Eesti Energia says will not start burning wood to receive subsidy

  • 2021-10-04
  • BNS/TBT Staff

TALLINN - The Estonian state-owned power generating group Eesti Energia said that the bill passed last week amending the Electricity Market Act will not enable the group to start collecting state support for burning wood chips; according to the group, the amendments will not boost logging in Estonia, either, because the size of the subsidy is not motivating enough for forest owners. 

"Several announcements that are not true have unfortunately been published in the media already. Firstly, this bill does not say that Eesti Energia can also start burning wood chips and collecting support for doing so," spokesman for Eesti Energia Priit Luts told BNS.

"[This bill] cannot say that because wood waste has been used for years in Narva power plants' newer blocks and [Eesti Energia] has been the only one to do so under market conditions without receiving any support," he said.

Luts added that he also definitely cannot agree with the claim according to which logging will increase in Estonia as a result of the amendments. The bill reads that the maximum support to be made available for existing production devices through procurement is 10 euros per one megawatt-hour of electricity.

"With this support, it is not possible to motivate forest owners to increase logging. The market prices of high-quality wood material are much higher," he said, adding that the the subsidy only enables to acquire wood waste, which is generated during the processing of wood material of higher quality.

"In any case, it will not be Eesti Energia determining the price of wood fuel in the Estonian market. The price is dictated by foreign demand, which is stimulated by support paid by foreign states, the sizes of which are ten times larger than the subsidy to be paid for existing devices in Estonia under the approved bill," he said.

"As to the wood consumed by Eesti Energia, we've been importing large amounts of wood waste by sea from Central Europe for several years. This material that has no secondary use and its only useful application is energy production. The volume of this import accounts to close to half of the wood we consume," Luts added.

Pursuant to the bill, the maximum support is 10 euros per megawatt-hour and together with the price of electricity, the sum received must not exceed 60 euros.

"The bill's explanatory memorandum mentions 500 gigawatt-hours per year as the volume of renewable electricity generated with the help of the support. Thus, the maximum volume of support can total up to five million euros -- theoretically," the Eesti Energia spokesman said.

"Electricity prices are much higher than 60 euros per megawatt-hour right now and they have been estimated to remain at the same level at least until spring next year. Thus, no existing producer will start receiving support under this amendment for the time being," he added.

The Estonian parliament passed at third reading on Sept. 29 amendments to the Electricity Market Act, the purpose of which is to increase competition in renewable electricity procurements.

Social Democratic Party MP and member of the environment committee of the parliament Jevgeni Ossinovski has turned to President Kersti Kaljulaid with a request to not promulgate the law, which Ossinovski deems to be incompatible with the Constitution for several reasons.

Environmental activists have likewise criticized the amendments to the Electricity Market Act, underscoring that forests are not a sustainable renewable energy source.