Märt Poots, developer of the project, the Neugrund wind farm, which would be located off the northwest coast, told ERR that the company plans to challenge the government decision, in court. "We have no choice," he said.

The government said the wind farm in its planned location would have a negative impact on the performance of air surveillance radars, and would be in direct conflict with national security interests. 

Neugrund OÜ, however says the decision amounts to unequal treatment, given a wind farm in Paldiski got permission, despite its turbines also interfering with the operation of military radar, the company claims.

The Ministry of Defense said in response that these wind farms were planned and erected at a time when there was no obligation to coordinate with the ministry, while at the same time, the ministry says it cannot demand the dismantling of a functioning wind farm.

The government said that the developer also fails to meet planning requirements in that a successful applicant needs to be involved in the generation of electricity either itself, or belong to the same group as a company which does so, which, the government says, Neugrund OÜ does not.

Poots said the planned offshore wind farm would have a capacity of 300 MW, which he said would provide about a quarter of Estonia's consumption and would help reduce prices.

Poots said: "It's the only way to bring down energy prices quickly. We've done all the research, we've done a strategic environmental assessment. It's been four years of work, we've put a lot of money into that," adding that the permit procedure would take about a year, while construction would take another year.

The government ruled last Thursday that a building permit would not be granted to Neugrund, on the grounds that military radar would see their operability harmed by the development.

Poots had previously argued that, given the project began in 2006 and the application for the building permit was filed in 2010, the state had been actively looking for reasons to say no to the wind farm.

The planned development would be situated in the Neugrund crater, near the island of Osmussaar, would comprise nearly 40, 80-meter-tall turbines, covering an area of 12 sq km, with the building permit applied for having a 50-year term; additionally, the defense forces have training areas in the vicinity.

The case is not the first time that potential interference with military radar has been behind rejection of wind farm planning permission. The long-running Aidu wind farm case is one such example.

The defense ministry has also chosen two locations in Ida-Viru County which would host more state-of-the-art radar which, it is reported, would allow better co-existence with wind energy.

The latter is a burgeoning area; the Paldiski wind farm is owned by state firm Eesti Energia, following the 2018 takeover of the company which erected it.

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