Ministry official: Estonia's renewable energy target for 2030 not changing

Despite a downward revision of the electricity consumption forecast and concerns over whether planned wind farm developments will be completed on schedule, Estonia is not abandoning its renewable energy target for 2030, said Climate Ministry deputy secretary general Jaanus Uiga.
Monday's coalition deal, which included the decision to organize reverse auctions for 2 terawatt-hours (TWh) of production each for offshore and onshore wind farms, was based on a forecast by Estonian transmission system operator (TSO) Elering predicting that the country's consumption would likely be capped at 11 TWh.
Previously, a Ministry of Climate forecast predicted that Estonia's electricity consumption would grow from the current 8 TWh to 15 TWh by 2035.
The volume of the reverse auction for onshore wind farms was revised downward as well, with the Reform Party-Eesti 200-Social Democratic Party (SDE) coalition agreeing to 2 TWh instead of the previously planned 4 TWh.
In an appearance on Vikerraadio's "Uudis+" on Tuesday, Uiga explained that this aligns with previous plans, as the volume of reverse auctions for offshore wind farms has remained unchanged at 2 TWh, and reverse auctions for onshore wind farms had been planned to be announced in stages anyway.
"Offshore wind will have a 2 TWh reverse auction to minimize the potential impact on the renewable energy charge," he noted.
The deputy secretary general explained that Monday's decisions were based on the current understanding of the status of onshore wind farm development plans, on which of them may be completed by 2030 as well as on Estonia's electricity consumption needs.
He emphasized, however, that there are no plans to change Estonia's target of producing as much renewable energy in Estonia by 2030 as it consumes.
"This target is written into the law, and it remains in effect," Uiga said. "And I certainly believe it will be achieved. Achieving it will require a lot of work, first and foremost with development plans. Reverse auctions will be announced in 2025, and that will certainly be a major step toward achieving this target."
Consumption revised down, impact on renewable energy charge revised up
The previously issued joint forecast issued by the Climate Ministry and the Estonian Business and Innovation Agency (EISA) predicted that Estonia's electricity consumption would grow to 15.4 TWh by 2035, based on which it was calculated that the renewable energy charge would not increase by more than 1.3 cents per kilowatt-hour (KWh).
While Monday's decisions were based on Elering's forecast 11 TWh instead, Uiga noted that this forecast may be revised as well, as plans to bring "new clean industries" to Estonia begin to take shape and be implemented.
Since the revised consumption forecast also means a greater impact on the renewable energy charge, new calculations suggest that the renewable energy charge could rise by 1.5 cents per KWh.
"These are the numbers we're currently working with," Uiga explained. "Once we have a more exact understanding regarding consumption volumes as well as payouts, that will be refined. To ensure that payouts to renewable energy producers are capped, we'll use price corridors in the reverse auctions. Onshore, this will be lower; for offshore wind, it will be higher."
According to current plans, price corridors will be set at €20 per megawatt-hour (MWh) for onshore wind farms and €65 per MWh for offshore wind farms. This is the maximum support that would be paid out to producers if prices should fall below the threshold submitted by producers in the reverse auctions.
These price corridors mean that subsidies for offshore wind farms could cost €130 million a year. Given that the subsidy period for offshore wind farms is 20 years, the state could end up spending €2.6 billion on subsidies over that period.
"If the price of electricity doesn't fall as much, then it will be lower," the ministry official noted. "If it does, then that will become a reality."
For onshore wind farms, the subsidy period has been set at 12 years.
Uiga added that subsidies will only be paid if electricity prices are positive. If the price should fall below zero, which occasionally happens, then no subsidy will be paid.
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Editor: Marko Tooming, Aili Vahtla