Estonia

Estonia

Market Status: Estonia, Lithuania and Latvia - Baltic states struggle to overcome hurdles

BALTIC STATES: The Baltic states all have ambitions to become significant wind markets, but all three face hurdles to realising their goal.

ESTONIA

Estonia added 64MW of new wind capacity in 2009, taking the country's cumulative total to 142MW. Wind power now supplies 2-3% of Estonia's electricity, putting about 172GWh of power into the grid in 2009.

The most recent government planning goals are for no more than 150MW of new capacity to be added in 2010. This will rise to 200MW annually until 2013, then 400MW each subsequent year through to 2020. Under EU law, the country must increase the share of renewables in its energy supply from 18% today to 25% by 2020.

But Estonia has some serious grid-capacity problems, a hangover from the Soviet era. This goes some way to explain why it has around 4GW of approved projects on the drawing board but not being built. Earlier this year, Estonia's stateowned transmission grid operator, Elering, launched a study with a Danish research company to find out how much wind energy capacity can be absorbed into the Estonian energy system. The results will be announced in May.

The industry received one boost last year when the government raised the cap on its support scheme for onshore wind power. From now on, the measure, which augments the price of wind power from wholesale prices to the sum of EUR0.0837/kWh, will apply to the first 600GWh, up from 400GWh previously.

"It is all moving in the right direction," says Tuuliki Lins, communications manager of the Estonian Wind Power Association. "The main bottleneck is really the grid."

LITHUANIA

In 2009, Lithuania's wind energy sector was the second-best performer in the Baltic nations, adding 21 new turbines worth 38MW. Total capacity rose from 54MW to 92MW, with wind power accounting for 12GWh of the country's 13TWh of total annual electricity generation.

In 2010, the Lithuanian Wind Power Association (LWEA) predicts that a maximum of 40MW could come online. Part of that will come from the 12MW Mockiai wind farm, which is scheduled to be finished in the third quarter of this year. It is developed by Vardar and Freenergy.

The projected increase means that the Lithuanian government is unlikely to reach the 200MW of installed capacity it had targeted as a milestone on the road towards its 2020 EU requirement of sourcing 23% of its energy from renewables.

One setback for Lithuania has been the scrapping of a plan to divide the country into four quadrants, with each quadrant assigned a quota of wind development and bids invited accordingly. Another complexity, says the LWEA, is that wind operators are able to ask Lithuania's energy and prices review committee to review the price they are paid for the energy they produce. Operators are already guaranteed EUR0.086/kWh, but some are asking for more, creating market uncertainty, says LWEA executive director Aleksandras Paulauskas.

But there are hopes that this year could see the publication of new rules by the government concerning wind and other renewables technologies development in Lithuania. They will be loosely modelled on Germany's renewable energy standard and will aim to help authorities respond to applications to develop wind, which until now have been handled differently from place to place in the absence of any guiding document.

LATVIA

Latvia was a poor performer again in 2009. At the end of 2008, it had 27MW online, generating less than 1% of the country's electricity. Last year, according to the Latvia Wind Energy Association (LWEA), just 1.5MW of capacity was added, bringing the total to just under 29MW.

And there are few signs that anything will change in 2010, with no new development as yet in the pipeline. Latvia's goal of having 600MW of wind online by 2020 is now seen as unrealistic, not least because the national grid is estimated to be able to accommodate 200MW of wind energy at most.

According to LWEA president Paulis Barons, EU goals specifying Latvia must source 40% of its energy from renewables by 2020 have begun to push the government to legislate better conditions for wind, and a legal renewable energy standard is in the early stages of preparation.

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