Raivo Vare ⟩ It is high time to get serious about building a pumped storage plant

Raivo Vare. Photo: Madis Veltman

• We must now analyze and make decisions about the future, and the cost of those decisions is not sma
• The protection of key energy infrastructure is a value in its own right.
• It is high time to make a decision to build at least one pumped storage hydropower plant.

​Energy is a vital field for the survival of any state and its people. The decisions we make today will not come to fruition for another 10 to 15 years, observer Raivo Vare writes.

Energy is a vital field for the survival of any state and its people. The decisions we make today will not come to fruition for another 10 to 15 years, observer Raivo Vare writes.

Now is the time to analyze and make decisions about the future, and the cost of those decisions is not small, whether for investors or the state. For the state, beyond the economic significance, every major decision in the energy sector also has a security dimension. Unfortunately, the recent public debate about a long-term energy storage project has largely ignored several important (economic) security arguments that absolutely must be taken into account.

Below, I highlight five such arguments.

Firstly, if we rely solely on battery technology for energy storage, we remain dependent on countries that mine rare earth metals and manufacture batteries. Unfortunately, today and for the foreseeable future, a critical part of this market is controlled by autocratic states that are not always friendly to us. A pumped storage plant, such as the one being planned on the Pakri Peninsula, is essentially a power station whose main resource — seawater — will never run out.

Secondly, we in Europe have only recently begun to understand technological dependence as a security issue. Across energy storage technologies as a whole, the level of dependency is very high. However, the technological dependence of a pumped storage plant is much lower because the necessary equipment, especially turbines and related components, can be procured and maintained using manufacturers in democratic countries.

Thirdly, the protection of key energy infrastructure is a value in its own right. The war in Ukraine underscores this, and we would do well to learn from it. A pumped storage facility located up to 750 meters underground would, in kinetic terms, likely be the best-protected energy production site in Estonia.

Fourthly, building a subterranean power station would introduce to Estonia the technology and expertise needed to create similarly protected spaces for storing strategic reserves or for housing data centers, for example. It would also lay the groundwork for future independence in extracting valuable deep-earth minerals, should the need arise and the corresponding decision be made. Our northern neighbors, the Finns, have built underground facilities specifically for storing nuclear fuel. If Estonia were indeed to move ahead with building a new type of nuclear power plant, the knowledge gained from such a project would be invaluable for solving storage issues related to the plant and its fuel.

Fifthly, the lifespan of a pumped storage plant is quite long — up to 100 years. In contrast, batteries used for short-term storage last up to 10 years, with industrial-grade versions reaching a maximum of 15 years. This makes pumped storage clearly more cost-effective in terms of return on investment, depreciation, and maintenance cycles. Moreover, the available production capacity is unmatched: the planned pumped storage plant in Paldiski would offer 500 megawatts of dispatchable capacity. For comparison, Europe's reportedly most powerful battery facility, currently being built in Kiisa, is designed for just 100 megawatts. This translates into a significantly longer ability to cover interruptions in variable electricity production or to provide fast-start peak balancing capacity — both an economic and security matter, especially in comparison to the gas power plants currently being planned.

In conclusion, it is high time to make a decision to build at least one pumped storage plant. All the more so because, beyond the security aspects briefly discussed here, the project also offers broader economic benefits. In Paldiski, preparations have already advanced to the point where a decision must be made on whether and how to move forward.