Do you wish to invest in Estonia’s next Energy success stories? Use our 1:1 e-Consultingservice to get started.
Grid independence means little without the capacity to balance it — and Estonia is now building that capacity with domestic capital. According to the press-release, Estonian companies Diotech OÜ and Transcom AS have begun construction on a 100 MW / 200 MWh battery energy storage system (BESS) in Tsirguliina, Valga County.
Dubbed Project Zirgu, it is the largest battery energy storage facility to be developed with entirely Estonian capital, and its first phase is scheduled for completion by March 2027.
The project addresses a structural problem common to electricity markets with rapidly growing renewable energy capacity: supply and demand on the grid are increasingly mismatched. Solar and wind generation fluctuates by nature, and without large-scale storage to absorb surpluses and release power during shortfalls, prices swing sharply — spiking when supply is short and turning negative when it floods the market.
Both outcomes are costly: consumers bear the brunt of price spikes, whilst renewable energy producers see their business models undermined by zero and negative prices. According to project lead Mart Moora, large-scale battery storage can begin reducing this volatility within one to two years — faster than most other infrastructure investments.
Big ambitions of a compact market
The site in Tsirguliina has already secured a high-voltage grid connection from Elering (Estonia’s transmission system operator), the necessary land plots, and all relevant construction permits. The initial investment — approximately €35M — has been funded entirely by the shareholders of Diotech and Transcom, with financing from an Estonian commercial bank also under consideration.
Diotech previously delivered what was at the time the largest battery plant in the Baltics for Eesti Energia, connected to the grid ahead of the Baltic states’ desynchronisation from the Russian electricity system in February 2025 — a milestone that required Estonia, Latvia, and Lithuania to shift from the Russian-controlled IPS/UPS grid to the European ENTSO-E network.
The Phase I facility will be built using LG Energy Solution technology, the same supplier Diotech is working with on a roughly 900 MWh project in Poland, currently Europe’s largest BESS under development.
Should market conditions warrant it, Zirgu’s infrastructure is designed for expansion to 200 MW / 800 MWh within six to nine months of Phase I completion — a scale that would make it the largest battery power plant in the Baltic region.
