TALLINN - Eesti Energia (Estonian Energy) and the Russian monopolistic power company RAO Unified Energy Systems might build a massive natural gas station in the Russian town of Pskov across the border from Estonia.
The facility, which would be joint owned, would cost more than 6 billion kroons (383.4 million euros) to build, the daily Eesti Paevaleht reported.
Unified Energy Systems made an initial proposal to Eesti Energia four years ago, but the plan was abandoned. Reportedly, however, the Russian company intends to raise the question again, and Estonian Energy is waiting for a concrete offer.
Lembit Vali, member of Eesti Energia's board, said the plan is to generate electricity from natural gas, which is considerably cheaper in Russia than in Estonia. The power station would be built for both companies' funds but it would start selling electricity to Estonia.
"This way we wouldn't have to invest so much in power generation ourselves," Vali said. The only question about the Pskov investment is the instability of the Russian business environment.
"The Russians are interested in adding value to their fuel, selling to the maximum both natural gas and electricity, and for this they would build a power station with our help," Vali explained. According to his data, the Russian side has launched a similar project in cooperation with Bulgaria.
Eesti Energia and Unified Energy Systems could expand an existing power plant in Pskov that supplies electricity to the city.
Power sufficiency has become an obsession in Estonia, where officials forecast a deficit in the near future unless alternative projects are brought online. Estonia has even spoke in favor of a new nuclear power plant for Lithuania as a source of future gigawatts.
The capacity of the proposed facility would, in Vali's words, amount to 400 MV, which is comparable to that of two renovated power blocks at the Narva power plants in northeastern Estonia, or roughly one-eighth of Estonia's aggregate generating capacity.
In future when the environmental tax rises it might no longer make economic sense to use oil shale, upon which power production is now based, Vali said. "Further investments in Narva are risky. At the same time power generation needs to be modernized because as things stand only one-fifth of present production facilities would meet requirements in 2016," he said.
