Last Friday, Minister of Climate Yoko Alender (Reform) submitted for a round of approval a bill establishing the grounds for reverse auctions that would provide wind energy producers with a price guarantee. In the letter of explanation accompanying the bill, the Ministry of Climate reiterates its plan to support the construction of onshore wind farms to the extent of an annual production capacity of 4 terawatt-hours (TWh) and offshore wind farms to the extent of an annual capacity of 2 TWh.

SDE leader and Minister of the Interior Lauri Läänemets recalled that this spring, the government had supported a slightly different mechanism – one in which the construction of both offshore and onshore wind farms would be supported to the extent of up to 4 TWh annual output.

"The Ministry of Climate has unilaterally changed this, without having presented it to the coalition," he said. "This coalition won't work well if everyone starts independently changing government decisions. This is a very serious matter, and deeply troubling for us. And I hope that at some point the minister will discuss this with the coalition partners."

In an appearance on Vikerraadio's "Reporteritund" last Tuesday, Ministry of Climate Secretary General Keit Kasemets said that despite the reduction in the support plan, the state is still expecting the same volume of wind farms. More specifically, the ministry hopes that the support measure will lead to the establishment of a 1,000 megawatt (MW) offshore wind farm with an annual output of 4 TWh of electricity.

"If we have an offshore wind farm with a capacity of 4 TWh, then the state will elicit this with a reverse auction for 2 TWh," Kasemets explained. "It will pay support for 50 percent of this [wind] farm's output, which is calculated to be consumed in Estonia as well. And then Estonian taxpayers won't pay for that."

Läänemets, however, doubts whether developers will be willing to build equally large wind farms under a more limited support scheme. "That may be one line of reasoning, but it isn't logical," he said.

"Key developers – I've spoken with Eesti Energia, for example, and their argument and concern is also that we may simply end up in a situatoin where offshore wind farms won't happen at all," he continued. "Because the point is, it makes no difference whether you build a 500 MW or 1,000 MW [wind farm] – certain costs will be the same. You have to rent ships; you have to set up a degree of manufacturing. And the smaller the wind farm, the higher the cost per megawatt. It may not pay off. And another issue is that developers probably wouldn't be able to secure financing from banks."

Läänemets has not said that the Social Democrats are fundamentally opposed to the Climate Ministry's new approach. What's key, he said, is which solution will lead to the lowest final price for consumers.

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