It has just added 7MW of wind capacity this year to its existing 142MW and projects due to go online in 2010 will lift the total to 235MW.
Estonia consumed 8TWh of electricity last year and that demand is expected to grow to 9TWh in 2016. Around 90% comes from plants burning shale oil. The country is to shut down or renovate 70% of this capacity over the next few years, creating an opportunity for Estonian wind developers.
According to the Estonian Wind Power Association, 292MW of wind power projects are expected to be built in 2011-13, raising total wind capacity to 527MW. More wind power is scheduled to come online in the years after 2014. The association expects the total to reach 4GW, with big offshore farms accounting for 2GW by the early 2020s.
But there are hurdles. The government sees less room for new capacity. Existing renewables plans call for 400MW of onshore wind and 500MW offshore by 2020, which should suffice to meet climate commitments. To contribute to EU 2020 goals, Estonia must increase the share of renewables in final energy use from its present level of 18% to 25%.
The existing government support scheme predicts even less capacity - the fixed price of EUR0.0837/kWh only applies up to 600GWh of wind. That means only another 120MW of wind farms can at present count on receiving these higher prices. According to the largest Estonian developer, 4energia, only a price above EUR0.08/kWh enables a reasonable returns on investment.
Another bottleneck for wind energy is the Soviet-era grid, which requires substantial investment. These improvements will come first on an international level. The 650MW Estlink-2 cable is due to be built by 2013 by Estonian and Finnish companies, with EUR100 million in support from the EU. In a May report for Estonia's state-owned transmission grid operator, Elering, consultancy EA Energy found that with the Estlink-2 and the rebuilding of the rest of the system, up to 2.2GW of wind power capacity could be accommodated by Estonian power. Without new interconnections, that capacity decreases to 1.2GW.