State to make way for Estonian-Latvian offshore wind farm

Offshore wind farm. Photo is illustrative.
Offshore wind farm. Photo is illustrative. Source: Nicholas Doherty/Unsplash

The Ministry of Economic Affairs and Communications wants it written into law that if the state wants to develop an area suitable for a wind farm somewhere, previously submitted applications for building permits for the area will be rejected without review. Privately-owned energy company Utilitas says that in blocking them this way, the state would be violating the Constitution.

In spring 2020, Utilitas submitted building permit applications for the construction of a total of six wind farms, two of which would be located southwest of the Western Estonian island of Saaremaa, near Sõrve Peninsula.  By last fall, public authorities had figured out that part of the joint Estonian-Latvian ELWIND wind farm should be located in the same spot — off Sõrve Peninsula.

In December, the Environmental Investment Center (KIK) even briefly submitted a building permit application on the state's behalf, but withdrew it shortly thereafter. It wasn't going to start competing with a private company. On the second to last day of the year, however, a different solution was submitted to the Riigikogu.

Ahead of its second reading, a section was added to a bill of amendments to the Electricity Market Act and other laws stating that if the state submits an application for a building permit for a specific maritime area, the Consumer Protection and Technical Regulatory Authority (TTJA) will reject companies' previous applications for the same area without review.

"The purpose of this amendment is in a sense that the state as the owner of the maritime area can decide how to develop its own territories," Timo Tatar, deputy secretary general of the Ministry of Economic Affairs and Communications, explained to ERR. "This is a perfectly logical establishment of the state's right as owner."

OÜ Utilitas Wind board member Rene Tammist, however, cited a legal analysis commissioned by the company according to which the ministry's proposal is unconstitutional.

"There is a principle in law according to which no retroactive changes are imposed if they are disadvantageous to the parties concerning whom they are made," Tammist noted.

The second reading of the bill of amendments to the Electricity Market Act is scheduled to take place next week. As many proposed changes have been made, many of which would have an even greater impact than this one, the Economic Affairs Committee of the Riigikogu will likely request to suspend the second reading in order to discuss it for a few more weeks.

Official: Utilitas no more entitled to Sõrve than anyone else

According to Tatar, maritime planning was still underway in spring 2020, at the time Utilitas submitted its building permit applications. And everyone knew at the time that no applications would start to be processed until the planning process was complete. The maritime plan was adopted last May. But applications didn't start to be processed then either.

By that time, the entire potential development area had been covered by at least one, but often several building permit applications already, and it had become clear to the state that these areas need to be put up for auction.

"This Wild West period, where the first to plant their flag is now the owner of the land, is over," the ministry official said, stressing that the areas surrounding Sõrve Peninsula are in no way reserved for Utilitas.

"Other bidders will certainly show up there as well," he said. "Ultimately, whoever makes the best offer will get this area for themselves."

Tammist, however, said that it was precisely with competition in mind that Utilitas had prepared to develop that area. And all of this has cost money. "And all delays hindering this process are postponing it further," he added.

He called attention to the fact that it is likewise unknown when promised competitions are slated to even begin.

It wasn't until several months after the completion of the plan that Minister of Economic Affairs and Infrastructure Riina Sikkut (SDE) issued a draft regulation with competition conditions. The latest official comment regarding the draft, which was issued last August, dates back to September, but no one has heard anything more about it since.

Tatar acknowledged that the state's legislative process could stand to move more quickly.

"As the regulation was being drawn up, state lawyers recognized that the law would have to be amended before the competition could be announced," he explained. "And that is what we're currently waiting for."

The awaited change is one of several slated to be included in the current bill of amendments to the Electricity Market Act.


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Editor: Aili Vahtla

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