Eesti Energia starts new power plant construction

Eesti Energia decided today to give Alstom consortium a full notice to proceed with the construction of up to 600 MW capacity new power plant.

The new power plant is a substantial investment decision for Eesti Energia and the company expects to carry it out within the framework of current financing policy.. The full support of the Government of Estonia for this investment decision (as expressed by the Government Cabinet decision on 6th of May 2011) is of significant importance to Eesti Energia.

Even though Estonia withdrew the previously proposed state aid scheme for oil shale powered units in 2011, the need for new power generation capacity in Estonia has been acknowledged by European Union. As an alternative support mechanism, Government of Estonia is exploring a partial financing of the new power plant with granting Eesti Energia free CO2 allocation in phase 3 (2013-20). Government of Estonia is expected to present CO2 allocation plan for phase 3 together with the corresponding investment plan for European Commission approval by 30th September 2011.

New power plant of up to two power units (2 x 300 MW) equipped with circulating fluidised bed technology (CFB) will be built next to an existing Eesti Power Plant close to Narva. Commissioning of the first power unit is scheduled in the end of 2015. Investment decision on the second unit will be taken in 2012. The first unit costs 543 million euros, total investment cost of the power plant is approximately 950 million euros.

Investment to new power plant ensures more environmentally sustainable energy generation in the future and necessary energy generation capacity when some of the old power units have to be decommissioned. CFB technology enables using up to 50% of biomass as a fuel alongside oil-shale. Substantial usage of biomass allows reducing the CO2 emissions of the new power plant to the EU average level.

Veiko Räim
Head of Investor Relations and Treasury
Eesti Energia AS
Tel: +372 715 2884
Mobile + 372 5668 1568
[email protected]