Former Eesti Energia CEO: Best time to build offshore wind farms missed
Discussions in the government on how to make energy production cleaner should be based on accurate data, according to Hando Sutter, CEO of the Estonian Employers' Confederation. Speaking on the "Esimene stuudio" program, he said that it is unreasonable to assume that electricity consumption will double by 2035 if prices remain high. Sutter also noted that Estonia has missed the ideal moment to begin constructing offshore wind farms.
The wind energy support plan proposed by the Ministry of Climate suggests that only if Estonia's electricity consumption doubles by 2035 will it be possible to pay the promised subsidy for offshore wind farms while keeping the final electricity price low and avoiding an increase in the renewable energy fee.
When asked what changes should be made in Estonia's energy sector, Hando Sutter, CEO of the Estonian Employers' Confederation, emphasized that government discussions on making energy production more environmentally friendly need to be based on accurate data.
"If we assume that our electricity consumption will double by 2035, while simultaneously making the final price significantly higher, I think such assumptions are not worth considering," Sutter said.
According to Sutter, electricity consumption in Estonia could reach the levels predicted by the ministry, but only if the price remains competitive. "In a situation where we make the final price much higher and expect consumption to increase, that's a violation of basic economic rules. Some of today's large consumers might even leave Estonia," he added.
Sutter noted that the current situation should be viewed and solved as a "trilemma," consisting of environmentally friendly electricity production, security of supply and affordability for the end consumer. He believes the latter component has been neglected.
"It seems that the goal is 100 percent green energy at any cost. This could prove too much for consumers, including businesses. If someone solves this trilemma better than us – like the Finns, Swedes or Lithuanians – then we won't be competitive," Sutter said.
"We need to place the price for the end consumer into context. We shouldn't just focus on technologies; we should do what is currently the most reasonable based on our knowledge of technologies. The focus should be on those that require the least, or hopefully no, subsidies and still meet our environmental expectations. And there are already quite a few options available today," he added.
Sutter also pointed out that while Estonia is detaching itself from Russian electricity, rapid-start power plants are necessary, but progress in this area has been slow. "We're talking about 100 percent green electricity, which also requires more balancing power. These corners of the trilemma should be viewed as a whole, not separately," he said.
Regarding offshore wind farms, Sutter noted that Lithuania is slightly ahead in this regional race, and their offshore wind farm will likely be completed before Estonia's. This means that local projects and the national plan to provide support for them have missed the optimal moment.
"Today, we've gone somewhat in the wrong direction, and maybe the best time to start building offshore wind farms has passed; perhaps a better moment will come. There are several reasons for this: one is that large projects in this region are difficult to finance, capital is expensive, and the Lithuanians have gotten the jump on us to some extent," Sutter concluded.
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Editor: Marko Tooming, Marcus Turovski