Center Party chairman Mihhail Kõlvart sent an open letter to Prime Minister Kristen Michal a year ago, urging the government to abandon plans to shut down the oil shale industry and instead build a new oil shale power plant in Estonia. "Estonia's primary interest must be energy security," Kõlvart also wrote in an opinion piece published by Delfi two months ago.

Speaking to ERR after the Auvere drone incident, the Center Party leader reiterated that Estonia needs to build a new oil shale plant. He acknowledged that a power plant would be a potential target in the event of a Russian attack, but noted that Estonia is so small that even structures located far from the border are difficult to protect.

"In Ukraine, Russia is attacking energy infrastructure not only with drones but also with ballistic missiles, in which case 100 or 200 kilometers unfortunately makes no difference. The question is whether, if there is a threat of war, we should simply leave things undone and stop developing our energy sector altogether. One could just as well ask why we are building Rail Baltica in a situation where a single missile could halt all traffic — making it seemingly pointless," Kõlvart said.

Former commander of the Estonian Defense Forces (EDF) Martin Herem told ERR last week that he has advised the government not to build objects within at least 50 kilometers of the border if their loss is a concern. "Within that zone, they are relatively easy to destroy. Beyond that, it becomes more difficult," Herem said.

All of Estonia's oil shale power plants are located near the eastern border. "In wartime, we would definitely lose Auvere," current commander of the Estonian Defense Forces Andrus Merilo also said on the TV program "Esimene stuudio."

According to Kõlvart, however, a new oil shale plant does not necessarily have to be built where the existing ones are located. "There is certainly no understanding that it must for some reason be built near the border. At the same time, it cannot be argued that there is no point in building it because it could become a target. The same risk applies to gas and nuclear power plants," he said.

EKRE board member Rain Epler also said it would be reasonable to build new oil shale units, but they do not necessarily have to be located at the border where the plant may indeed be harder to defend.

"When discussing the location of a nuclear plant near Kunda, it is much farther from the border than two kilometers, but still not extremely far. We should consider whether there might be a better location elsewhere for an oil shale plant. Transporting oil shale by rail is not that difficult. I would not be fixed on the idea that a new unit must be built where the current ones are. There are other ways to think about it," he said.

Ministry of Climate Deputy Secretary General Jaanus Uiga said that if a plant is built somewhere other than the border area where oil shale plants have traditionally been located, higher costs must also be taken into account.

Currently, mining areas are located near the plants and this is no coincidence — the plants have been built close to the mines to reduce transportation costs, Uiga noted.

Eesti Energia can't say whether Auvere profitable

The biggest obstacle to developing oil shale-based electricity has not, in fact, been drones crossing the border from the direction of Russia, but rather the cost of oil shale power, which has become increasingly uncompetitive due to the European Union's greenhouse gas emissions trading system.

Enefit Industry CEO Lauri Karp said he cannot say whether the seven-year-old Auvere Power Plant is currently operating at a profit or a loss.

"In recent years, a large amount of renewable electricity — wind and solar — has been added to Estonia's power system. These now account for a significant share of Estonia's electricity production and due to its high variable costs, the Auvere plant is getting fewer and fewer operating hours. This certainly affects Auvere's profitability and that future outlook has also been reflected in our write-downs — we have had to reduce the value of Auvere several times," Karp said.

The Auvere Power Plant was completed in 2018, making it about seven and a half years old. Karp said that, including additional repair and development work, the 270-megawatt Auvere facility cost just under €700 million. Last year, Auvere generated around one terawatt-hour of electricity.

By comparison, according to the Ministry of Climate, a 100-megawatt gas-fired power plant costs approximately €100 million.

Kõlvart: Oil shale plant could be built even before EU carbon emissions reform

Mihhail Kõlvart acknowledged that under the current legal framework of the European Union, a new oil shale power plant would not be economically viable. However, he said the emissions trading system (ETS) should definitely be changed and that such changes will happen sooner or later.

"Under current conditions, would a gas-fired power plant be economically viable, considering gas prices and the outlook for the next three to five years? The war in Iran will have a lasting impact even if it were to end tomorrow — but it will not end tomorrow. We already know that a gas deficit awaits us for at least the next three to five years and no one knows what will happen after that. At the same time, we somehow still believe it makes sense to build a new gas plant," he said.

Enefit Industry signed a €100 million procurement contract just a few months ago to build a new 100-megawatt hydrogen-capable gas-fired plant next to the Auvere plant. It is expected to be completed in two years.

Kõlvart said that if new technologies are used in building an oil shale plant and the European Union's carbon trading system is revised, such a plant could be profitable. At the same time, he added that the Center Party would proceed with building a new oil shale plant even without a clear signal from the European Union that the system will be fundamentally reformed.

"Yes, looking at the long-term perspective, this is the right approach. The ETS or any other system may come and go, but we will always need energy sources. Not to mention that energy security is always an acute issue," Kõlvart said.

National fees make up just 5% of Auvere electricity price

EKRE board member Rain Epler also said that changing the European Union's quota system is not necessarily a prerequisite for building a new oil shale power plant. He noted that such a plant could be beneficial even without changes to the CO₂ quota system and that profitability could be achieved simply by lowering taxes in Estonia and amending legislation.

"We have domestic environmental charges that make up a significant component of the price. It is possible to act in the interests of our own country without waiting for a decision from the European Union," Epler said.

Lauri Karp said that domestic charges account for up to 5 percent of the price of electricity from the Auvere plant. The price of electricity generated at Auvere is around €90 per megawatt-hour, of which, he said, roughly two-thirds consists of the carbon cost imposed by the European Union.

This means that if the Estonian state were to theoretically reduce all environmental and pollution charges to zero, it would lower the price of electricity from the Auvere power plant by about €5, bringing it down to around €85 per megawatt-hour.

Karp: No sense betting on carbon capture

Mihhail Kõlvart said that, in reality, the most advanced technologies that would allow oil shale power plants to produce electricity more efficiently and much more cleanly have not yet been implemented.

A year ago, Kõlvart also wrote in an open letter to Prime Minister Kristen Michal that oil shale plants should be upgraded with a novel carbon capture technology developed at TalTech.

However, Lauri Karp said that although carbon capture technology is theoretically possible, it has seen very limited practical use internationally.

"In many cases, its technological maturity has not yet been achieved and to my knowledge, there are no demonstration solutions outside the laboratory that have been implemented in oil shale power plants," Karp said.

He added that even if carbon emissions from an oil shale plant are captured, the next question is what to do with the captured carbon dioxide.

"It has to be stored somewhere. If we do not store it in Estonia, it would have to be transported to Norway. This entire value chain is so expensive that it is very difficult to see it being economically viable," he said.

He noted that a carbon capture facility would itself be a large industrial installation requiring planning, environmental impact assessments and additional electricity consumption.

"If we connect Auvere to such a facility, even less electricity would remain available for consumers because part of the output would go toward powering the carbon capture system. It is an extremely complex setup. In practice, several projects in Europe have been halted as of March 2026. It is difficult to see a near-term perspective, which of course does not mean carbon capture could not play a role in the very distant future," Karp said.

Ministry of Climate does not see an oil shale plant as feasible

ERR asked Lauri Karp whether he sees any conditions under which it would be profitable to build a new oil shale power plant in Estonia. He replied that the company has not prepared any such investment project and that building a plant requires a very clear vision of what the energy sector and electricity generation will look like over the next 30 years.

"A plant of this scale is built for 30 years and planning, environmental impact assessments and construction can take eight to 12 years. We are talking about solutions that will not address today's problems," said the head of Enefit Industry.

On the one hand, oil shale-based electricity is expensive; on the other, building a new oil shale plant would also be costly.

"It is one thing whether operating costs can be recovered from the electricity market, but investors also want to recoup their capital with returns and service large loans. The potential cost of a new plant is already so high that it is practically impossible to finance it as a fossil fuel project, at least by European banks," said Jaanus Uiga, deputy secretary general of the Ministry of Climate.

Estonia's newest oil shale plant is currently the Auvere Power Plant, which was completed about seven and a half years ago. It has a capacity of 270 megawatts and oil shale accounts for only slightly more than half of its fuel mix. About a quarter of the fuel consists of biomass and another quarter is retort gas.

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