Minister of Finance Martin Helme (EKRE) says that Eesti Energia must not allow the state energy sector to fall apart in a difficult situation as Estonia must be able to supply its own power.
You are set to meet with representatives of energy and mining unions. What will be your message to them?
My message to Eesti Energia and to miners and engineers is that the government will not stand for Estonia not being able to provide the power it needs.
Yes, we find ourselves in a difficult situation due to several circumstances coinciding. Some could be foreseen, while others could not. That said, we should not forget that our energy sector and oil shale energy production have benefited us greatly over the years. Benefited the entire economy and bolstered the state budget. With this in mind, we must not allow our energy sector to fall apart if we have to weather a difficult period for six months or a year.
Rising CO2 quotas have been given as one reason for the current situation. This should not come as a surprise as it was the idea of quota trading to move away from dirty energy, including oil shale. What is your opinion of the system?
I have always been very critical. I believe it is a made-up crisis. At some point, someone somewhere decided that CO2 was the thing that we will measure and tax. If we ask today how that taxation has helped reduce greenhouse gases, the answer is that USA that has not joined the Kyoto and Paris agreements has cut its CO2 emissions, while Europe that has been the poster child for climate policy has increased its footprint. Not to mention third world countries and India, China and Russia.
We now find ourselves in an absurdly embarrassing situation where Estonian energy production is in crisis because of CO2, while we import cheaper Russian electricity that is not subject to CO2 taxation.
We are hypocritical in lying to ourselves in this manner. Considering the goal, this climate policy has utterly failed.
However, that is the situation we are in as these things have been agreed in Europe. We need to see what we can do about it. For example, CO2 is not a problem when producing oil shale oil. Boosting the relative importance of biomass in our furnaces would also require us to buy less quota and lead to cheaper energy.
Solutions exist, but in a situation where Russia is exempt from the quota tax, their dumping is killing our industry. It cannot go on forever.
Keeping workforce in reserve and opening another oil shale oil mill would be the quick solution. Eesti Energia CEO Hando Sutter said that the long-term solution is switching to renewable energy. Do you agree?
Renewable energy has a role to play, but looking at technical possibilities and potential production volumes today, we see that oil shale electricity cannot be replaced with renewable energy in full. Until we have a viable alternative to oil shale – and I will not stand for importing energy – we need to find a way to keep oil shale energy going.
A nuclear power plant has been discussed.
A nuclear plant is definitely one option we should consider without emotion coming into it. We need to look at modern technology that is available and understand that the plants at Chernobyl and Fukushima are previous generation plants. We have new nuclear power plants that cannot explode.
The investment would be colossal. We are talking €10-15 billion at least, and it would be a long road. If we made a decision today, at best we would be ready to produce energy in 2030. That is the longest perspective of them all.
Today, the question is how to keep miners employed. We should have a second oil mill in two-three years. That will solve the sector’s problems in the medium to long run. In the next 15-20 years, we need to answer the question of what to replace oil shale with, provided we want to stop using it, because we need something.
The coalition has said it is not afraid of borrowing if it could be used to finance an investment that will eventually pay off. Could energy be it?
Yes. Clearly. Borrowing to cover running costs is out of the question. A loan could be used to invest in projects that support our prosperity. The energy sector is surely among such. Looking at the past 10-15 years, it has made Estonia a lot of money.
Keeping Eesti Energia employees in reserve would cost €10-15 million a year. Could it be found in Eesti Energia dividends?
That is one option. It is an expense we need to make, whether the tab will be picked up by the taxpayer or the state in reduced dividend.
As the owner’s representative, how satisfied are you with work done by the board of Eesti Energia?
I would say that both the CO2 quotas and allowing cheap Russian energy to flood the market are results of political processes. We cannot say Eesti Energia did nothing to anticipate these developments. Boosting the relative importance of renewable energy and increased oil shale oil production have been part of those preparations, taking the situation into account.