Opposition politicians appearing on ETV politics panel show “Esimene stuudio” Wednesday were critical of the climate ministry’s change of heart on support for wind energy in Estonia.
The ministry says it will be supporting offshore wind farm development to the tune of €200 million.
A ministry-published plan last October stated that the 2030 goal to obtain 100 percent of the country’s electricity via renewables can be met via onshore wind farms alone.
These wind farms would be supported in their construction by establishing price guarantees for electricity generation totaling Twh.
The price guarantee level would be determined by the lowest bidders, under the plan.
On Thursday of last week, however, the government instead approved a somewhat costlier solution.
This will see the price guarantee being given to lower bidders on a much larger production volume of 4+4 (ie. eight) Twh, part of which would be reserved towards the construction costs of offshore wind farms.
However, construction of these will prove more expensive for electricity consumers and for society than would onshore wind farms – customers would pay around €200 million per year more combined in the case of offshore wind farms, assuming an equivalence of output.
The coalition view
Minister of Climate Kristen Michal (Reform) told “Esimene stuudio” that currently electricity consumption in Estonia stands at about 8.3Twh per annum, but were this volume to rise to about 10-13 Twh in the future, the increased generation might be met by onshore wind farms.
However, the assessment of the Ministry of Economic Affairs and Communications and state agency the Estonian Business and Innovation Agency (EISA) is that the consumption will practically double to 16Twh, meaning onshore wind farms would not be able to meet this level.
According to Michal, not much has changed after the government’s recent decision, and ultimately the price of electricity will become cheaper to the consumer, in the future.
Michal said: “The idea carried over from the previous plan was that an additional supply would be organized up to 6 TWh. The current government decision allows for 8TWh, but with that comes an important clause for consumers whereby the support, the renewable energy fee, will be paid only up to the volume of domestic consumption. So this new plan is, from the consumer’s point of view, likely easier on the wallet.”
“Second, we evaluated all options, and it remains the case with the new plan that whereas today the average energy price stands at nine cents per Kwh, in the future it will be about 6.6 cents per Kwh,” he went on.
“This means that from the point of view of the consumer and society, savings of five billion euros will be made over 20 years. Two billion is approximately the amount of support,” Michal said, adding that the size of the renewable energy fee will not change.
“This is the goal of the activity – cheaper energy prices. This also saves money for the state and the nation and its society. Regardless of what numbers can be used here in the meantime, energy investments are substantial and diverse all the same, but the goal is a cheaper energy price and this will be the outcome.”
Also appearing on Wednesday’s “Esimene stuudio” was Toomas Uibo of Eesti 200, who called the government’s latest decision “a reasonable compromise.” It is important that onshore and offshore wind farms get equal opportunities to enter the market, he said.
Uibdo said: “Naturally everything is a compromise. If we separate things and distinguish between offshore and onshore wind farms, then we should also ensure that all get the same possibilities to enter the market.”
“If we are talking about offshore wind farms, then of course these investments are, first of all, much larger, while at the same time energy production is more voluminous compared with onshore wind farms. In my opinion, a compromise like this is highly reasonable and will provide opportunities to everyone to enter the market,” he went on.
Priit Lomp (SDE) said it may be overstating things in saying that the state would have to spend €200 million a year in support of offshore wind farms.
“I would dial it down a bit. Lithuania has applied to the EU for state aid to grant the same subsidy for a 700MW offshore wind farm, and they have received a maximum of €13 million per year in respect of those 700 MW. If we present this sum in our own calculations, then €200 million is clearly an exaggerated figure,” he said.
Lomp added that trust should be placed in experts engaged in renewable energy plans, who have said that it is most rational to combine different options.
Lomp said: “Even if it is difficult to believe politicians, here I have faith in Kalle Kilk, head of Elering, for example, who says that actually the cheapest and most reliable option for Estonia, for all entrepreneurs and the populace is if we combine solar and offshore wind farms and add storage, plus there are also natural gas facilities that can come to our aid in the most difficult moments. Experts have stated this, and I have no reason to doubt them.”
Opposition: Decision is not rational, and is in fact absurd and unjustified
The opposition is however critical of the government’s change of heart as outlined above
Kristjan Järvan (Isamaa) went so far as to call the government’s change of course harsh.
“With this auction, there is no rational justification that €200 million will be granted to offshore wind farms in a year. If you go to the electricity consumption growth forecasts, there again the Environment Agency (Keskkonnaagentuur) says that whereas there are currently 2,400MW-worth of onshore wind power currently under development and which cannot fit into our grid, then 1,000MW remains in in reserve, whereby onshore wind energy can be developed on state-owned land; twice as cheap as offshore wind, while of course it is particularly fast to set up,” Järvan said.
Järvan says the ministry made a mistake in its forecasting of consumption growth, adding that supporting offshore wind farms with a sum of €200 million per year equates to a hidden tax on the consumer.
“I’m afraid that where this forecast error or great optimism comes is that the EISA under the Ministry of Economy thinks that this is a one-dimensional forecast, that we just say that consumption will grow and that’s it. But actually there is a very important component as well what it costs and the quality of that electricity. Because as experts say, green energy poisons the grid, it’s low-quality electricity because it fluctuates so wildly that it knocks machines out of line. And now the most important thing is the price component that’s starting to emerge 200 million will be put on the consumer’s back again as a hidden tax,” said Järvan.
Rain Epler (EKRE), branded the government’s idea “absurd.”
“When a sentence begins with the fact that we bring you cheap electricity and ends with another fact that we have to spend a few hundred million a year to do so, then the sentence itself is absurd,” Epler, a former environment minister, said.
Oil shale electricity generation potential should not be extinguished in Estonia, at least in the next decade, Epler went on, adding there will likely be no longer term alternative to nuclear power. Wind and solar power should therefore not be given preferential treatment in their development, he said.
“On this we are talking about onshore, offshore, solar and wind power; no matter how much we carry out renewables, we have to somehow ensure the baseline. So if the members of the Reform Party in particular here tend to talk about engaging in renewables a lot, and the electricity intensive benefits this will bring to Estonia, then again the industrialist asks what type of electricity will I be able to generate when the wind doesn’t blow and the sun doesn’t shine.”
“That means that if you boost the energy you want to produce from the wind and the sun, you have to increase the baseline to the same extent. We will be building a dual system, one which will definitely be more expensive. I would leave wind and solar power, both offshore and onshore, aside and undeveloped, and instead opt for more practical means of electricity generation,” Epler continued.
Erki Savisaar (Center) said that the government’s revised plan has many question marks over it. He argued that while it is technically possible to produce the desired amount of electricity from renewable wind and solar sources, the question is whether it will in actuality work out cheaper for Estonia, whether it is a reasonable solution and whether society will accept it.
“I think that in the case of wind turbines, if we really start erecting them, we will immediately get mired in the analysis of how many birds are likely to fly into the blades and so on, and it will get debated endlessly, so these wind turbines will appear at an incredibly slow pace. We will not be able to maintain the pace here that the state expects,” Savisaar added.
“Second, if they are going to be installed out at sea, imagine a sea full of masts the dimensions of the TV tower,” he went on.
“They might work fine there for 30 years and won’t disturb the fish, but what happens then? Who will remove them from there? Who will eventually do the clean up when they’re no longer needed, when they’ve completed their life cycle? Where will the money come from for that?” he said.
In addition, Savisaar said, the power grid should be rebuilt. “Our network is built the reverse direction, running from east to west, but they want to put these turbines to the west,” meaning that whereas most electricity generation took place in Ida-Viru County, using has it has done oil shale, the offshore windfarms will overwhelmingly be off the west and northwest coasts.
“So the network has to be rebuilt,” Savisaar added.
According to Savisaar, in order to render electricity cheaper, green fees and network fees would need to be hiked.
“The price of electricity is made up of three components: Electricity produced by wind turbines, then the grid fee, plus the green fee. In order to make this electricity component half the price, or a little lower, we will have to up the green fees and the grid fees. But this is not viable or reasonable. We do have other options too.”
Comments are closed, but trackbacks and pingbacks are open.