Eesti Energia will establish a new oil shale energy complex

On Thursday, May 21, Eesti Energia’s Supervisory Board made the decision to commission a shale oil plant operating a new, more efficient technology, as well as to hold a procurement for up to two new oil shale-fuelled electrical power units.

Jüri Käo, Chairman of the Supervisory Board of Eesti Energia: “With this decision, we are making an investment which will enliven the regional economy of Eastern Estonia, ensure the sustainability of the company and guarantees jobs. The new technology is brought about by serious, continuous research and development right here in Estonia, which is especially commendable for increasing our international competitiveness.”

Eesti Energia’s CEO Sandor Liive says that the new energy complex, consisting of the oil plant and up to two new power units, is a major decision for the future of Estonia’s oil shale industry. “Eesti Energia’s strength lies in its comprehensive value chain from mining to customer services, and the oil shale industry has a fundamental role in this chain. With these decisions, we assert that besides a long history, the oil shale industry also has a great future for Eesti Energia,“ Liive said.

Juhan Parts, Minister of Economic Affairs and Communications commented on the decision by saying: “These investments principally mean three things for Estonia – jobs in the energy sector, future exports and energy security. I deem the development of shale oil production technology to be of importance, since it is a prerequisite for the future export of not simply oil but also the technology. It is clear that these investments require substantial contribution from the state in order to ensure well-considered financing.”

The new oil plant uses a more environmentally friendly, dependable and scaled-up Enefit technology, developed through Eesti Energia’s cooperation with the international engineering company Outotec. It will be the most efficient commercially utilized oil shale fuels production technology and an advancement of the currently used solid heat carrier process. The new plant will use 2.26 million tons of oil shale per year, producing 290 000 tons of shale oil and 75 million m³ of retorting gas which is used in electricity generation. There is also a 35 MW steam turbine integrated with the oil plant, which utilizes the residual heat from the oil production process. The construction of the plant will commence this year and the start-up of the oil plant will take place in 2011.

“Construction of the new oil plant is another step taken by Eesti Energia to establish a high-quality oil shale fuels industry in Estonia. It is also a precondition for offering our technology elsewhere in the world,“ Liive said. In the coming years, Eesti Energia plans to develop a liquid fuels industry, producing oil up to twice the value of the current shale oil that could be used as motor fuel according to existing fuel norms. “High-value liquid fuels are more valuable than any other oil shale product and by taking this step, we give the maximum value to oil shale, while guaranteeing Estonia’s energy security,“ Liive emphasized.

In the domain of electricity generation, an important decision was made to announce the procurement for up to two new oil shale-fuelled CFB units in 2009. The planned total capacity of these units would be up to 800 MW. In the event of a successful procurement, construction of the first unit could be commenced in a year and it would be completed in 2015. „By investing into new oil shale-fuelled units for the Narva Power Plants, we support maintaining our current production capacity, while making electricity generation from oil shale more environmentally friendly,“ said Liive. „Since our long-term goal is, however, to also diversify our production portfolio, a future alternative to the second 400 MW unit could be nuclear energy instead. We therefore reserve the right to refuse the second oil shale unit for a year after signing the agreement.“

The cost of the new oil plant is approximately 3 billion kroons. The cost of the electricity units will become apparent once the results of the procurement is evident in the end of 2010 and the final investment decision is made.

The joint components of the new energy complex are a common fuel feed system, utilization of retorting gas, the establishment of a joint ash processing system and a new cooling water extraction point, as well as a new joint 330 kV distribution grid (please see the attached plan).

Additional information:

Ave Mellik
Head of Communications for Electricity and Heat Generation
Eesti Energia
Tel 71 52 210
[email protected]

See also:
  • Energy complex 2x400 MW + Enefit 280 (.pdf)