Eesti Energia receives support from state for development of pumped storage

TALLINN – The joint agency of Enterprise Estonia and Kredex has allocated 584,950 euros for state-owned energy group Eesti Energia to prepare for the construction of Estonia's first hydroelectric energy storage facility at the site of the Estonia mine in East-Viru County, which is expected to make a significant contribution to ensuring the flexibility and stability of the country's electricity system in the future.

The pumped-storage hydroelectric power plant (PSH) with a capacity of up to 225 megawatts, due to be completed in 2026, is a large-scale circular economy project, the construction of which takes advantage of limestone rubble and closed mining tunnels created during oil shale mining. The plant will act as a powerful storage unit, helping to ensure energy security and stability of the power network when started up, Eesti Energia said in a press release. 

Veljo Aleksandrov, project director at Eesti Energia, said the development is moving at a good pace: the analysis of the technical solution together with the preliminary assessment of environmental effects will be completed at the beginning of next year, followed by the preliminary design with the necessary studies. According to the plan, preliminary design should be completed by the end of 2023 and the investment decision made in the first half of 2024.

"Ensuring Estonia's energy security and energy independence with our own assets is more important than ever before. In view of the connection to the continental European electricity system planned for 2026 at the latest, it is extremely important that the necessary energy markets and production and storage assets be created in the Baltic states to ensure the security of supply as greenly and cheaply as possible," Aleksandrov said.

He said international interest in Estonia's hydropower storage is great because of the project's unique nature. Over the next year, Eesti Energia will carry out comprehensive and versatile studies with its partners, supported by the applied research program of Enterprise Estonia, which must provide certainty that the solution will work.

Eesti Energia will be ready to enter the market with its PSH plant in 2025-2026 in accordance with Elering's synchronization plans, if the necessary system services markets are created. Pumped-storage hydroelectric power plant will provide solutions to several challenges at the same time, because in addition to ensuring security of supply, it promotes the introduction of renewable energy, helps to achieve waste-free production and reuses industrial areas on the way to a circular economy-based carbon-neutral chemical industry.

The purpose of the applied research program is to support knowledge-intensive product and technology development in Estonian businesses.

"Estonia's economic-strategic goal is production with higher added value. This requires the development of smarter and more expensive products and services, which means conducting applied research. At the same time, the applied research stage is risky, as the investments are large and there is no certainty of the success of the development, so, the state supports ambitious technology projects similar to the ones of Eesti Energia," said Kaupo Reede, program development manager at Enterprise Estonia's applied research program.

The plant of up to 225 megawatts acts as a large-scale storage unit. Its upper reservoir will be built on a waste rock structure, and the closed mine will be used as the lower reservoir. When there is a lack of electricity in the energy system, water is passed from the upper reservoir through pipes to an electric turbine that converts energy from flowing water into electrical energy, after which the water enters the lower reservoir. At times when electricity is cheap, the water is pumped back up for the process to be repeated when needed. The plant will start operating in 2026.

The size and profitability of the investment will be specified with the preliminary design, and the pre-assessment of environmental effects will determine which environmental requirements and conditions must be taken into account during the construction. The investment decision is planned for the beginning of 2024.

The solution being developed by Eesti Energia is unique as the pressure height of the PSH plant, meaning the height between the upper and lower water reservoirs, is increased by reusing waste rock from the enrichment process of rock mass from oil shale mining. The use of a mine as a water reservoir for a hydroelectric power plant also makes the project special.

The concept of the planned pumped-storage hydroelectric power plant can be exported to other countries. The target group includes countries whose land relief is not suitable for a classic pumped storage hydropower plant or the environmental effects of a plant in natural conditions are too great, and where there mines already closed or about to close.