Currently, renewable energy accounts for 31% of Estonia’s electricity consumption, a figure that is steadily rising. The nation’s wind energy sector, in particular, is experiencing remarkable growth, with projections indicating a doubling of wind power production by 2025 and a tripling by 2027. Additionally, ambitious plans for offshore wind farms are in the pipeline, expected to debut between 2030 and 2033. Likewise, solar power has undergone a remarkable transformation, catapulting from negligible levels in 2020 to a substantial 800 megawatts (MW), with plans to double this within the next six years. Estonia now proudly occupies 6th position in the EU in terms of solar power per capita.
Fuelling this optimism is the dramatic drop in technology prices within the renewable energy sector. Storage technology prices have plummeted eight-fold, while offshore wind technology costs have seen a three-fold reduction over the past decade. These cost reductions have significantly enhanced the feasibility and attractiveness of renewable energy investments.
To support its renewable energy ambitions, Estonia has earmarked 155 million euros for investments in electricity grids up to 2027. Furthermore, the country is on track to synchronise its grid with the European network by early 2025, ensuring seamless integration and collaboration within the broader European energy landscape.
Keit Kasemets, secretary general of the Ministry of Climate, expresses confidence in Estonia’s transition, stating, “We are in the final stages of the transformation in the electricity market. We used to fully rely on oil shale, which we are now phasing out in favour of renewable, storage, and other capacities.” Kasemets emphasises the government’s commitment to ensuring competitive electricity prices for consumers, aligning with the affordability of Nordic neighbours who boast the lowest electricity prices in Europe. In a study commissioned by the Ministry of Climate, Tallinn University of Technology assessed the impact of electric storage on electricity prices and found that building storage on a large scale would save Estonian consumers more than 30 million euros annually.
Estonia’s legislative framework underscores its commitment to renewable energy, with laws mandating that 100% of electricity consumption be sourced from renewables by 2030, alongside a target of 69% renewable energy for heating by the same year. With solar targets already met, the nation’s focus now shifts decisively towards expanding wind capacity. In total it’s expected that renewables will reach a 4525 MW capacity by 2030, out of which 2850 MW will be covered by onshore wind.
Anticipating a surge in demand, the government is preparing a policy for generation volumes constituting about 130% of current annual consumption. Efforts are underway to attract industry investments, leveraging the allure of affordable and green energy as a competitive advantage.
As renewable energy takes centre stage in Estonia’s energy landscape, the government is actively fostering innovation in storage technologies, with pilot support schemes and regulatory reforms aimed at creating an enabling environment for diverse storage solutions by 2025. One significant change is aimed at exempting electric storage systems from double taxation. In the future, the owner of a storage system will not have to pay renewable energy fees, electricity excise taxes, or grid transmission fees for electricity stored from the grid and returned to the grid within the same calendar month. This change reduces the costs of electric storage systems for storing and returning electricity to the grid, making the establishment of such systems profitable for entrepreneurs. The legislative changes also provide business and private customers with the opportunity to sell unused or saved electricity to the market.
With these initiatives, Estonia is poised to usher in an era of unprecedented renewable energy adoption, setting a compelling example for sustainable development on the global stage.
The biggest wind and solar farm in the Baltics is taking shape
The Sopi-Tootsi project, set to become the largest wind and solar farm in the Baltics, is rapidly taking shape in the Põhja-Pärnumaa municipality. Throughout the spring and summer nights of 2024, components for 38 wind turbines will be transported to the Sopi-Tootsi wind farm from the port of Paldiski. Additionally, 112 000 solar panels are being installed, with Enefit Green planning to begin the release of electricity into the Estonian grid by the end of the year. Once operational, the farm is expected to produce a significant 10% of Estonia’s current electricity consumption, totalling 770 gigawatt hours (GWh) of renewable electricity annually.
While the 80-metre-long rotor blades are transported nightly, the foundations have already been laid. According to Lauri Ulm, head of wind developments at Enefit Green, the farm’s connection to the grid will commence by early autumn, with production slated to begin by the year’s end. The Sopi-Tootsi farm is poised to double Estonia’s current renewable energy output.
Mayor Madis Koit of the Põhja-Pärnumaa municipality views the Sopi-Tootsi wind farm as a transformative milestone for the community: “The community’s response to the new wind farm has been overwhelmingly positive, recognising the significance of renewable energy in our region and the nation’s energy landscape.” Koit views the project as a valuable learning experience for future large-scale infrastructure endeavors, which he hopes will attract new investments to the region: “The construction of the Sopi-Tootsi wind farm opens up new development opportunities for Põhja-Pärnumaa and especially the Tootsi area. We already have a Swedish investor on board, ready to invest approximately 100 million euros, and we are actively seeking additional investors to establish a new business area in the Tootsi region.”
Lauri Ulm describes the cooperation with the local community as fruitful, citing the village’s industrial history: “Tootsi was founded a century ago around peat production, which ceased in 2012, coinciding with our wind farm planning. This transition symbolises the dawn of a new economic era.” Ulm anticipates that the construction phase will generate income for the local community, with long-term opportunities for employment in grounds maintenance and technician training. Moreover, the abundance of green energy is expected to attract further industrial investments, bolstering the community’s prosperity. In the immediate vicinity, the grid charge can be omitted for up to 20 MW – an extra incentive. Looking at the longer aims of Estonia, by 2030 each electron from the Estonian grid should come from a renewable source. For potential investors next to Sopi-Tootsi farm, this can be assured safely already from 2025.
The unique aspect of the Sopi-Tootsi project lies in its location on a depleted peat field and its collaboration with the Estonian State Forest Management Centre to restore bogs across an area of 100 hectares. The water management systems beneath the solar farm serve as a pilot project to mitigate carbon emissions from peat decomposition and promote biodiversity. Ulm envisions former peat fields and bogs as promising sites for future developments, requiring minimal interference with natural conditions.
Ulm highlights the resilience of combining wind and solar energy, making the farm more weatherproof and reliable. However, he acknowledges the need for backup solutions, such as gas power, under certain conditions. With increasing demand for electricity due to trends in electric vehicles and heating pumps, Ulm remains optimistic about Estonia’s prospects for large-scale offshore wind projects by 2030.
The wind farm’s construction is led by NOBE, Verston, and Connecto. Verston has completed 200 kilometres of ditches and constructed 33.5 kilometres of roads connecting the wind turbines, solar farm, and substation. NOBE has erected 34 of the 38 wind turbine foundations, using 3700 loads of concrete. Nordex, a leading wind turbine manufacturer, is responsible for manufacturing and installing the turbines. With a total investment of 350 million euros, Sopi-Tootsi stands as the largest and most powerful wind farm in the Baltics, both in terms of turbine count and capacity.
The groundbreaking Risti solar park
Sunly is an independent energy producer developing renewable energy projects in the Baltics and Poland. It also manages a renewable energy and electrification portfolio of startups in Estonia. The Risti 244 MW solar park marks the initial phase of a larger energy park developed by Sunly and Metsagrupp.
Priit Lepasepp, CEO of Sunly, what is the plan and ambition with Risti solar park?
We see Risti solar park as part of a larger plan. For us, this is the first major example of a hybrid park project, where different types of electricity generation and storage are located behind the same connection point. In the case of Risti park, it is deemed expedient to start with the construction of a solar park; for future Sunly energy parks, a wind park will most likely be built first, followed by other options to boost production and for storage. Risti solar panels will use trackers, meaning they will change their direction together with the sun’s movement. This will help to increase production, especially in morning and evening hours, when actual consumption is higher. Energy storage systems will allow us to use produced electricity in a more efficient way. Risti will be the biggest solar park in the Baltics.
What are the specific steps and goals within this year?
Construction of Risti photovoltaic park will begin in the second quarter of 2024. The expected completion time is in the first half of 2026. The cost of the solar park, which is being built by Sunly and Metsagrupp, is nearly 120 million euros. The park should work at full capacity at some point in 2026.
How have you succeeded in cooperating with the local community?
One of the central principles of how we develop and build wind and solar parks is by cooperating closely with the local communities. We are not trying to hide the fact that wind or solar parks will change the appearance of the area. The government of Estonia has set an ambitious goal for the country to use 100% renewable energy by 2030. This means it is not a question as to whether renewable energy will take over the old system, but rather how and who will create these possibilities. At the moment, communities can choose with whom they want to work. Sunly is committed to transparent communication, community involvement from the outset, and creating economic opportunities for locals, all while addressing various concerns about wind and solar park development. We build long-term, collaborative, and mutually beneficial relationships with local communities, which reinforces Sunly’s dedication to sustainable and inclusive practices. In Risti, Sunly will contribute a portion of the revenue from the solar park to the budget of the Risti borough, thereby supporting the development of the region. For example, at a rate of 50 euros per megawatt hour (MWh), the fee would be approximately 75 000 euros per year. Upon completion of the entire energy park, Sunly will offer the community more affordable electricity.
What have been the biggest hurdles?
Competition in the renewables sector is fierce and we don’t see that changing. This means we need to be very clever when planning new projects and constantly monitor what decisions governments in the Baltics and Poland are making. All companies dealing with renewables are challenged by a lack of experts in the sector, especially engineers. We are collaborating with universities in Estonia and also in Poland to encourage young people to finish their studies and pave the way in renewables.
What are your plans beyond Risti and Estonia?
Risti energy park is just one of our activities. We are also actively developing and building in Latvia, Lithuania, and Poland. We will also open a couple of smaller parks in Latvia this year and start the construction of bigger ones in Poland at the beginning of 2025. We are mapping possibilities to enter the wind market in Poland. If all goes well we should have the first turbines in Poland up in 2027.
At Sunly, our mission is to build sustainable and clean energy solutions in the Baltics and in Poland while thinking through the whole spectrum from development to consumption. The cost-effectiveness of renewable energy is undeniable, with its inevitable rise driven by continuous technological advancements. Solar and wind power are becoming increasingly price-competitive with traditional energy sources. We have set an ambitious goal to have 4.6 gigawatts (GW) of clean energy by 2030. Our work focuses on four key areas – solar power, wind power, energy storage, and innovation. We see lots of opportunities in Poland, but of course there is also lots of competition. In Poland, up to now, we have been mainly developing solar projects, but in the coming years we are planning to start with the first wind projects as well. Another important key aspect in how we operate is to develop the whole renewable energy ecosystem. Sunly has already invested 9.6 million euros into cleantech startups and we are planning to increase this amount. We cannot solve all of the current challenges of the sector, but we want to be close to those who have new ideas that could potentially serve everybody in the future.
Critics of solar power say that Estonia doesn’t have enough sunny days. What do you tell them?
Future renewable energy providers also have to be storage providers. This means we have all the energy we need even when the sun is not shining, or the wind is not blowing. We have already added storage opportunities to one of our parks, Pikkori solar park, and we are planning to do the same for other parks in the future as well. However, small-scale storage can’t cover it all. Investments are also needed for the development of large-scale storage opportunities, for example the Zero Terrain project in Paldiski.
Kuido Kartau: We can accomplish more with the sea than merely catching cheap sprats*
Kuido Kartau founded Saare Wind Energy (SWE) as a two-person company in 2014. He reminisces about how their ambitious plan for a billion-euro offshore wind park in the Baltic Sea seemed like a utopia at the time. Ten years later, SWE has forged a strong partnership with the experienced Dutch company Van Oord Offshore Wind BV and anticipates receiving the location permit in the coming months. The completion of the environmental impact assessment marks a significant milestone for a project of this magnitude. Currently, the company is in negotiations with potential new partners for closing the next funding round to progress to the next phase of development.
The confirmed location for the project is a 200 km2 area to the west of Estonia’s largest island, Saaremaa, capable of hosting up to 100 wind turbines with a capacity of up to 1400 MW. This production could meet roughly two-thirds of Estonia’s current energy consumption. Kartau acknowledges the ambitious nature of the plan but adds, “Today in Europe, no wind farm is planned to be smaller than 1000 MW.” Construction is slated to commence in 2027 at the earliest, by which time smaller projects will have become obsolete. Kartau estimates the total investment could reach 3–4 billion euros, citing the credibility of their budget estimates due to their partnership with Van Oord, a 154-year-old company specialising in offshore wind farm construction.
Kartau emphasises the significant impact of seabed geology on costs, noting, “We know from our research the type of foundations required and can thus estimate the cost.” Unlike the sandy seabed of the North Sea, the Baltic Sea presents more challenges.
According to Kartau, four aspects must align for the realisation of an offshore wind farm: permission, the grid, offtake, and supply chain. While permitting is commonly perceived as the main obstacle in Estonia, true challenges emerge thereafter. Kartau stresses the importance of aligning the project with a realistic timeline.
Regarding offtake, or consumption, Kartau notes Estonia’s reliance on energy imports and advocates for large-scale projects like theirs to address the shortfall. He sees the current government plan with CFD (Contract for Difference) as beneficial. However, Kartau believes government support should focus on ensuring cash flow security rather than direct subsidies.
Concerning the supply chain, Kartau highlights the disparity between political ambitions for wind farms in Europe and the insufficient construction capacity. He notes that the three main producers of offshore wind generators – Vestas, Siemens, and GE – produce only one model at a time, with sizes trending toward larger ones.
Despite the challenges, Kartau remains optimistic, suggesting the wind farm in Saaremaa could be operational by 2030–2032. He believes the project’s cornerstones – location, wind conditions, grid availability, and minimal ice – are solid. Moreover, local support has grown significantly, with the community recognising the project’s potential benefits. The Kuressaare vocational school on the island has launched a course for rotor maintenance specialists and is preparing to train other professions related to wind farms.
“The majority of the island’s residents see it as the opportunity of the century,” Kartau concludes. “Instead of merely catching cheap sprats, we can accomplish much more with the sea. And this is our opportunity.”
*Baltic herring and sprat are very tasty fish. We recommend trying different recipes and cooking methods.
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