Tiny Estonia dreams of Baltic energy circle

(NARVA) - As the European Union scrambles to beef-up energy security, one of its smallest members has big plans to diversify energy sources and boost electricity exports to other Baltic region EU states.

Thanks to its status as the world's leading oil shale producer, tiny Estonia is self-sufficient and a net exporter of electrical power derived from its number one natural resource.

While the reliance of Russia's neighbouring Leningrad region on Estonian energy exports dates back to the Soviet era, Estonia is now looking to supply the Nordic and Baltic markets.

Last January Estonia, which joined the EU in 2004, took the shrewd step of connecting its electrical power grid to fellow-member Finland via the Estlink energy cable. The move significantly expanded the scope for Estonian electricity exports.

More such links are in the works, according to a senior Estonian official.

"Until January this year when we opened the Estlink energy cable in the Baltic Sea between Estonia and Finland, the Baltic states were kind of separated electricity islands in the EU," Juhan Parts, Minister of Economy and Communications, told AFP.

"The target is to link all the Baltic states to the electricity network of the Nordic states," he said.

Energy grids in Estonia, Latvia and Lithuania dating from the pre-1991 Soviet era plugged the region into the Russian network. Only now are moves finally being made to establish stronger energy ties among the three states and with their new EU neighbours to the north and south.

The Balti and Eesti power plants in Narva, on Estonia's border with Russia, fire Estonia's ambitions to become a leading light in electrical energy in the Baltic region.

The recently modernised Soviet-built stations are the world's largest oil shale-fired electrical power facilities. They play a crucial role in Estonia's economy, making it one of the few EU states boasting electricity self-sufficiency.

Mining and refining some 14 million tonnes of the oil-soaked rock per year, Estonia is a world leader in oil shale-based energy production, and boasts an estimated 100 years' worth of commercially-viable reserves.

Estonian expertise in producing energy from oil shale has not passed unnoticed even in the oil-rich Middle East. Jordan, which holds 4.0 percent of the world's oil shale reserves, has asked Estonia to share its expertise.

But not everyone is happy. Burning oil shale, and plans to boost exports of electricity generated by it, irritate the Estonian Green party.

Environmentalists warn of the health risks of sulphur dioxide emissions from Balti and Eesti.

"Estonia is acting like some diamond-selling under-developed country," say Green Party statements blasting Estonia's oil shale-fuelled electrical exports.

Bent on diversifying energy sources, Estonia is also looking to tap nuclear energy in joint projects with Finland and Lithuania.

Power from a planned nuclear station to replace Lithuania's Soviet-era Ignalina plant could be sent both north to Latvia and Estonia and possibly south to Poland via an "energy bridge."

On the renewable energy front, Estonia recently launched a plan to build the largest wind park in the Baltic States.

"The aim is to increase the share of wind power, currently one percent, to 20 percent by the year 2020," Raine Pajo, the technical director of Estonia's national energy company Eesti Energia, told AFP.

"We plan to sell energy to two million customers in the Baltic Sea region by 2015," Pajo added, which would be a four-fold jump from today.

Experts believe diversification and the development of a regional power grid plugging the Baltic states into the wider EU network can only serve consumers' best interests.

"We believe that regional market-based cooperation on energy will also decrease the cost of energy," Jaanus Arukaevu, head of the energy trading division of Eesti Energia told AFP.

"We can together use more wind energy of the Baltic states, hydro energy of Scandinavia and increase regional cooperation on nuclear power."

"I am certain that five years from now every Finn will be able to buy electricity directly from Estonia if they wish," Arukaevu said.