Identifier
Created
Classification
Origin
07TALLINN352
2007-05-30 14:21:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tallinn
Cable title:  

Estonian Policy Makers Discuss Energy Options

Tags:  ECON ENRG PREL RU EN 
pdf how-to read a cable
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

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