6. NATURAL GAS
The Balticconnector project is being jointly developed by Elering and the Finnish stateowned company Baltic Connector Oy. It will link the Klaipeda LNG regasification storage terminal in Lithuania and the Inčukalns gas storage in Latvia with Finland via the
Estonian network. The pipeline’s bi-directional transmission capacity will be 7.2 mcm/d, and include two compressor stations, in Inkoo, Finland and Paldiski, Estonia. The project also includes the renovation of the Karksi interconnection between Latvia and Estonia, expanding its capacity (to 10 mcm/d from the current 7 mcm/d), allowing bi-directional flow, and including a compressor station at Puiatu. As one of the European Commission’s declared projects of common interest towards improving gas supply security and creating an integrated European energy market, the project is co-funded to the extent of 72% of the total investment costs, estimated at EUR 285 million. Renovation to the Karksi interconnection is to be completed in 2019 while the connection between Estonia and Finland will be completed in 2020 (Elering, 2018).
The GIPL project, connecting Lithuania and Poland, will integrate the Baltic states and Finland (after the completion of the Balticconnector) with the unified Central European gas market. This will provide access to alternative supply sources for the Baltic region via Poland’s LNG connections, in addition to Russia and the Klaipeda LNG terminal, and create the conditions for competition in an open gas market. The GIPL will also enable
Polish market participants to use the Inčukalns storage facility in Latvia. It was originally planned to be completed in 2019, but as the gas route in Poland was changed, completion is now planned in 2021.
Gas emergency response
Gas emergency policy and organisation
Overall responsibility for security of gas supply is divided between the TSO – Elering, the Competition Authority, and Ministry of Economic Affairs and Comunications (MEAC). According to the Estonian Natural Gas Act, gas supply to household customers may not be interrupted or restricted during the period from 1 October to 1 May. The obligation for supplying protected customers is imposed on Elering, which would draw the required volumes from its stocks held in Inčukalns. Gas supply to entities producing heat for heating of residential spaces and that do not have the possibility to use another fuel other than gas may not be interrupted or restricted during the same period either. The only exception to this rule is in cases of danger to the life, health or property of persons, or to the environment, or by agreement of the parties.
In order to reduce possible risks to the security of gas supply and to cope with any gas supply disruptions, the Competition Authority prepares a risk assessment, preventive action plan and emergency plan, in accordance with the Natural Gas Act and EU Regulation No. 2017/1938. The plan is updated and approved by the minister every two years. According to the latest (2018) plan, the once in 20 years peak demand (January 2006) was equal to 6.7 mcm/d, of which the highest daily consumption of protected consumers was 1.0 mcm.
Based on these figures, Estonia’s security of supply standards are the ability to guarantee supply volumes of 7 mcm (for supplying protected consumers over 7 consecutive peak demand days) and 30.4 mcm (to cover 30 days).
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6. NATURAL GAS
Network resilience
Estonia, is required to meet the infrastructure standard detailed in Article 5 of the EU Gas Security of Supply Regulation No. 2017/1938, which relates to the ability to satisfy total gas demand in the event of a disruption of the single largest gas infrastructure, during a day of exceptionally high gas demand occurring with a statistical probability of once in 20 years. The EU infrastructure standard is met where the N-1 value is greater than or equal to 100%.
Estonia met this infrastructure standard in 2017, with 104.5%, based on the peak demand and the 7 mcm/d capacity of the Karksi connection being the single largest infrastructure within a total transmission network capacity (incoming) of 14.0 mcm/d (Competition Authority, 2018). With the closure of the Narva interconnection starting in 2019, the infrastructure standard is no longer being met. However, with the completion of the Balticconnector (the interconnection at Paldiski will have a capacity of 7.2 mcm/d) and the Karksi interconnection modifications (the capacity expansion to 10 mcm/d), Estonia will once again meet the standard in 2020.
Emergency response measures
The obligation of supplying protected customers is imposed on the TSO Elering, which would draw from stocks held in the Inčukalns storage facility in Latvia. Elering secures the required volumes by signing purchase option agreements with winners of public procurements, which it launches following updates to the Emergency Plan.
The TSO is responsible for reporting to MEAC on any event which has, or could have, a significant adverse effect on the supply situation, and on any market measures being applied by the system operator to mitigate the disruption. MEAC, together with the Competition Authority, would analyse the situation and determine whether any of the measures of compulsory reduction of gas demand listed in the Natural Gas Act are necessary. If so, the ministry would make a proposal to the government, including the specific measures to be used, the reasons for implementing these measures and the expected number of days the measures are to be in effect.
According to the Natural Gas Act, the emergency response plan could include actions to:
reduce the supply of gas to persons who use gas for purposes other than for producing heat
authorise a reduction in the supply of gas to entities producing heat
authorise a reduction in the temperature of the water used for heating residential buildings
obligate entities producing heat to switch to alternative fuels.
The TSO has signed co-operation agreements with its key counterparts (i.e. industrial customers, distribution system operators, system operators of neighbouring countries) to facilitate activation of crisis measures. In the event of a government decision to introduce mandatory measures to reduce gas demand, the TSO will inform its key counterparts and the Competition Board about the decision and its planned steps to implement the decision. Industrial users, including electricity generators, would then fulfil their role in the TSO’s emergency response plan by reducing gas consumption by up to 80%, with measures which:
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ENERGY SECURITY