ESTONIA: Baltic Energy Market News Flash 5th Edition

03.05.2024 ESTONIA: Baltic Energy Market News Flash 5th Edition

Energy news in Estonia

WIND

  • In June 2023, Estonia’s first wind and solar hybrid park Purtse (with the possibility of adding energy storage), developed by Enefit Green, was opened. It is the first large-scale wind park to be opened in Estonia in many years.
  • In July 2023, Enefit Green laid the cornerstone for the Baltics' most powerful renewable energy production area, Sopi-Tootsi onshore wind farm, where production is planned to commence at the end of 2024 (capacity is expected to be 680 GWh). The project is co-financed by the European Investment Bank.
  • The joint offshore wind farm project Elwind in Estonia and Latvia received a positive response from the European Union for its funding application to conduct environmental impact assessment studies – CINEA will allocate EUR 18.8 million. In March, the Consumer Protection and Technical Regulatory Authority (CPTRA) initiated superficies licence proceedings and environmental impact assessment. And the first public procurements (bird study, EIA programme) are being carried out.
  • On 7 November, the CPTRA announced two tenders for the development of offshore wind farms in the Liivi 1 and Liivi 2 sea areas. The planned capacity of the proposed wind farm is in the range of 770-1525 MW for Liivi 1 area and in the range of 990-2150 MW for Liivi 2 area. Both sites were awarded to Ignitis who cooperates with Copenhagen Infrastructure Partners (CIP). Additional offshore sea areas are expected to be opened up for tender in 2024.
  • The special Innovation Area in the Estonian marine spatial plan is primarily intended for floating foundation wind turbine. An auction for the Innovation area is planned to be announced in Q1 of 2024. Currently, there are 4 competing applications. The CPTRA qualified all four companies that submitted the applications to participate in the auction: Aker Offshore Wind Europe GmbH, Respect Energy Holding S.A, UAB "Ignitis renewables projektai 6", and OÜ Utilitas Wind. With the Environmental Charges Act that came into effect on 1 July 2023, it has now been established that 1% of the revenue from electricity generation goes to local municipalities near onshore wind farms.
  • A total of 1070 gigawatt-hours of renewable energy production bids were submitted for the state-organized and Elering-conducted renewable electricity production underbidding. The goal of the underbidding is to bring to the market a range of 650 gigawatt-hours of renewable electricity, of which at least half must be produced in the first and fourth quarters. The total amount of additional energy produced as a result of the tender is 780 GWh/a. The winners of the tender are Enefit Green AS, Evecon Püssi OÜ, Tuulepealne maa OÜ, Vihtra Tuulepark OÜ, Enery Estonia OÜ. Successful bidders must start production no later than 1 July 2027.

 

HYDROGEN

  • In January 2023, the Environmental Investment Centre opened a call for proposals for the development of pilot projects for the introduction of green hydrogen in the transport sector and as a feedstock for the chemical industry. There were 4 applications. According to the Estonian Hydrogen Association, the low interest in support measures is due to the fact that the kilogram price of the produced green hydrogen becomes too high due to small consumption volumes. Environmental Investment Centre plans to announce a new application round which is aimed at the transport sector.
  • Estonian Energy plans to establish two hydrogen and gas-operated power plants in the coming years to cover peak power demand. The preliminary choices for producing hydrogen are Iru and Narva, with Ida-Viru County identified as the most favourable location for hydrogen usage.
  • In October 2023, a hydrogen bus was tested in urban transport in Tallinn. According to Tallinn City Transport Ltd (TLT), hydrogen buses could potentially become more widespread on city streets in five to seven years.

 

BIOGAS, LNG

  • Several Estonian biogas plants have started expanding production. While biomethane is currently primarily produced from animal manure, the expansion of these plants is creating the capability to also utilize food waste. Eesti Gaas will be the first to order gas from the Finnish LNG floating terminal. The first real gas supply is expected earliest in April 2024.
  • In October 2023, a grant round was opened to support investments in the valorisation of bioresources by companies and research and development institutions.
  • Tallinna Sadam has entered into a four-year agreement with the Estonian Stockpiling Agency to provide port services at the Pakri Peninsula Port in Paldiski. However, finding an operator for the Pakri Peninsula Port does not contribute to supply security, as delivering LNG through the port requires first renting a floating terminal, which still takes time.
  • The management fee of the Pakri Peninsula Port will affect future gas bills. Namely, the Ministry of the Environment has prepared a draft amendment to the Natural Gas Act, according to which the costs related to the berth quay of Pakri Peninsula Port will be covered by a surcharge imposed on gas consumers. The addition of administrative costs to the surcharge means an additional cost of 0.21 euros per megawatt-hour for the consumer. Currently, the surcharge is 0.4 euros per megawatt-hour.
  • Estonian Gas has tripled its LNG deliveries by the end of 2023 – instead of previous year's five ships, the company will bring at least 16 shiploads of LNG to the region this year. One shipload of gas constitutes approximately a quarter of Estonia's annual gas consumption.

SOLAR

  • In June 2023, Estonia’s first wind and solar hybrid park was opened. Enefit Green's Purtse wind and solar hybrid park is also the first large-scale wind park to be opened in Estonia in many years. The unique hybrid solution allows for increased production capacity by utilizing the same grid connection, and there is also the possibility of adding energy storage in the future.
  • Utilitas is building the Väo Energy Complex, featuring Tallinn's largest solar park with a capacity of 9.3 MW.

STORAGE

  • Estonian Investment Centre provided 5.2 million euros in funding for ten pilot energy storage projects. Utilitas Tallinn, Utilitas Estonia, Sunly Solar, Prategli Invest, Five Wind Energy, and Eesti Energia each received a grant to begin implementing renewable energy storage device projects across Estonia. Support was granted to three projects for the construction of storage devices to store heat produced from renewable energy sources. Seven projects for the storage of electricity from renewable sources received support, five of which will begin to store solar energy. Two projects will begin to store both solar and wind energy.

Reforms coming up:

As of November, the Draft Law Amending the Building Code and Other Laws, which is aimed at accelerating the introduction of renewable energy, has been sent to the Parliament for the first reading. 

  • The draft law establishes a new type of building permit for an offshore wind farm. The changes consolidate the requirements of three separate permit processes (building permit, water special use environmental permit, or water permit, and construction permit) into a single application.
  • Renewable energy projects impact the environment, and therefore, environmental impact assessment (EIA) plays a crucial role in the processing of projects. According to the draft law, several previously consecutive EIA activities will be conducted simultaneously, reducing the time required for these assessments.
  • The draft law also aims to speed up the approval process for key road projects in the Member States, aligning with the European directive on enhancing the Trans-European Transport Network (TEN-T). This involves creating a unified construction permit procedure framework to reduce administrative costs and accelerate the building of crucial connections for the EU.
  • The Government has introduced a plan to set out a fixed connection fee to the main grid (operated by the TSO) which is expected to be 44,000 euros/MVA.

 

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