Estonian EconMin: Natgas market situation not warranting declaring an emergency

  • 2022-07-20
  • BNS/TBT Staff

TALLINN - In the assessment of the Estonian Ministry of Economic Affairs and Communications, the situation in the natural gas market does not currently warrant declaring an emergency.

In May, the ministry announced an early warning in the gas market and the same has been done in Finland, Latvia and Lithuania. This level is currently sufficient and corresponds to the real situation, according to the ministry.

"In Estonia, the use of renewable resources for the production of heat is among the highest in Europe at around 60 percent, which means that our dependence on gas is among the smallest in Europe," Laura Laaster, head of public relations at the Ministry of Economic Affairs and Communications, told BNS.

In Estonia, some 5 terawatt-hours (TWh) of natural gas is used per year, which accounts for around 7 percent of the country's energy balance and with regard to the coming winter, Estonia's gas consumption is estimated to decrease to 4 terawatt-hours, according to Laaster.

"[Estonian energy company] Eesti Gaas recently announced that it has acquired 3 terawatt-hours' worth of gas and plans to buy some more. Gas stocks at the Latvian repository total 10.6 terawatt-hours and the volume is growing with each passing day. We're also moving forward together with Finland with the construction of LNG terminal infrastructure. Works in both Estonia and Finland are progressing according to schedule and the necessary vessel has also been rented," she said.

Therefore, the situation does not warrant the next level of warning, which is declaring an emergency. Laaster said that the ministry together with electricity and gas transmission system operator (TSO) Elering are monitoring the situation in the natural gas market and the security of supply. Estonia is also in constant communication with the other two Baltic states and Finland and, at present, none of Estonia's neighbors have declared the next level of warning, either.

"If the situation and the gas market outlook demand it, we will definitely do so," she added.

The Association of Estonian Cities and Municipalities recently turned to the ministry, saying that resolving an emergency caused by disruptions in the supply of natural gas is not local governments' responsibility. The association proposed that the ministry make a decision with regard to declaring an emergency in natural gas supply.

"There have recently been statements from the ministry according to which resolving a state of emergency caused by disruptions in gas supply is up to local governments. We find that a situation where district heating may be disrupted due to a state-wide gas shortage cannot be resolved at the local government level. Disruptions in country-wide gas deliveries or the risk thereof are not a local issue," Veikko Luhalaid, managing director of the Association of Estonian Cities and Municipalities, said in a letter to Minister of Justice Maris Lauri acting as minister of economic affairs and infrastructure. 

Laaster said that pursuant to the Emergency Act, district heating as a vital service is managed by local governments.

"District heating companies will need to hold a procurement for fuel for the upcoming winter. If the procurement proves unsuccessful, the enterprise must inform their local government and submit an application to the Environmental Board for switching to reserve fuel. To make the decision, the Environmental Board can request the opinion of the Ministry of Economic Affairs and Communications on this matter. The ministry is of the opinion that where permits enable doing so, switching to more affordable fuels is encouraged already today. In areas where environmental permits need to be changed, contacting the Environmental Board is advised," she noted, adding that declaring a country-wide emergency would not change anything in this process.