Estonian Power Company Lays off 1,300 Workers as Russian Electricity Floods Market

Estonia’s state-run energy company Eesti Energia will temporarily lay-off up to 1,300 employees over the summer, citing cheaper Russian electricity flooding the market, according to local media.

The decision was also driven by a growth in cheaper electricity from Russia and Belarus on the Nord Pool multinational electric power market, twinned with EU carbon dioxide emissions quotas, which almost doubled over the same period, the company said.

The developments “…put EU electricity producers at a competitive disadvantage, as Russian electricity producers do not have to pay 25 euros per ton in quotas,” said Raine Pajo, a member of the Eesti Energia board. The resulting reduced load has put pressure on full-time employment, with temporary employment being the first imposed at the Eesti power plant, and other similar measures likely to arise elsewhere, as oil shale consumption falls.

Eesti Energia had already reduced its workforce, again temporarily, in April. This round of cuts will include miners, working in the company’s oil shale sector.

The exact number and distribution of employees affected will be determined later on this month. The temporary redundancy period can last up to 90 days within a 12-month period, during which wages may be cut to the minimum rate in effect, at around $600.

As a preliminary measure, employees will be able to use vacation allowances in the first instance, the company says. According to Eesti Energia, the number of people employed in oil shale extraction and energy generation from that source has fallen by 400 since the beginning of 2019.