Estonia

Index rank 68

Balance Score

BCD

Energy Sustainability Index Rankings and Balance Score

 2011  2012  2013  Trend Score
Energy Performance  83  81  82   
Energy Security  74  64  65  C
Energy Equity  48  51  51  B
Environmental Sustainability  115  117  117  D
         
Contextual Performance  23  26  25   
Political Strength  24  24  26   
Societal Strength  28  30  30   
Economic Strength  29  34  35   
         
Overall Rank  66  65  68  BCD
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Fossil Fuel Reserves

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Key Metrics

Industrial sector (% of GDP) 30.2
TPEP / TPEC  (net energy importer) 0.72
Emission intensity (kg CO2 per USD) 0.90
Energy affordability (USD per kWh) n.a.
GDP / capita (PPP, USD); GDP Group 20,657 (II)
Energy intensity (million BTU per USD) 0.23
CO2 emissions (metric tons CO2 per capita) 16.00
Population Access to Electricity (%) 100.0
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Index Commentary

Although Estonia’s performance remains relatively stable across all dimensions, very slight deteriorations in energy security and political and economic strength result in the country slipping three places in this year’s Index. Estonia continues to struggle with balancing the energy trilemma, as the country’s poor performance in mitigating its environmental impact lags far behind its energy security and energy equity rankings. The energy security dimension sees the energy consumption growth rate outpacing economic growth, but also a more desirable total energy production to consumption ratio as the result of boosted production. Meanwhile, both gasoline and electricity become slightly more expensive for Estonians, although the country’s energy equity ranking stays flat. Estonia’s environmental sustainability performance continues to be poor with high energy and emission intensity and high CO2 emissions from electricity generation, which are undoubtedly related to its electricity fuel mix that relies very heavily on fossil fuels. Estonia’s contextual performance remains solid.

Trends and Outlook

Estonia has over the last couple of years successfully worked on improving its security of energy supply by diversifying its energy imports, increasing the domestic electricity production capacity to exceed domestic demand and increasing the share of domestically produced liquid fuels and thereby its export capability. Estonia still struggles with environmental impact mitigation, mainly due to CO2 emissions from electricity production.

Recently, Estonia has had several excellent developments: 1) due to the increase of production of renewable energy, the government is now in a position to negotiate decreasing subsidies for renewable energy with the energy industry. In the first half of 2012 the share of renewable electricity production reached 20.4% of consumption; 2) new shale oil production units are being built, leading to less dependence on imports of petroleum products; and 3) regulated electricity prices were completely abolished as of 1 January 2013, which is expected to lead to a slight increase of electricity prices..

The key trends, which are expected to support Estonia’s moving up in the Index rankings, are: 1) the continued increase of the share of renewable energy in the electricity production mix; 2) the building of new interconnection poweer grid capacity with neighbouring countries; and 3) the ability to satisfy most of its need for diesel fuel from refining shale oil. However, Estonian policymakers also need to focus on the other two aspects of the energy trilemma, environmental impact mitigation and social equity, while keeping energy security levels high.