Latest renewables procurement process effectively only open to new players

Wind turbines in Estonia.
Wind turbines in Estonia. Source: Siim Lõvi /ERR

A new renewable energy tender process only pertains to electricity generation equipment to be newly installed in the vicinity of existing such facilities. In practice this may mean that only newcomers to the market can take part.

The government-organized procurement process is set to bring around 650GWh of green electricity to market

Previously, the state had mulled permitting allowing existing producers, including Enefit Green and Utilitas, to take part in the renewables procurement round via their existing or under-development projects.

However, a meeting with stakeholders at the Ministry of Economic Affairs and Communications held earlier this week established the principle that renewable electricity must be produced by a new production device, or by a new generation installation built next to an existing production device, in order to be eligible for the tender.

Economic affairs and communications minister Riina Sikkut (SDE) told ERR that: "Support from the state here must engender a stimulating effect, to enable us to add new capacities more rapidly."

The quantities constitute the largest supply of renewable energy in Estonia to date, as noted at 650GWh.

Parameters have been set at €12 per MWh, with a guaranteed sales revenue of €45 per MWh and a support ceiling of €20 per MWh.

Priit Lepasepp, board chair at Sunly, which develops solar and wind farms, said that the wording of the ministry's draft has changed to the extent that only those wind farms that have not yet started operation can participate.

Lepasepp said: "For the most part, this is similar to the previous auctions that have been carried out. A requirement that 50 percent of the production takes place in the first and fourth quarter is also in place."

Lepasepp added that this latter requirement relates to the renewables auctions needing to be tech-neutral, which is difficult to regulate. Both wind and, naturally, solar energy generation, tend to be in short supply in the winter.

The subsidy is based on the state assuming that a producer's revenue, including that subsidy, does not exceed €45 per MWh in any hour, on the day-ahead Estonia area electricity market exchange.

The government has set a goal of bringing the share of renewable electricity in Estonia to one hundred percent by 2030. 

According to consumption forecasts, the country needs to produce at least 9.4 TWh of green electricity per year to achieve this outcome.

The 2021 figure for renewable-source electricity stood at 2.88 TWh, accounting for 29 percent of total electricity consumption in Estonia that year.

The tender winners must start producing renewable energy by or in mid-2027.


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Editor: Andrew Whyte, Karin Koppel

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