TALLINN - Eesti Energia (Estonian Energy) announced last week that its strategic goal would be to raise shale oil production to 500,000 tons by 2010 compared with the present level of 130,000 tons.
"Eesti Energia possesses unique know-how in the field of large-scale mining and processing of oil shale to produce electricity and oil. Given the present-day relatively high crude prices, technological developments and political realities of the Middle East, adding value to oil shale through oil production is becoming more and more important alongside electric and thermal power production," the company said in an interim report.
Estonian Energy sold 26,000 tons of shale oil in the first three months of the 2006-7 financial year, earning 106 million kroons (6.7 million euros). Operating profit from this sector reached almost 75 million kroons.
Development of the national grid continued, with work on the strategically important Narva-Tallinn network and construction of the Estlink underwater cable connecting Estonia and Finland progressing.
The company intends to invest more than 2.5 billion kroons on development during the 2006-07 financial year.
Despite the ambitious plans, the state-owned company said it would not forsake renewables in its energy mix. Raimo Pirksaar, head of the company's renewable energy arm, said Estonia could generate around 750 gigawatt-hours of electricity annually from renewable energy and waste.
Specifically, there is potential for four large cogeneration plants with an electrical capacity of 20 megawatts and annual heat production of 600 GWh, as well as a dozen medium-capacity plants with an electrical capacity of 3 MW and 90 GWh thermal power capacity.
Pirksaar noted that the necessary precondition for cogeneration plants is the existence of heat consumers, a distant heating network and electricity network, not to mention close cooperation with both the local self-government and the operator of the distant heating network.
Cogeneration of electricity and heat allows for the use of fuel in a more effective and environmental friendly way, keeps the cost price of both heat and electric power lower, and offers an extra capacity for peak consumption.
In 2004, 40 percent of Estonian boilers were fired by natural gas and 32 percent by peat and biofuels.
Estonian Energy posted sales of 1.6 billion kroons (103.5 million euros) and earnings of 532 million kroons for the first three months of the new business year that started in April, both up some 15 percent year-on-year.
Remarkably, the company earned a substantial part of the profit 's 386 million kroons 's from the sale of emission quotas.