A decision in principle is soon expected, though a definitive parliamentary decision could be five years off, and the power plant itself is unlikely to become functional before 2025.
A representative for Eesti Energia with the unfortunate name of Andres Tropp told Helsingin Sanomat that the government is already in the fields and bays of north Estonia scouting up locations. Its favorite site is Suur-Pakri, an island near Paldiski.
Suur-Pakri is known as Stora Rågö in Swedish and is one of the few locations in Estonia that is officially labeled in my Estonian road atlas in a language other than Estonian. These coastal islands were inhabited by the Estonian Swedes prior to the Second World War. During reprivatization, many of the former owners reclaimed their property, though only a handful returned to live there. I am unsure of what kind of conflict the erection of a nuclear power plant there would create with the local landowners.
More likely, the idea to place the plant close to Paldiski, which is now home to a farm of wind turbines, made sense to the government. The area could become a small power generating corridor within the country, far away from the troublesome border with Russia, where several hydroelectric plants are already located.
As for the option of connecting the Estonian grid to the future replacement for Ignalina in Lithuania, here is a demonstration of Baltic unity for you in a nutshell:
Originally the Baltic States were planning to set up a joint nuclear power station in Lithuania. Estonia and Latvia, however, grew weary after Lithuania decided to include Poland in the project the year before last. The project has advanced sluggishly.