Michal was asked about the offshore wind farm subsidy plan, and why the government wants to procure two terawatt-hours (TWh) of output from offshore wind farms for the next four years.

"Today's high electricity prices perfectly illustrate where we would be if we do not build new generation capacity. And if we currently have this perception that if we act very quickly we will have a nuclear power plant in 15 to 20 years, then what do we do in the meantime? We need something that is cheaper and cleaner," Michal said.

"Onshore parks are the most favorable when it comes to wind, that's clear. But it's worth just going around Estonia and seeing how things are going with these onshore parks. Somehow they are not. And if we want to get the capacity we need for the economy, we probably need an offshore park. In order to get some technology, because we are not only competing domestically and between two types of technology, we also need to create a form of reverse auction," Michal said.

The prime minister stressed that if the state does not create cheaper capacities in the meantime, Estonia could wait until 20 years from now for a nuclear power plant at a cheaper price, but it will still be necessary to pay today's price first.

Michal said he was under no illusions that there would be no protests against offshore wind farms. However, he also pointed out that it is necessary to distinguish between two different groups who may be opposed to their development.

"If a person has a legitimate concern, they live somewhere, and have been told they want to build something on their property, then that person ought to get the surveys, should get the answers and has to be given an honest debate. But that debate and that honest discussion is being spoiled by people who turn up in big cars, who fill up the place, who threaten local officials and people and then drive off. That's not how a local person can have a normal debate," Michal said.

Difference between onshore and offshore wind

The show's host put it to the prime minister that for onshore wind farms producing two terawatt-hours of electricity per year, the state is ready to guarantee €240 million from the pockets of electricity consumers, while for offshore wind farms producing two terawatt-hours of electricity per year, the government is ready to guarantee €2.6 billion from the pockets of consumers.

An offshore park will provide more generation during hours when there is a low amount of wind but why is it worth paying ten times the amount in subsidies, the prime minister was asked.

"Onshore wind has certain capacities and certain characteristics, while marine parks are different. Also, for example, on days when there is less wind on land, there is more at sea. They are different. I myself am also more on the rational side when it comes to the economy, which says that our job should be to get the cheapest possible energy at the best possible price. But the fact is that today, if you want to get that capacity, we have no outline of it that states all we have to do is build the onshore parks and wait for a nuclear plant in the future. If we rely on nuclear plants in the interim, the price will be significantly more expensive, if we rely on shale plants, it will be even more expensive," the prime minister replied.

"If we want a more favorable price, to bring the price down by that amount, the total cost to the Estonian economy is around €5 billion. And if it's a €5 billion gain and you pay up to €2.6 billion for it, you're still coming out on the positive side."

Michal: Final price calculations are available

Michal told ERR at the end of January that the calculations on the basis of which the coalition leaders made the political decision to support offshore wind farms and what the final price of electricity would be, would have to be requested from the Ministry of Climate.

Michal also reiterated on Tuesday that the climate ministry has the relevant calculations available. "The Ministry if Climate has made these calculations together with Elering using data from the large auditing company Aurora and the Technical University. In my opinion, these are all reliable parties. And secondly, these price calculations have already been published on the ERR portal. So if you want to, you can look at the price calculations there, and I am sure that the Minister of Climate will also be able to share these calculations," Michal said.

However, it was pointed out to the prime minister that the ERR portal had simply published a table of prices, but without any formulas and calculations showing how different figures were reached.

"These pricing models have been created by energy engineers from the Ministry of Climate, Elering, Tallinn University of Technology (TalTech) and the auditing company Aurora. They will certainly be able to provide this data," Michal said.

"In general, if we look at how much of the Estonian economy's different input prices are affected by electricity, it is about two percent of the cost of doing business. So ,it is a part of the cost, but certainly not the most important," Michal added.

"The government has had this information. In the Economic Affairs Committee, over the years, I have seen these various calculations. The calculations are quite large, quite approximate, but they still show some sort of direction and the facts in themselves confirm that these calculations are probably more or less appropriate, because if you look at the price of energy in real terms, when there is no wind, electricity from fossil fuels is more expensive," Michal said.

"The government has had this information. In the Economic Affairs Committee, over the years, I have seen these various calculations. The calculations are quite large, quite approximate, but they still show some sort of direction and the facts in themselves confirm that these calculations are probably more or less appropriate, because if you look at the price of energy in real terms, when there is no wind, electricity from fossil fuels is more expensive," Michal said.

Michal said that originally nobody ever thought the full amount, or €2.6 billion, ought to be compensated. "It has been the same all along in the original plans, which is why the amount has not changed, the volume to be compensated is essentially the same. But it is a reverse auction and the maximum amount in a case like this, if we get the price down by €5 billion below, we will pay €2.6 billion of it," Michal explained.

"So let's not dwell on this so-called magic of numbers," the prime minister said.

According to a projection by the Ministry of Climate, the final price of electricity should be 14.9 cents per kilowatt-hour (kWh) in 2035.

According to decisions on renewable energy endorsed by the leaders of the three coalition parties, the Estonian state has agreed to pay a total of €2.6 billion in subsidies to offshore wind farm developers.

The maximum subsidy is €65 per megawatt-hour (MWh).

---

Follow ERR News on Facebook and Twitter and never miss an update!