STENBOCK HOUSE, Estonia (CHATNEWSTV) — The Estonian government on Thursday endorsed a proposal to auction off the state-owned Kiisa emergency reserve power plant by 2028, in a move officials say will lower electricity prices and align the country’s grid with European standards.
Energy and Environment Minister Andres Sutt said the sale, planned for no later than the first half of 2028, would allow the 250-megawatt plant to enter the market and ease price spikes on the exchange.
“Elering’s core responsibilities do not include operating a power plant,” Sutt told reporters after the Cabinet meeting. “Selling the Kiisa plant immediately would harm consumers, as the station currently covers our frequency reserve.”
Sutt said the government’s timing is strategic, given that Estonia’s derogation under EU rules—allowing it to use the Kiisa plant as part of its frequency reserve—will expire in 2028. Once that exemption ends, the plant will no longer be required for reserve duties, allowing it to be sold without added market distortions.
The plant, completed in 2014 and owned by grid operator Elering, currently serves as a backup power source and does not participate in the electricity market. It was built to ensure supply security and reduce reliance on foreign reserves.
Sutt noted that once the plant enters market competition, it could cut electricity prices by as much as €3.5 per megawatt hour. “While this may not be a significant amount, it is still a reduction,” he said.
The frequency reserve market, launched in February following Estonia’s desynchronization from the Russian grid, requires the country to independently maintain a stable electricity frequency—an obligation Kiisa has helped fulfill.
Until 2028, the government will continue to use the plant as a cost-effective frequency reserve, which officials say currently saves consumers from having to purchase reserve capacity from the open market.
Editor: Gabriel Ani
