Estonian utility waiting on 2013 free carbon allowances

26 February 2014 14:20 Source:ICIS

Estonian utility Eesti Energia said on Tuesday it had not been allocated any free emissions except for those decided on in 2012 by the European Commission for the purpose of building a 300MW power plant.

These amounted to 18m tonnes of free emission allowances for 2013-2020 as an investment subsidy for the plant.

The European Commission in February approved a free EU allowance allocation request from Estonia, which is one of eight countries granted the right to apply for a derogation to help modernise its electricity sector ( see EDCM 13 February 2013 ).

The 300MW oil-shale and biomass-fired unit in Auvere is under construction and will be finished in 2016, rather than 2015 as initially planned, a spokeswoman for Eesti Energia said on Tuesday.

Closures of older oil shale plants had not yet been decided upon, she said. “However, investments will continue to be made in older units for upgrades to meet environmental targets such as reducing SOx and NOx emissions.”

The company also announced late last week that it has decided to has scrap plans for a second 300MW unit in Auvere.

The Auvere unit that is going ahead is expected to be less emissions-intensive than existing plants and can complement power generation with up to 50% from biomass ( see EDEM 15 May 2012 ).

“Eesti Energia recently renewed its strategy and the main focus is on the co-production of shale oil and power,” said the spokeswoman.

Electricity production from shale oil with gas derived as a by-product in the process, is less carbon intensive than direct electricity generation from oil shale, she added.

In 2012, close to 70% of Estonia’s primary energy supply was delivered from oil shale, while close to 80% of greenhouse gas emissions came from oil shale combustion at Eesti Energia’s power plants in Narva, according to the IEA.

A discussion of the country’s long-term energy development plan for 2030 by the Estonian Development Fund outlines five different electricity generation scenarios in which Estonia’s annual CO2 emissions by 2020 can vary between 0.1-11m tonnes CO2 equivalent. Sonja Caymaz

By Sonja Caymaz