auvere, both in Ida-Viru County. Oil shale has other industrial applications, including the chemicals industry.

EAKL says solutions exist to mitigate job losses

"We received confirmation that two generating units will be assigned to reserve; also retained will be the capability in terms of personnel to generate the average amount generated in the past year, totalling 1,050 megawatts," Peterson told BNS.

"In addition, permitting the use of biomass in boilers is under way, and as a result of the combined effect of these considerations, the upper limit of those to be made redundant has dropped to 350 at present," Peterson continued.

"Attempts will be made to engage in further cooperation before September to make that number smaller if possible," he added.

Eesti Energia has previously said that in the first half of this year 315 people had already been made redundant due to closure of oil shale fueled generating units, with the precise number of workers to be laid off will become clearer at the end of August, after the state-owned company has prepared revised production plans.

Peterson said the protest actions slated for the same time are being organized by the Narva energy workers' trade union, which will work through the new information received on Wednesday with its members and then decide how to move forward, i.e. whether the actions will be held in a different way or even called off altogether.

Peterson pointed out that the EAKL has no say in the matter, but that if energy unions decide to stage actions then his organization will support them.

EAKL leader additional comment

Peep Peterson also gave the following comment to ERR News on Friday:

As the power plants were at a standstill for a couple of months, with no clarity on what was going to happen, we expected a full halt to oil shale energy production. Since Eesti Energia has its new prognosis now and more plants are back at work as well, the threat concerning 1,000 workers a month ago has changed, since the government took two decisions:

First, allowing the use of 50 percent biomass, which reduces CO2 emissions and gives better prices for the produced energy, and second, the government, as owner of Eesti Energia, has ordered maintaining security reserves for energy production at the level of the average sold during last year.

As almost 250 retired persons left the company at the beginning of the summer, and 100 were made redundant, the maximum number of the new, reduced lay-offs is capped at 350. During the coming weeks, Eesti Energia and the trade unions are specifying the production plan, so there is hope of saving even more work places.

Helme and Aas view

The finance and economic affairs ministers noted at Wednesday's meeting the importance of the state preserving energy independence and an average generating capacity reserve, meaning that closing down a large portion Eesti Energia's generating capacity due to temporary market difficulties is not viable.

Martin Helme informed the meeting about the expectation that Eesti Energia should ensure Estonia's average energy production capacity, which would result in the greater part of jobs in the oil shale industry being preserved, he said.

"We have to keep in mind that as a result of major changes related to the exit from fossil fuel energy, several large-scale power outages have taken place in Europe of late. We must not permit a situation like that in Estonia," Helme noted, according to BNS.

"Estonia's average electricity demand must be ensured at the Narva power plants until 2023; for security reasons it's important for the state to ensure production capacity during times of peak consumption as well. Therefore also the numbers of redundancies at Eesti Energia will be significantly smaller than feared," the minister added.

Helme said plans are in place to retain two older boilers in addition to that at Auvere, plus two reconstructed generating units. This will bring down the number of layoffs to a maximum of 350, he said.

Eesti Energia is set to roll out a more detailed plan concerning redundancies in September.

Taavi Aas said that Estonia cannot allow its energy independence to be in jeopardy.

"Therefore it is certainly necessary for the Narva electric power stations to be preserved on a certain scale in the future,"  Aas said.

"At the same time, the development of energy globally is increasingly influenced by the environment, and we also have to take this into account. It is, however, of utmost importance to maintain a balance between labor market, the economy and the environment, and the transition from oil shale energy to renewable energy must not affect the development of Ida-Viru county," Aas added.

"We initiated a legislative amendment that allows the production of renewable energy at the Narva power plants and will keep stable the price of remote heating for the city of Narva," Aas said.

"As a result of the use of biomass of little value at the Narva plants, we will keep Estonia's nature clean and preserve jobs in Ida-Viru county. In addition, we will help the oil shale sector speed up the transition from the production of electricity to the production of oil by means of the establishment of a refinery," Aas continued.


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Editor: Andrew Whyte

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