Finance minister: I cannot understand SDE's fixation with offshore wind

There is no point in looking for culprits in the failure of the government's energy plan, said Minister of Finance Jürgen Ligi (Reform). However, he expressed his frustration with the actions of the Social Democratic Party, which he believes are obstructing the development of the energy plan.
"In the previous government, renewable energy was discussed in a technology-neutral manner — meaning no distinction was made between whether the energy came from offshore or onshore sources; instead, the focus was on availability and cost. At the time, the Social Democrats opposed this approach because they preferred offshore wind energy — and now, the same situation is repeating. We (Reform Party – ed.) are not fixated on this issue," Ligi said.
"But this is not a partisan matter. In that sense, we are free to discuss it. We have not made any backroom deals, like, 'Hey, let's only talk about this.' No, we have open discussions," Ligi added.
Ligi said there are aspects that should be better explained to the public. "Criticizing the government, as some headlines do, does not always present the full picture. One important issue is state aid — we have an existing state aid permit that is about to expire. Applying for a new permit takes time, which is why swift action was necessary," Ligi explained.
"The current state aid permit was granted in the context of the war in Ukraine, but the new permit will have to be applied for under different conditions, which we do not yet know in full. In the meantime, new ideas have emerged, such as indexation and other aspects, so these discussions have been logical," Ligi said.
Regarding lobbyists and sponsors in the energy sector, Ligi stated that he had no information to share.
"Of course, journalists are free to ask these questions," the justice minister remarked.
Estonia in a rush with its energy transition
Ligi did not directly answer the question of whether it is possible to build onshore wind farms entirely without subsidies.
"The fact is that, in recent times, market-based tenders alone have not been sufficient to achieve the energy transition — they do not bring the necessary change. At the same time, this transition is urgent. It is not reasonable to go back to debating Russian gas or which despot is currently allied with whom. The focus should be on solutions. Efforts are being made to find ways to attract investments quickly," Ligi said.
Work on offshore wind farms will continue, Ligi confirmed, adding that there is no point in looking for culprits.
"The expiration of the state aid permit was the reason for our initial urgency. We missed the first opportunity, but now we are addressing it. I am not the minister responsible for this sector, but I can assure you that no abrupt policy shift has taken place. And blaming specific ministers will not help. These discussions are always complex, with each party having its own stance. The result is often that someone feels the need to point fingers, claiming that mistakes were made or that someone lied," Ligi explained.
"There have been no such cases in this government, but I have the impression that they did occur in the previous one. Perhaps achieving technological neutrality was obstructed, but since I was not part of that government, I cannot say for certain why that was the case," Ligi said.
"There is no point in looking for culprits," he reiterated.
Plan was opposed in the previous government
According to Ligi, the government has reason to be frustrated with the Social Democrats, but it is up to Prime Minister Kristen Michal (Reform) to decide whether they should be removed from the coalition.
"The political landscape is very complex and has become extremely populist. Parties shift their positions depending on where they are seated," Ligi said.
"The scope of this debate extends beyond Climate Minister Yoko Alender (Reform). Responsibility does not lie with the person handling the matter; to me, taking responsibility means that those who created the obstacles should be held accountable. In the previous government, the plan was blocked, and those who blocked it should explain why they did so and how it could have been done differently. In the government, I would rather not share my impressions or speculations — but I do have them," Ligi said.
Government has a plan for energy
Ligi declined to comment on what took place in the cabinet, including the position of Minister of the Interior Lauri Läänemets (SDE).
"There are no extraordinary situations in the cabinet — these are simply work meetings that do not make it in front of the cameras. Läänemets spoke a lot, but I could not quite grasp where he was steering the discussion. It seemed like the goal was to conclude that we lack an energy plan. However, that is not true," Ligi said.
Ligi stated that the government has the option to announce a tender for onshore wind farms — unless it gets blocked again.
"We can also then apply for a new state aid permit, whose conditions can be reviewed. During this process, there may also be an opportunity to create more favorable conditions for consumers," the minister explained.
Ligi also noted that a document from the European Commission had been introduced to the government.
"It resembles a directive, but since the presentation was brief, it was not possible to examine everything in detail. A list of various topics under discussion was presented. Under the framework of the current state aid permit, the project moved very quickly, but the conflict disrupted the process. A new state aid permit will definitely be applied for. Offshore wind energy is not disappearing from the energy balance, nor are onshore wind projects being scrapped," the minister said.
"I don't believe that any future government would make such a decision — no one is that foolish," Ligi
Investors being consulted
"The discussion on indexation is ongoing with market participants. I can say that when the government's decision was announced on Thursday, it was a major disappointment for a foreign partner working with Eesti Energia on a wind farm project," Ligi said.
Ligi emphasized that investors are the primary market participants being consulted and the goal is to ensure a stable investment environment.
"This topic is, of course, being discussed with market participants. As far as I know, the idea of indexation came from them — the concept is to link renewable energy fees to inflation. The upper limit on subsidies remains in place, as we agreed. Secondly, inflation is not tied to any specific index, such as the consumer price index. So, the discussion has been substantive and it is certainly not centered around just one company, like Utilitas. That said, it does not mean that certain firms haven't tried to push their own ideas forward," Ligi explained.
Ligi noted that the Japanese company Sumitomo, which signed an agreement with Enefit Green to acquire a 50 percent stake in the Liivi Bay wind farm, would slow down its involvement if there is no state support.
On Thursday, the government announced its decision not to provide up to €2.6 billion in support for the construction of an offshore wind farm. As a result, the state aid permit granted to Estonia for offshore wind support will expire in April, meaning no offshore wind farms can be developed under that framework.
The government plans to proceed with the onshore wind farm support measure as initially planned, allocating up to €240 million to bring an additional two terawatt-hours to the market. The tender is expected to take place in April.
Meanwhile, the Ministry of Climate is moving forward with proposals for establishing a nuclear power plant, drafting legislation and initiating a special national plan.
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Editor: Mari Peegel, Marcus Turovski