Gren continues to develop in Ida-Viru, Estonia


The article was first published in the Ida-Virumaa daily newspaper Põhjarannik.

Margo Külaots, Head of Gren’s entities in Estonia, emphasizes the significance of Ida-Virumaa to the company. Gren is confident in the region’s future and plans to continue investing there.

In November 2022, Gren completed the acquisition of a 164-kilometer district heating network in Jõhvi and Kohtla-Järve in Ida-Virumaa, Estonia. This network, previously owned by Viru Keemia Group (VKG), will continue to utilize residual heat from VKG’s industrial processes to provide sustainable district heating for the homes and offices in the area.

Using residual heat to keep heating costs low
For Gren, utilizing residual heat, that would otherwise go into the atmosphere, is crucial in today’s changing environment. Residual heat is a valuable and reliable resource that reduces the consumption of primary fuels and Estonia’s dependence on imported fuels.

The use of residual heat also keeps the price of heating low. In Ida-Virumaa, the cost of Gren’s heating services is significantly cheaper than in nearby areas. For example, district heating in Rakvere is nearly 68% more expensive, and it is about 20% higher in Sillamäe and Narva.

Initial investments in the heating network
Gren operates a modern gas-fired backup heating plant in Ahtme and uses it occasionally during very cold weather. Due to the high cost and foreign origin of gas, this plant is rarely activated. Since the backup plant does not require new investments, the priority is updating the heating pipelines in the area.

Much of the heating infrastructure in Kohtla-Järve and Jõhvi is nearly 50 years old, with some sections dating back 70 years. Over time, the aging infrastructure leads to heat losses, affecting also reliability of supply.

According to Andres Klaasmägi, Head of Gren Viru, the quality of heating pipelines is crucial for ensuring supply security and service quality. One of the main benefits of district heating is its convenience, but this advantage maybe lost due to interruptions caused by poor pipeline conditions. Gren aims to minimize such disruptions.

Millions invested in pipeline renovations
Two years ago, Margo Külaots expressed optimism that Gren’s extensive experience in Tartu and Pärnu would positively impact the district heating sector in Jõhvi and Kohtla-Järve. Since then, Gren has actively sought solutions and invested in the region.

For example, over half a million euros have been invested in the heating pipeline at the beginning of Puru Road, and more than 660,000 euros in Pargi Street in Jõhvi. Plans for 2024-2026 include a further investment of 7.9 million euros for modernizing the heating pipelines.

Support from EIC
Gren applied for support from the Estonian Environmental Investment Centre (EIC) to renovate the district heating pipelines in Kohtla-Järve and Jõhvi. In March, EIC approved a grant of 2.23 million euros, with Gren contributing over 5.7 million euros. Construction is set to begin in June, with a goal to renovate 11.6 kilometers of pipelines in the coming years.

Gren is also negotiating to integrate some municipally owned network sections it currently operates into its infrastructure and planning investments for the next phase of pipeline renovations.

Focus on growth and investment
Ida-Virumaa has significant development potential, and new businesses and investors require modern energy services for heating and cooling buildings. As a responsible energy company, Gren aims to help local and international partners to develop a resource-efficient and carbon-neutral economy.

In collaboration with the Ida-Viru Industrial Areas Development Foundation, potential district heating customers have been identified in Jõhvi Business Park. Among them are major energy consumers, such as the Jõhvi film studio and a protein factory being developed by Danish investors.

Despite the continued mining of oil shale, the national and global trends indicate a decline in oil shale production in Virumaa. The region will need to adapt to the changes brought by the green transition. Gren is closely monitoring the future of oil shale mining in Ida-Virumaa and exploring its potential role in providing energy services to the region’s residents and businesses.

International climate goals, including the reduction of fossil fuel usage and the need to adapt to climate change, are rapidly transforming the energy market. Külaots notes that even if residual heat from the oil shale industry is no longer available in the future, investments from the EU’s Just Transition Fund and various investors could help to establish new industries in the region capable of supplying the necessary residual heat for district heating. Modern local biofuel combined heat and power plants could also be a viable option to provide heating for heating the area.

In Tartu and Pärnu, biofuels have provided stable heating prices over the years and are less volatile compared to gas. Importantly, biofuels used are sourced locally, ensuring that payments benefit local producers. Since Estonia does not produce gas, the money spent on gas does not stay in national economy.

District cooling expands to Ida-Viru
Gren is not solely focused on producing and distributing district heating but is moving towards integrating district heating and cooling into a unified energy system. Energy released during the cooling process can be used for heating and hot water production. District cooling is no longer limited to industries requiring cold storage; even ordinary buildings need cooler indoor climates during hot summers.

District cooling is Gren’s most innovative energy production and distribution method. In 2016, Gren opened the first district cooling plant in the Baltic States in Tartu in Estonia. A second plant in Tartu’s Aardla district and a third in Pärnu have since been added.

Külaots sees potential for district cooling in Ida-Virumaa, as some cities in the region have the necessary building density and a growing need for comfort.

Did you know? Gren installed an advanced industrial cooling system for the E-Piim dairy factory in Paide, with a total installed capacity of approximately 6,000 kW. The system uses high-efficiency equipment that employs ammonia as the refrigerant. Ammonia is highly energy-efficient and has minimal environmental impact, with a global warming potential (GWP) of zero. The waste heat generated during cooling is used to heat the factory building, significantly reducing the consumption of primary fuels.

Vision for the Future
Ida-Virumaa is one of Estonia’s fastest-developing regions, with constant exciting developments. From an industrial perspective, there is ample potential—deep ports, natural resources, opportunities for industrial investments, and a workforce of approximately 150,000 skilled and experienced individuals. The beautiful natural environment is also worth preserving, and Gren aims to contribute to sustainable development in the region.