Energy Sector in Estonia

Ando LeppimanEnergy Department,

Head of fuel and energy market division

Topics

• Estonian Energy Market Overview

• Trends in Estonian energy market and

• Estonian Energy Market in the EU and world context

Estonia: Key Fact Sheet 2005

GDP (in current prices) 10,5 Bill. EURAnnual GDP growth +9,8%Primary Energy Consumption ~212 PJAnnual Change in Primary Energy Consumption

-2,3%

Electrification Rate 99,99%Electricity Consumption 6 403 GWhAnnual change in electricity consumption

+1,2%

CO2 intensity 1990 in the EU 25

00,5

11,5

22,5

33,5

4

SWEFRA FIN LIT

AUTSVK

LAT BE NLESP

PRTHUN

SLO ITA GE UK DK IRLLUX

CYPMLT

GRE CZPOL

EST

tCO

2/to

e

CO2 intensity 2003 in the EU-25

00,5

11,5

22,5

33,5

SWE LITFRA

LAT FINSVK BE

AUTSLO HUN NL

PRTESP GE UK ITA

LUX CZ DK IRLEST

CYPMLT

POLGRE

tCO

2/to

e

GDP growth and Primary Energy Supply in Estonia

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004 2005 2006

GDP Growth inPPP compared to2000 level

Change inPrimary EnergySupply comparedto 2000 level

Structure of Primary Energy Supply in Estonia in 2005

Oil-shale55,1%

Peat0,8%

Wood11,0%

Natural Gas15,1%

Oil products17,5%

Coal0,2%

Others0,2%

Calculated usage of fuels for internal electricity demand in Estonia in 2005

Peat0,2%

Oil shale88,7%

Shale oil0,3%

Natural Gas6,8%

Oil shale gas2,7%

Renewables1,3%

0

2000

4000

6000

8000

10000

1995 2000 2005

Net Electricity Balance of Estonia

ExportsLossesConsumption

Strategic Energy Policy ObjectivesSelf-sufficiency

• Ability to cover domestic electricity needs any time by producers located in Estonia.

Increase in the use of renewables• Indicative target 5,1% of power by 2010 (2001-0,1%; 2005-1,2%).• Main emphasise on the biofuels based CHP generation and

windpower.Increase in the use of CHP-s

• Indicative objective 20% of power from CHP-s by 2020 (today 12-13%).

Efficiency Improvements:• Primary Energy Consumption shall not exceed until 2010 the level

of 2003.

Target 5,1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2000 2001 2002 2003 2004 2005 2006 2010

Development of the Share of Renewables in Gross electricity consumption in Estonia

WindWoodOther RES

Interesting Facts • Transit of crude oil and its products via Estonian

ports exceeds local consumption over 30 times.• Power transit via Estonia from Russia to Latvia

and Kaliningrad region represents ~10% of the total consumption.

• No congestions in the power and gas transmission grids – technically 100% of the power needs of Estonia could be imported.

• The share of district heating in the heating market is above 70%. CHP-s generate ~12% of power and ~40% of heat.

GDP energy intensity in 2004 in the EU (toe/GDP $2000)

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

Denmark

Irelan

d

United K

ingdom

Austria Ita

ly

German

y

Franc

e

Sweden

Netherlan

ds

Luxe

mbourg

Spain

Belgium

Greec

eMalt

a

Portug

al

Cypru

s

Finlan

d

Slovenia

Latvi

a

Hungar

y

Poland

Estonia

Lithu

ania

Czech

Rep

ublic

Slovak R

epub

lic

toe/

1000

*GD

P

Change of Energy Intensity (toe/M€95) during 1995-2003 in the EU

-60%-50%-40%-30%-20%-10%

0%EST

POLLIT IR

ELAT

HU SWESLO SVK

MLTLUX

UK DK NL GERBE GRE

CZ FRAESP

FIN CYPPRT

ITA AUT

Primary energy consumption per capita in the EU in 2004

0

2

4

6

8

10

12

LUX FINSWE BE NL CZ

FRAGER

AUT UKEST

IRE DKSLO SVK

ESP ITACYP

GRE LIT HUPRT

POLMLT

LAT

toe/

capi

ta

Dependence on imported energy sources among the EU-25

-60

-40

-20

0

20

40

60

80

100

CY PTLUX LV IRE IT

ESPAUT BE

GRE FISK HU

GER LTEU25 SL

FRASWE NL CZ

EST PL UK DK

%

The share of eletricity export/import balance in the EU Member States in 2004

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

LUX

LAT HU NL

ITAPRT BE

IRE

FINGRE

AUT UKCYP

MLTGER

ESPSW

ESLO SVK DK

POLFRA CZ

EST LIT

Share of renewables in the energy balance of the EU Member States

0

5

10

15

20

25

30

35

40

LV 2004

SE 2005

FI 200

5

AT 200

4

DK 2005

PT 200

4

SV 2005

ET 200

4

LT 2005

IT 2005

FR 2005

SP 2004

GR 2004

DE 2004

HU 2005

PL 200

5

SK 2005

CY 2005

CZ 200

5

IE 2005

NL 200

4

BE 2004

UK 2005

LX 2005

MT 2004

Conclusions

Estonia is a well-placed partner in the international energy markets

Energy market of Estonia is in many respects different from other countries

Estonia is headed towards own, but more sustainable energy supply

Energy efficiency improvements can decouple economic growth and energy consumption

Thank you for your attention!

Ando Leppiman+372 6 256 481

Ando.Leppiman@mkm.ee