Estonia has set a goal to establish an open market situation on all the different energy sectors, so that the achieved price is the result of competition between different suppliers. For this to work, we have to develop energy infrastructure, which reaches beyond our borders.
Marine cables between Estonia and Finland, Estlink I and Estlink II, are already finished, we are currently working on an additional electricity connection between Estonia and Latvia. On the gas market, the priority is to completely develop the regional gas market and to enable the participants of the local market to access the regional gas infrastructure on equal conditions. It is also important to expand Baltic gas market to the north (Balticconnector) as well as to the south (Lithuanian-Polish gas pipeline).
However, Estonia is among the European Union countries that are least dependent on energy imports. Thanks to the use of oil shale and increasingly also renewable fuels, we can largely meet the energy requirements of our country.
- Energy sector research »
Overview of the developments
Different areas of the energy sector of the Republic of Estonia are managed and regulated by the Energy Department of the Ministry.
The goal for the coming years includes connecting the gas market of the Baltic states and Finland to the Central European gas markets and to establish a liquefied natural gas terminal for the intake of gas.
Further information »
Estonia’s 2020 targets for the energy sector
Estonia and the other European Union member states have established the goal of improving the environmental performance of energy production and diversifying the energy portfolio.
For that purpose, the following objectives are to be achieved by 2020 that were set in “National Development Plan of the Energy Sector until 2020” endorsed by Riigikogu on 15th June 2009 and reiterated in a newer “National Development Plan of the Energy Sector until 2030” approved by the Government of the Republic on 20th October 2017:
- Bringing the share of energy from renewable sources up to 25 per cent of final consumption rates.
- Achieving the 10 per cent proportion of energy from renewable sources in the transport sector final consumption rates.
- Not to exceed the level of 2010 in total energy consumption (2,818 ktoes).
- Keeping the emission of greenhouse gases to atmosphere within the limit of 11 per cent, compared to the level of 2005.
What is toe?
Tons of oil equivalent or energy that is equivalent to energy obtained by burning one ton of oil, 1 toe = 41,868 GJ, 1 TWh electricity energy = 0,086 Mtoes
(Mtoe – mega toe or million toes, ktoe – kilo toe or thousand toes).
Estonia’s 2030 targets and development plan for the energy sector
The Government of the Republic approved „National Development Plan of the Energy Sector until 2030“ on 20th October 2017.
The Estonian National Development Plan of the Energy Sector Until is aimed at ensuring availability of the energy supply to the consumers at a reasonable price and effort and at an acceptable environmental condition, while observing the terms and conditions established in the long-term energy and climate policy of the European Union.
The most beneficial economic competitiveness aspects must be ensured for the purposes of the implementation of the National Development Plan of the Energy Sector. For year 2030, the plan sets following targets and tasks:
fuel and electricity markets operate in a free, unsubsidised and open manner;
• electricity generation capacity in Estonia is sufficient when the N-1-1 criterion is satisfied (for generation equipment);
• Estonia’s electricity system is synchronised with the synchronous grid coordinated in EU;
• electricity generated from renewable sources accounts for 50% of domestic final electricity consumption and new generation equipment for renewable electricity is built under the conditions of an open electricity market without additional domestic subsidies;
• the share of the largest supply source in Estonia’s gas market does not exceed 70%;
• the share of the largest gas seller in Estonia’s gas market does not exceed 32%;
- market concentration in the gas market has decreased significantly and the level of gas market concentration according to Herfindahl-Hirschman Index (HHI) is lower than 2,000 points;
• district heating systems have been preserved in areas where they are sustainable and capable of providing consumers with reasonably priced energy solutions in line with environmental requirements;
• 80% of heat generated in Estonia is generated from renewable sources; the importance of local energy sources for heat generation is increased through the use of peat. The target will be met mainly through market mechanisms;
• the System Average Interruption Duration Index (SAIDI) in the distribution grid does not exceed 90 minutes per consumption point and this level is achieved without additional burden on consumer tariffs;
• renovation efforts have improved the energy efficiency of buildings (40% of small residential buildings have energy efficiency class C or D, 50% of apartment buildings have class C, 20% of non-residential buildings have class C);
• new buildings have an energy performance indicator, which conforms to the requirement for nearly zero-energy buildings;
• 37% of the total net area of the buildings used by the central government is located in buildings that satisfy at least the minimum energy efficiency requirements enforced in 2013;
• fuel consumption of vehicles in 2030 does not exceed the level of 2012 (8.3 TWh).
The Estonian National Development Plan of the Energy Sector Until is aimed at ensuring availability of the energy supply to the consumers at a reasonable price and effort and at an acceptable environmental condition, while observing the terms and conditions established in the long-term energy and climate policy of the European Union. The most beneficial economic competitiveness aspects must be ensured for the purposes of the implementation of the National Development Plan of the Energy Sector. For year 2030, the plan sets following targets and tasks:
The Ministry of Economic Affairs and Communications has started the development of a new energy sector development plan, setting the goals until the year 2030.
The Estonian National Development Plan of the Energy Sector Until is aimed at ensuring the energy supply available to the consumers at a reasonable price and effort and at an acceptable environmental condition, while observing the terms and conditions established in the long-term energy and climate policy of the European Union. The most beneficial economic competitiveness aspects must be observed for the purposes of the implementation of the National Development Plan of the Energy Sector.
The new plan also drafts the benchmarks for renewable energy and energy saving operational programmes and the vision for the renovation of buildings. Therefore, the development plan will considerably contribute to the development of Estonia.
The current version of the development plan of the energy sector will remain in force until 2020; however, investments into energy require long-term planning. Although the new development plan will set the trends until 2030, targets are set even until the year 2050.
Estonia has been a member of the International Energy Agency since November 2013.
Being a member of the International Energy Agency will give Estonia access to highly appreciated analyses of energy policies and forecasts made about the sector. It will also allow Estonia to introduce our unique experience of attaching value to oil shale and related know-how among the developers of energy policies.
- International Energy Agency »
Analysis and forecasts of energy policy
Legislation and surveillance
As many energy sector legal acts share a considerable common component, the energy sector regulation act is being drafted.
In various laws that regulate the energy sector, the principles for measuring the quantities, invoicing and communication of information are often the same. Therefore, there is an intention to develop the energy sector regulation act as a horizontal legal act that will deal with overlapping components of different laws as a single components.
The first stage for the development of the energy sector regulation act (to be finished by summer 2014) involves the regulations applicable to the field of energy efficiency.
Surveillance over the market participants is conducted by the Estonian Competition Authority; all the undertakings involved in district heating, electricity and gas transfers and distribution will be required to harmonise their rates with the Authority.
Such a system of surveillance will allow the consumers to be sure that undertakings are not earning unreasonably high profits by abusing their monopoly position in the market. The Authority will also see that the investments made by undertakings to improve the technical condition of networks and to develop energy infrastructure are reasonable and made in due time.