The likely outcome of the tender, Elering says, is the construction of several smaller, natural gas-powered electricity power stations, rather than one large one.

This is also part of Elering's strategy to secure grid stability as Estonia exits the Russian electricity system in February next year.

Frequency containment reserve, also known as frequency control reserve (FCR), is a mechanism used TSOs to keep the electricity grid stable and reliable.

Earlier this year, Elering had questioned the necessity of the Narva gas pipeline, though its use by a gas-fired power plant would justify investment; the TSO put long-term maintenance costs at €200 million.

To ensure clarity on connection costs for bidders, Elering extended the tender deadline by three months, moving it to mid-July next year.

This would, it is argued, allow time for the implementation of planned electricity market law amendments from the Ministry of Climate.

The total capacity of the tender comes to 500MW, with a minimum bid size of 25MW, which in turn can be aggregated from smaller units, hence the likelihood the winning bids will be for smaller power stations.

The technology-neutral nature of the tender means that any market participant meeting the requirements can submit a bid.

Erkki Sapp, Elering's board member for system management and markets, said: "It is highly likely that the outcome of the tender will result in several smaller power plants."

The tender aims to provide price certainty in the day-ahead frequency reserve market.

Elering is to sign a contract-for-difference with the winners, ensuring a set price for participants in the frequency reserve market.

In cases where the actual market price for frequency reserves is lower than the bid price, Elering will compensate the difference; if it is higher, the participant pays the difference to Elering.

Although the tender terms allow plants to begin operations the day after a contract is signed, time is still needed for construction.

Sapp noted that the completion timeline hinges on a developer's resources and chosen technologies, though the tender sets a maximum deadline of four years and ten months after contract signature.

Earlier this year it was reported that due to the ending of Russian gas supplies to Estonia, following the full-scale invasion of Ukraine, Elering was considering abandoning the gas pipelines to Narva and Värska, Ida-Viru County.

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