The National Audit Office of Estonia has delivered a critical assessment of the country's energy policy, warning of potential security issues in the electricity supply by 2027. The report identifies deficiencies in managed generation capacity, external interconnections, and the underutilization of renewable electricity potential. It emphasizes the delayed decision-making on fundamental aspects of energy sector development, including generation capacity management, wind farm construction, and electricity grid development.
Auditor General Janar Holm acknowledges the challenges of decision-making in a complex environment but stresses the importance of taking necessary actions, stating, "The worst decision would be to make no decision." The report indicates that the proposed measures in the upcoming energy sector development plan lack specificity regarding implementation and funding sources.
Estonia has set a goal to produce as much renewable electricity as the country consumes annually by 2030. However, the report criticizes the absence of an action plan to achieve this target, with the Ministry of Climate showing no intention to create one. Additionally, Estonia's potential for renewable electricity production has not been fully realized, with no major wind farms added to the grid in the last decade.
The National Audit Office points out that if renewable energy is added post-2030 as planned, Estonia may have sufficient electricity generation capacity but could lack the dispatchable generation capacity required to maintain grid frequency. It also highlights the lack of prospects for additional dispatchable generation capacity entering the market in the next 14 years due to uncertainties among market players.
The report underscores the unlikelihood of private investors setting up managed generation capacity in Estonia without state support, given the lack of return on investments, particularly when renewable electricity production is low. The need for a decision by the state to promote the market for storage capacity and its purposes is emphasized, along with the absence of potential solutions to efficiently manage electricity consumption in Estonia.
The report concludes by drawing attention to analyses from the previous year, indicating a potential security of electricity supply problem in 2027. This risk scenario is based on the economic unsustainability of old oil shale-fueled generation capacity, which might lead to its shutdown. Auditor General Janar Holm emphasizes that while the issue is not a permanent power shortage in 2027, resolving how peak demand will be covered requires establishing reserve capacity. The government and the climate ministry are actively working to find a solution, with four years remaining to address these challenges.
