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Estonia

Estonia

Estonia sells carbon emission credits -- Kyoto JI wind project

One of the first Joint Implementation (JI) wind power projects under the Kyoto Protocol -- where income from sale of carbon emission reduction credits forms an essential part of the project's economics -- is going ahead in the Baltic state of Estonia after a deal with Finland. After years in planning, the Pakri Tuulepark 18.4 MW project became a reality last month after being bought by Norwegian company Vardar SA.

Under the JI agreement, the Finnish government is investing in the Pakri wind farm in order to acquire its greenhouse gas emission credit, which it will use to offset Finland's carbon emissions to help the country achieve its Kyoto Protocol commitment. The wind plant is expected to save 1.3 million tonnes of carbon dioxide emissions a year. The agreement foresees the sale of 500,000 tonnes of emissions credits to Finland during 2004-2012. The value of the deal is around EUR 2.5 million.

contract

The project was originally developed by AS Tuulepargid -- a subsidiary of Danish wind power developer Global Green Energy -- and will use Nordex wind turbines. Under a EUR 20 million turnkey contract, the German turbine maker will supply and install eight 2.3 MW turbines by the end of the year. "With this reference project we will be creating a good starting base for further Nordex projects in the region," says the company's Carsten Pedersen. AS Tuulepargid will oversee the development.

Located on the Paldiski Peninsula on the Gulf of Finland -- a closed military zone of the Soviet army until 1994 -- the wind farm will generate 56,000 MWh a year, supplying around 1% of Estonia's electricity and meeting a fifth of the government's target for 5.1% of power to come from renewables by 2010. State owned utility Eesti Energia is considering becoming a co-owner of the wind plant, confirms Vardar's Johannes Rauboti, who adds that a power purchase agreement has been signed with the utility.

"Vardar will also continue to consider other wind power projects in Estonia in the future," says Rauboti. These could include acquisition of two other wind projects planned by AS Tuulepargid for Estonia -- the 21.45 MW Türisalu and the 50.6 MW Paldiski wind farms -- which would bring Vardar's Estonian interests up to 90 MW. Türisalu is located at a former Soviet rocket base on the northern coast and is expected to use 1.65 MW turbines supplied by Vestas under a previous arrangement with NEG Micon, now merged with its former Danish rival. The Paldiski project is planned for an area near the city of Paldiski and close to the Pakri wind farm. Scheduled for commission in 2005, it will use 22, 2.3 MW turbines, although the turbine supplier is yet to be confirmed.

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