The government of Estonia announced it paid €63mn ($63.8mn) in its third tender for national gas storage this year to purchase 250GWh for its strategic reserve. This brings Estonia storage to near 50% of its 1 TWh gas procurement target with bought 200 GWh across two earlier tender rounds. The government disperses state funds through national agency Estonian Stockpiling Agency.
The Estonian government has allocated €170mn of supplementary budget funds for the national strategic reserve this year. The reserve provides the government with a fallback position should Gazprom cause further disruption to European gas markets this winter. Estonia aims to phase out Russian gas imports by year-end.
Just last week Estonia saw record high electricity price on Wednesday evening with several energy blocks of the Narva Power Plants undergoing maintenance. The blocks have a combined output of some 1,300 megawatts, while only a little over one-third of that was available on the market on Wednesday. The significance was that with no warning Latvian and Lithuanian gas plants were off the market and the Eesti Energia could not imagine the entire Baltic region’s power would depend on Estonian thermal power stations, Eesti Energia CEO Hando Sutter said.
Eesti Energia’s theoretical total production capacity is 1,200 MW, which should drop to 1,000 MW should one of the company’s units fall out of commission. This level of production was kept on the market between late winter last year and this spring. Normally, neighbors’ gas plants have compensated for the gap in output created during summer maintenance.
Amid further wholesale price spikes, Estonian minister of economic affairs Riina Sikkut said the third tender round attracted more bids than predecessors. The government paid €252/MWh in the third tender, compared with €192/MWh in the previous round.
Eesti Energia plans to quadruple its renewables capacity in the coming years. By 2030, the company must be able to generate enough renewable energy to cover Estonian consumption. Sutter said that Eesti Energia’s soaring profits, that are disgruntling customers forced to pay high prices, will make these investments possible.
From the TradersCommunity News Desk