Companies and state representatives will jointly calculate which electricity generation portfolio is most affordable for Estonian consumers

The Estonian Chamber of Commerce and Industry, companies and state representatives are launching a joint quantitative analysis to calculate which combination of electricity generation, storage and interconnections can meet Estonia's growing electricity consumption at the lowest system cost, while taking account of conditions arising from energy security, security of supply and environmental requirements. The analysis will be completed by the end of February 2027.

The Energy Sector Development Plan (ENMAK) 2035 sets out the general directions for the development of Estonia's energy policy. To provide, alongside this, as concrete a basis as possible for investment decisions based on calculations, the state and companies have begun cooperating.

The quantitative analysis seeks to determine what generation and storage capacities and interconnections Estonia will need as electricity consumption grows and existing generation capacities reach the end of their service lives, and to what extent and in what order these should be developed.

The results of the analysis will make it possible to:

• Enable the state to make better-informed decisions about which technologies need investment, over what time horizon and at what level of consumption.
• Design support measures in a timely and cost-effective manner, knowing whether they are needed and, if so, for the development of which capacities.
• Give investors a better long-term outlook on the development of Estonia's electricity system, helping them assess the profitability of projects and make investment decisions.
• Inform the public about which capacities offer the best and most cost-effective solutions for meeting growing electricity consumption.

What question does the analysis seek to answer
The analysis seeks to determine which portfolio of generation, storage and interconnection capacities is optimal for Estonia at different levels of consumption and what investments it would require. For each consumption level examined, the solution with the lowest system cost that meets the specified requirements for security of supply, energy security and the environment will be identified. Optimisation will be based on system cost rather than the electricity exchange price, because the exchange price reflects only part of the costs ultimately borne by consumers.

The analysis will be conducted in accordance with the principles of intellectual honesty, freedom from ideology, impartiality and transparency. All technologies will be assessed on the same basis, and the outcome will not be guided by predetermined technological or ideological preferences. All assumptions and constraints affecting the analysis will be clearly presented and justified.

Who makes the decisions
The process is structured so that the input of the companies supporting the project and decision-making authority are clearly separated. The companies supporting the project and Elering belong to an advisory group, which provides sector-specific input and feedback but does not decide on the assumptions and inputs used in the model. These decisions are made by a steering group consisting of representatives of the state, academia and the Chamber of Commerce and Industry, which also approves the terms of reference, methodology, input data and constraints.

All key elements of the analysis – the terms of reference, methodology, inputs, results and conclusions – will be made public so that they can be discussed openly.

The project's interim results will not be commented on while the analysis is under way. Preliminary results emerging during modelling do not yet provide a reliable basis for public discussion. The project's results will be presented to the public when the analysis has been completed.

Who is participating
The analysis is funded by the companies participating in the project. The project is supported by Eesti Energia/Enefit, Utilitas, Alexela, VKG, Evecon, Baltic Energy Partners, Saare Wind and Fermi Energia, as well as electricity consumers Maag Food and Lemeks. Elering participates in the advisory group as the system operator.

The steering group comprises Einari Kisel (Ministry of Climate), Ahti Kuningas (Ministry of Economic Affairs and Communications), Raoul Lättemäe (Ministry of Finance), Erkki Raasuke (EIS), Evelin Pärn-Lee (Competition Authority), Jaak Aaviksoo (Estonian Academy of Sciences), Hannes Agabus (TalTech), Ivo Palu (Estonian Society of Electrical Power Engineering), Uku Varblane (Foresight Centre), and Mait Palts and Raivo Vasnu (Estonian Chamber of Commerce and Industry).

The project is led by Anne Sulling. The modelling partner is AFRY, an international energy consultancy with long-standing experience in electricity market analysis and modelling.

What happens next
The analysis will be completed at the end of February 2027, before the Riigikogu elections, so that those forming the new government can use the results to shape energy policy decisions. The same analysis can also be used for investment decisions and the development of support measures.

Background
The initiative grew out of a report published by Anne Sulling and Erkki Raasuke in April 2026, which examined the conditions under which international investors would be willing to invest in major energy infrastructure projects in Estonia. One of the report's central recommendations was to calculate the optimal portfolio of electricity generation, storage and interconnections for Estonia, in order to provide the state with an analytical basis and investors with the necessary long-term outlook.