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Viewing cable 07TALLINN352, Estonian Policy Makers Discuss Energy Options

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Reference ID Created Released Classification Origin
07TALLINN352 2007-05-30 14:21 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tallinn
VZCZCXYZ0000
RR RUEHWEB

DE RUEHTL #0352/01 1501421
ZNR UUUUU ZZH
R 301421Z MAY 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9867
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 2509
UNCLAS TALLINN 000352 
 
SIPDIS 
 
STATE FOR EUR/NB 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON ENRG PREL RU EN
 
SUBJECT: Estonian Policy Makers Discuss Energy Options 
 
Ref: Tallinn 227 
 
1.  (SBU) Summary: At a recent roundtable discussion on the 
future of Estonian energy policy, key players in Estonian 
government, industry and academia renewed calls to increase 
Estonia's energy efficiency and its use of renewable energy 
sources, and to lessen the its energy dependence on Russia. 
Participants highlighted Estonia's interest not only in the 
Ignalina nuclear power project and connecting Estonia to 
Europe's power grid via Poland, but also in expanding 
energy ties to Finland and the rest of Scandinavia.  End 
Summary. 
 
2.  (U) On May 14, Estonia's state electricity company 
Eesti Energia hosted an "Energy Forum for Opinion Leaders" 
in Tallinn.  In his keynote address to the forum, Estonian 
President Toomas Hendrik Ilves urged reconsideration of 
Russia as an EU energy partner.  Against the backdrop of 
recent trade disruption measures imposed by Russia on 
Estonia, Ilves said that it is not sensible policy for 
Estonia to have an electrical connection with Russia.  He 
called on the EU to apply its trade rules consistently, for 
example, by examining Gazprom's secret supply agreements. 
He also suggested the EU take legal action against 
Gazprom's monopoly position in the market, just as the EU 
had vigorously pursued Microsoft's monopoly position in the 
operating system and internet browser market. Ilves further 
noted that Gazprom's practice of charging a higher price to 
foreign customers than to domestic ones violates WTO rules. 
 
Supply, Sustainability & Competition 
------------------------------------ 
 
3. (U) Eesti Energia Chairman Sandor Liive, Minister of 
Economic Affairs and Communications Juhan Parts, and three 
other energy and foreign policy experts participated in the 
ensuing 3-hour panel on the future of Estonia's energy 
policy.  The round-table format allowed each panelist to 
answer questions about Estonia's energy future from three 
major perspectives:  security of supply, environmental 
sustainability with respect to climate change, and the need 
to increase competitiveness and efficiency.  Minister Parts 
noted that ensuring "100 percent security of supply" tops 
the list of Estonia's priorities for the coming decade. 
Estonia's use of domestically-mined oil shale for 
electricity production helps, but Parts and Liive also 
identified several other steps Estonia should take to meet 
this goal: 
 
-- Perform repairs and upgrades to the national electricity 
grid; 
-- Complete construction of two new oil-shale fired power 
plants at Narva of 250-300 MW capacity each; 
-- Steadily increase utilization of renewable energy 
sources (currently biomass and wind account for less than 1 
percent of electricity generation); 
-- Construct a second "Estlink" electricity cable to 
Finland; and 
-- Continue cooperation with neighbors on nuclear power, 
and thereby link the Baltic power grid to that of Western 
Europe 
 
Ignalina and NordStream 
----------------------- 
 
4.  (SBU) In early 2006, the three Baltic countries (and 
later Poland) pledged to work together on a new nuclear 
power plant at Ignalina, Lithuania (reftel).  In addition 
to viewing Ignalina as a means for diversifying its 
electricity supply, the GOE sees construction of the 
Ignalina plant as way to connect the Baltic countries to 
the Western European power grid (UCTE).  Following the 
debate, Einari Kisel, Director of the Ministry of Economy's 
Energy Department, told us that indeed, the grid connecter 
could be built with or without a new power plant at 
Ignalina, but the plant will increase Poland's incentive to 
support connection of the two grids.  Liive noted that 
technically, connecting to the European grid is not 
difficult, but rather it is a political question. 
Ignalina, however, is not the only option Estonia is 
considering.  At the Forum, Minister Parts commented that 
he plans to discuss with his counterparts in Finland the 
possibility of Estonia being a partner in a new (sixth) 
Finnish nuclear reactor. 
 
5. (U) Minister Parts also briefly addressed the issue of 
the NordStream gas pipeline from Russia to Germany and 
whether this might pass through Estonian waters.  "We 
should probably have another forum just on this subject, 
but since Gazprom owns Eesti Gaas, this is unlikely" he 
noted.  (Note: Together, Gazprom and Germany's Ruhrgas own 
70% of Eesti Gaas.  On May 3, however, Parts met with 
representatives of NordStream for the first time.  The 
company is currently preparing to re-submit a request to 
the Estonian Ministry of Environment to consider routing 
the pipeline through Estonian waters.  End Note.) 
 
PHILLIPS