Estonia’s energy supply is unique among International Energy Agency (IEA) member countries because of its strong reliance on domestically produced oil shale, which dominates electricity generation, according to an IEA report on Friday.
Estonia is on the brink of a major energy transition that will involve a substantial change in the role of domestically produced oil shale in its energy mix, the IEA said in its in-depth review of the country’s energy policies.
Using domestic sources provides the country with a high degree of energy independence, but it also gives Estonia the highest carbon intensity of all IEA countries.
"Oil shale, an energy-rich sedimentary rock, and the shale oil produced from it are different from light tight oil (sometimes also referred to as shale oil), which is produced from shale formations, often together with shale gas, in hydraulic fracturing. This is not done in Estonia," the IEA reported.
- Future expectations
According to the in-depth review, in the future, Estonia’s transport and power sectors will need to shift to lower-carbon energy sources.
"Its industry is set to move towards extracting higher value from the country’s oil shale resources by producing more liquid fuels that also have environmental benefits," the IEA reported.
Today, Estonia’s level of electricity interconnection is already substantially higher than the target set for EU countries, the IEA said.
"The expected synchronization of the Baltic electricity grid with the continental European grid by 2025 will further increase Estonia’s security of electricity supply. This will also alleviate any potential supply concerns arising from the expected reduction of electricity generation from oil shale," the agency added.
Commenting on the report, Fatih Birol, the IEA’s executive director, said the transition represents a major economic and social challenge, and recommended to support the transition, that the country identifies cost-effective pathways for the decarbonization of its energy sector.
Estonia made strong progress in the deployment of wind power until 2015, but significant administrative barriers have since emerged. As wind power is likely to be the lowest-cost technology for future large-scale renewable energy projects in Estonia, the IEA encourages the government to quickly address the barriers to its deployment.
“I congratulate Estonia on already achieving its mandatory EU emissions reduction and renewable energy targets for 2020,” Birol said, and added the agency considers that it is possible to reach the ambitious targets for 2030, but noted it would require more determined action, while taking economic and energy security considerations into account.
The in-depth review of Estonia’s energy policies is the first by the IEA since the country became the 29th member of the organization in 2014.
By Gulsen Cagatay