Players pull out just as new law passes -- Estonia leads Baltic states

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The tantalising promise of the three Baltic states -- Estonia, Latvia and Lithuania -- remained largely out of reach of the wind industry last year, despite the good coastal wind resource, the region's need for more generation, and the need to reduce high levels of pollution from existing coal and oil generation, particularly in Estonia. Germany's Enercon, however, scored twice, putting up a single E66 1.8 MW turbine and 19.8 MW of its E40 600 kW machine in Latvia in a project for Veja-Parks 10-20, plus three Enercon E40 units in Estonia. Latvian wind capacity is now 22.8 MW, according to a report published by the European Bank for Reconstruction and Development, while Estonia has 2.2 MW according to Jaan Tepp of the Estonian Wind Power Association (EWPA).

Despite this modest success for the region, German project developer Ostwind is giving up in Estonia, at least for the time being, reporting that the political and legislative framework is just too tough. In Latvia, plans for a 100 MW wind farm for the south coast have also been shelved by Windforce Svenska while it waits for more favourable legislation. Windforce Svenska is the remains of Windforce Energy Development, a British company founded in 2001. Meantime Lithuania has just one turbine, a second hand 160 kW turbine bought from Denmark last year.

New wind tariff

Ostwind and Windforce may be giving up too soon on the Baltic states, however. On February 11, Estonia adopted a new renewable energy law stipulating a wind tariff of EUR 0.052/kWh for 12 years -- a marked improvement on the old tariff, set at 90% of the average price for which Navra Power sells electricity, EEK 0.0433/kWh (EUR 0.028/kWh). According to EWPA, the new tariff could pave the way for at least 42 MW of installations currently on hold in Estonia. It had recommended a tariff of EUR 0.061/kWh.

Latvia and Lithuania also have premium wind tariffs. Latvia's utilities are required to buy renewables generated electricity at twice the average electricity price for the first eight years of operation, after which the rate drops to the average market price, a low EUR 0.025/ kWh. Of the three Baltic states, Lithuania's tariff is the highest at EUR 0.064/kWh. It came into force in February 2002. Stasys Paulauskas of the Lithuanian wind energy association says foreign and local companies have plans to invest about EUR 600 million in wind energy in the country. The biggest single project under development is by NEG Micon, which may spend up to EUR 500 million on installation of 30-100 NEG Micon 2.75 MW turbines at a coastal site, says Paulauskas. A feasibility study is underway.

In Estonia, Danish company World Wide Wind is building a 20 MW station at Paldiski, while a 12 MW project for Keibu is in the development and permitting phase, reports Tepp. A second project for Paldiski, at 12 MW, is also being discussed, he says. Estonia has potential for 560 MW of wind generation without major grid work and a theoretical potential many times that, states EWPA.

The German government provided a grant of EUR 0.930 million towards the EUR 2.3 million cost of Estonia's three new Enercon turbines at Virtsu on the west coast. One of the turbines is owned by state energy utility Eesti Energia, the other two by the Saaremaa-based company Roheline Ring (Green Circle).

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