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Estonia’s emerging offshore wind tech innovation and manufacturing hub

Estonia is fast-tracking offshore wind farm projects with the aim of becoming the largest producer of wind energy per capita in the world.

Estonia has been a strong maritime country for centuries. Until now, the benefits of the large sea area have been mainly realised through the fishing industry and transport corridors, now the country is focusing on the next step forward: wind farms. Estonia has become a front-runner country alongside established key players like the Netherlands, Denmark and the United Kingdom.

The country aims to be a place where new technological solutions for offshore wind farms are developed, tested and manufactured. For this purpose, a unique laboratory on the sea will be created near Estonia’s largest island, Saaremaa. This offshore wind technologies innovation area can be used by companies from all around the world to test floating wind turbines, subsea stations and robots, service and maintenance drones, autonomous ships and other experimental R&D solutions.

But it doesn’t stop there. Recently, a would-be tender was announced that has already attracted interest from 30 companies planning to build offshore wind farms, and the government adopted a decision that by 2030, 100% of the electricity consumed in Estonia must come from renewable resources. To simplify the development process, Prime Minister Kaja Kallas has stated that Estonia is adopting an integrated planning permit for offshore wind farms. To meet all of the goals, the government is simplifying permit granting processes and shortening deadlines – projects of societal importance should be completed within three years. Integrated planning permits give the developers an opportunity to launch their project more quickly. Estonia has a grand goal of becoming the largest producer of wind energy per capita in the world.

The state wants offshore wind farms to be built as quickly as possible

Minister of Economic Affairs and Infrastructure Riina Sikkut says that the aim of making electricity consumed in Estonia 100% renewable by 2030 sends a clear message on behalf of the government to encourage investments in offshore windfarms on the shores of Estonia. Potential foreign investors have noted Estonia’s preferable wind conditions and
efficient business environment.

Offshore wind technologies are one of the critical focus areas in the development strategy “Estonia 2035”, which has been passed by the parliament and is updated by the government as the market conditions develop. To meet the newly set renewable electricity target for 2030, the state is taking a number of steps to achieve this goal. Firstly, there are tenders for renewable energy generation, a wind farm levy helps to break any possible obstacles, the grid’s readiness is being improved and the government’s goal is for cross-border projects to be finished in three years.

“Estonia’s vision is to cooperate with the countries in the Baltic region to create an energy network that would enable offshore wind farms to interconnect and thereby strengthen the connections between states,” minister Sikkut affirmed.

At the end of August, PM Kaja Kallas with colleagues from Latvia, Lithuania, Poland, Sweden, Germany, Finland and Denmark agreed to increase the current wind energy capacity of the Baltic Sea sevenfold by 2030.

Interest towards offshore wind farms has been notable in Estonia over the years. Minister Sikkut put a tender in place for these areas, some of which are overlapping. Tenders will be announced for these overlapping areas to ensure the best developer is picked.

“The state wants for these offshore wind farms to be built as quickly as possible. We are currently looking for every opportunity to speed up the procedural processes,” she added.

Unique testbed in the natural marine environment

Sikkut mentions that surveys have shown how local populations living in and around wind farms are positively tuned towards them. In order to achieve the objective set by the government and accelerate the transition to renewable energy, the parliament adopted a so-called Wind Farm Fee Act or wind farm levy earlier this year.

It sets forth financial compensation for locals and local governments that will also reduce any potential Not In My Back Yard (NIMBY) concerns. Business Development Manager at Estonian Investment Agency, Raido Lember also notes that Estonia has been through all NIMBY negotiations and the necessary agreements for operators are already in place.

To meet the state’s desired goal of becoming the largest producer of wind energy in the world per capita, Lember points out that offshore wind technology is one of the critical areas upon which Estonian research, innovation, and the business ecosystem will be focused for the next 13 years, based on the central strategy “TAIE 2035”.

A natural marine testbed is being established on the north coast of Saaremaa to develop new offshore wind farm technology.

An area of one hundred square kilometres can be used for any R&D related projects for floating or foundation-based wind farms by many companies at once. We are strategically planning a very innovative and large manufacturing base and innovation platform for new generation offshore wind technology solutions. All companies, researchers and engineers that are seeking to walk the walk and transform our energy industry technologies are welcomed to Estonia.

Foreign investors have used Estonia as a testbed and a development environment for decades. To name a few, Lember mentions Neo Performance Materials, which has Europe’s only significant rare earth elements laboratory and processing plant, and Enics that has produced turbine controllers for over a decade.

“With local universities, centres of excellence for energy systems and collaborative cleantech ecosystem, this value chain has solid ground in Estonia. Estonia’s strong vision to solve the global environmental challenges has made the country strategically opt to become one of the top GreenTech development regions in the world,” he added.

Port of Tallinn has started to build a new quay

In cooperation with the University of Tartu, Europe’s leading ultracapacitor energy storage company Skeleton Technologies has developed a wind turbine pitch control system based on their world class ultracapacitors, which are already used in the real world. Now the same team is developing something called Stargate Hydrogen. Simply put, their industrial scale hydrolysis is capable of taking the energy produced by wind farms and converting it to green hydrogen that can be transported all over the world.

The Port of Tallinn has also taken notice of the state’s grandiose offshore wind farm tender. But they are not sitting around and waiting for the paperwork to be finished. The biggest port authority in Estonia and an active player in the Baltic Sea region is already in the process of building a new quay in the Paldiski South Harbour to service wind farms. The new 310-metre quay with a 10-hectare area will cost around 53 million euros.

According to the chief commercial officer (CCO) Margus Vihman, preparations for the construction of the quay are on track for the quay and hinterland area to be completed in summer 2025. The quay is not only meant for service vessels, but as the project is co-financed by the European Commission through the military mobility project EstMilMob, the same quay will have a dual-purpose use as the main Seaport of Embarkation/Debarkation for the EU and NATO troops.

Vihman sees that given the port’s geographic location, the new quay will create preconditions for the Port of Tallinn to become an important partner in the construction and subsequent maintenance of offshore wind farms in the Baltic Sea region.

“The new quay will ensure the capacity of the port to receive high-draft special-purpose vessels for the construction of offshore wind farms and the transport of wind turbine components. The large rear area beyond the quay allows various preparations for the manufacture and storage of generators and wind turbine blades before being loaded on a ship. In addition, the new quay can be used to service ro-ro vessels if required,” he described.

The Port of Tallinn has already signed a Memorandum of Understanding with three European wind farm builders to establish a construction and maintenance port for offshore wind farms of the neighbouring region (North-West of Estonia) in the Paldiski South Harbour. The wind farms to be built in the area plan to start production in 2028, preceded by a 3-year construction period of the wind farms.

After the offshore wind farms have been erected they need a service port to help maintain them. The aforementioned port could be one of them, but for farms located around the two biggest islands Saaremaa and Hiiumaa the deep harbour of Saaremaa is also suitable.

Projects in the works

Terje Talv, CEO of the Estonian Wind Power Association (EWPA), helps to unite the needs and wishes of the companies active in the field under one roof with the mission to advance and develop the renewable energy sector at large. Talv sees that all association members are thinking about energy storage solutions and many of them are keen on green hydrogen.

To support companies in making investment decisions to increase renewable energy generation capacity, the state has been doing tenders for renewable energy generation, which gives a sense of security for the investors. Talv welcomes this but the EWPA is advocating for electricity minimum price to be set for renewables nevertheless. She believes this represents even more benefit for companies operating the farms, the investors as well as the consumer.

The state has started superficies licence procedures for three offshore wind farms being developed by Saare Wind Energy, Enefit Green and Utilitas Wind. These farms are set to open in 2028. These three projects have been the pioneers for offshore wind farms in Estonia. They have paved the way through the paperwork and regulatory process so that newly developed farms can start more smoothly.

Saare Wind Energy, founded in 2014, has been planning a major wind farm with 100 turbines with a capacity of up to 1,400 MW on the western coast of the country’s large western island of Saaremaa, with an estimated cost of several billion euros.

In October of 2020, the world’s leading marine and offshore services contractor company Van Oord acquired a 30% stake in Saare Wind Energy, which will help expedite the development of the project.

Additionally, to connect to the Estonian electricity grid, the Dutch company sees the project as an additional opportunity to interconnect across the Baltic Sea with Sweden and Latvia. The Estonian Investment Agency supported the initiative for this collaboration. According to board member Kuido Kartau, interest towards Saare Wind Energy came from Van Oord. “It’s great that we came together with Van Oord. They are one of four or five companies in the world that actually build offshore wind farms. In addition to building for other operators, they have decided to invest from an early stage in certain high-potential projects,” Kartau described.

By the end of this year, Kartau sees the Environmental Impact Assessments being finished and construction starting by 2026, but recent government decisions could speed the process substantially.

Saare Wind Energy has preferred local Saaremaa businesses as their partners from day one. If there aren’t relevant local businesses on the island they will expand the search to the whole of Estonia, then if needed, the rest of Europe. Saaremaa is, however, the home for electronics manufacturing Incap and state-of-the-art shipyard Baltic Workboats.

Every offshore wind farm needs routine maintenance that will be serviced by a local harbour also known as an operational maintenance base. Roomassaare harbour, just a stone’s throw away from the capital of Saaremaa and the Kuressaare airport, has been Saare Wind Energy’s partner in this capacity.

Roomassaare harbour’s director Renno Tammleht notes that the port is already hosting and servicing research and other preparation vessels for offshore wind farms. As they are the closest port with infrastructure such as shipbuilders, repairs, airport, hospital, hotels, and restaurants, they are currently expanding their quay sizes and industrial areas to further grow their capacity to support the future wind farms. They are open to negotiate a variety of support functions for wind farms in the region.

“We are interested in offering services to various customers as a support port for offshore wind farms. To meet the customer’s needs, we are open to expanding our harbour, deepening the water area and building a new quay,” he described.

Utilitas Wind is developing a grand plan for a farm consisting of a maximum of 160 windmills in the Gulf of Riga; their environmental impact assessment program was just recently sent to the regulatory authorities for publication. In parallel with his environmental studies, Member of the Board, Rene Tammist has initiated development-related activities such as pre-design, wind measurement, etc. He hopes the authorities will also move at a fast pace.

Utilitas is focusing on the installation of wind turbines. On a larger scale, Utilitas sees substantial potential to add storage devices to the energy system and is actively evaluating opportunities for development in this segment.

Utilitas is part of the Stargate Hydrogen project through company ownership. To facilitate the production of green hydrogen by offshore wind farms, Utilitas Group is already planning to build a green hydrogen production unit and supply infrastructure, which will be implemented by the end of 2024.

The head of Utilitas Group Priit Koit noted that it’s a great pleasure for the group to build the first hydrogen production, storage & fuelling infrastructure and introduce the first hydrogen vehicles at a large scale in Estonia.

Estonia has set a clear goal – to be amongst the top offshore wind tech innovation and manufacturing hubs in Europe. The local maritime areas, onshore infrastructure, innovation ecosystem and engineering talent are ready to add value amid the global energy transition.

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