The Estonian government's decision to delay offshore wind energy auctions and cancel the €2.6 billion support plan, along with measures for the energy storage facility, has raised concerns among renewable energy developers and investors.
The reversal comes despite an initial commitment to large-scale wind projects, with officials now admitting that previous financial calculations were flawed.
Under the original plan, Estonia aimed to hold reverse auctions for 2 terawatt-hours (TWh) of wind energy production each for offshore and onshore projects, with price corridors set at €20 per megawatt-hour (MWh) for onshore and €65 per MWh for offshore. The subsidy period was intended to last 20 years for offshore wind farms and 12 years for onshore ones. Additionally, the state or transmission system operator, Elering, was set to support energy storage capacity development, including a specific measure for Energiasalv OÜ. A broader initiative to explore potential locations for a future nuclear power plant was also part of the plan.
The abrupt policy shift has raised concerns over investment stability, particularly after a major foreign investment deal in offshore wind was announced just a day before the cancellation. Businesses warn that delays and uncertainty could weaken Estonia's energy security, increase reliance on imports, and harm economic competitiveness. With the current EU state aid approval for offshore wind expiring in April, Estonia must either secure new approval or risk losing future support altogether.
Originally Published 28 March 2025
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