Estonia plans small nuclear reactor to quit oil shale by 2030

Estonia plans to build a small modular reactor (SMR) to wean itself off the addiction to polluting oil shale and meet its target of producing 100% decarbonised electricity by 2030. A vote in Parliament is expected “in the first half of 2024,” officials say.

After two and a half years, the Nuclear Energy Working Group set up by Estonia’s Environment Ministry in 2021 published its report on the potential use of nuclear energy in the country.

The main conclusion of the report, published in December, is that it is possible to build a small modular reactor to meet Estonia’s objective of decarbonising the electricity sector by 2030.

Antti Tooming, deputy undersecretary of the Ministry of Climate and head of the working group, told the press in December that “nuclear energy has the potential to ensure a stable energy supply in Estonia for future generations”.

In an interview with Energy Intelligence, he explained that the nuclear programme “supports our ambitions towards the 2050 climate neutrality goal”. Moreover, “it helps us to achieve electricity security in Estonia, so we can cover our own electricity needs with electricity produced in Estonia.”

Reelika Runnel, coordinator of the Estonian Nuclear Energy Working Group, told Euractiv that the report “will be discussed within the government, where decisions will be taken on how to formulate the decision in principle on the potential use of nuclear energy”.

The Estonian Prime Minister, Kaja Kallas, said on Monday (15 January) in front of the Riigikogu (State Assembly of Estonia) that government discussions would take place “either this week or next week”.

The official date for the vote on this bill has not yet been set, but the coordinator suggested that the “Parliament will be ready to take a decision on the potential deployment of nuclear power in Estonia in the form of SMR, in the first half of 2024.”

Transitioning from oil shale 

Until now, Estonia’s energy independence was ensured by the exploitation of oil shale, one of the most polluting fossil fuels. This sedimentary rock can be burnt as a low-grade fuel for power generation and heating.

“Oil shale provided nearly half of primary energy in 2021 but due to the energy crisis, the share increased to 57% in 2022,” explained Andrei Belyi, adjunct professor in energy law and policy at the University of Eastern Finland and CEO of Estonian energy consulting firm Balesene OÜ.

At the same time, the exploitation of oil shale is highly polluting, representing 56% of the country’s greenhouse gas emissions in 2019, according to EU statistics.

For this reason, Tallinn is seeking to diversify its energy mix in order to achieve climate neutrality by 2050, in line with EU targets.

Quitting oil shale is also becoming more urgent as the operating costs of running the plants are expected to surge in the coming years due rising carbon prices on the EU’s Emissions Trading Scheme.

But for Antti Tooming, the development of renewable energies cannot be the only solution: “There’s always not all the time wind and not all the time sun, and we don’t yet have the technology for storage of electricity in that amount. We need a specific amount of dispatchable energy.”

€73 million project

From the moment the programme was started in 2021 until the first production of electricity, the Estonian working group’s report expects a period of 9 to 11 years, for a total cost of €73 million.

Kalev Kallemets, CEO of Firmi Energia, a company set up in 2019 to promote SMR technology in Estonia, explained in emailed replies to Euractiv that the programme “is now targeting two 300 MWe units, for a total of 600 MWe of electricity production and remote heat production”.

The technology chosen is the BWRX-300 reactor developed by GE Hitachi, according to a press statement released in February last year by Firmi Energia. The first prototype of this model is expected to be built in Canada and has also been selected by PKN Orlen in Poland for part of its planned fleet of 74 SMRs.

Regarding the selection of the site, a preliminary study completed in spring 2023 selected 16 regions for construction. One was excluded for reasons of national security.

“Socio-economic impact analyses have been carried out for the remaining 15 regions,” Runnel explained. “As a result, it was recommended that first consideration should be given to establishing a nuclear power plant in four regions, one of which is located in western Estonia and the other three on the northern coast,” he told Euractiv.

As the Baltic country has not made a final decision on the deployment of nuclear power, no site selection has yet been made.

Asked about the risk of building a nuclear power plant close to Russia, the coordinator of the working group appeared confident.

“It has been concluded that, given the small size of Estonia, the location of the SMR is not of major importance. However, if the plant is located less than 50 km from the Russian border, additional safety considerations must be taken into account.”

Regarding the financing of the project, the Estonian government does not intend to contribute to the construction costs of either the plant or the company, preferring to put the project out to tender.

Just transition challenge

Another important consideration for Estonia is the socio-economic impact of the transition away from oil shale.

The industry currently provides a livelihood for around 40% of the population in the Estonian region of Ida-Virumaa near the Russian border, contributing almost half to its GDP. The end of the shale industry could lead to the economic isolation of this mostly Russian-speaking region.

To support the transition, the European Commission has announced €354 million in subsidies for Estonia coming from the EU’s Just Transition Fund (JTF).

“The plan provides for investment in solar, wind and hydro power, as well as renewable hydrogen, and supports the development of renewable heating solutions. It also includes the restoration of contaminated brownfield sites,” the Commission said, adding this will help create around 1,100 direct jobs for the region.

The SMR project could be built on the site of a former oil shale site, thus providing access to a workforce with industrial experience, as well as attracting managers and higher white-collar professions to revitalise the region.

The fate of the programme now hangs in the balance with the upcoming vote in the Estonian Parliament. According to opinion polls, 60% of Estonia’s population are supportive of the project.

The project is not consensual. Kadri Simson, the EU’s energy commissioner who hails from Estonia, has expressed scepticism about the project, saying the country’s energy needs could be met with “a better interconnected electricity market” without requiring each EU country to build its own nuclear plant.

Estonian Prime Minister Kaja Kallas herself acknowledged that nuclear energy has pros and cons, without elaborating. “In the sense that there has to be a popular consensus on this, I think that is absolutely correct,” the prime minister told the Estonian assembly, according to public broadcaster ERR.

If the programme is not adopted by Parliament, “the alternative available is to have a few gas turbines running on biomethane”, Tooming said in his interview with Energy Intelligence.

[Edited by Frédéric Simon/Zoran Radosavljevic]

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