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New law will stop building of new wind generators in Estonia

Estonian news - etea October 23, 2012

Baltic News Service, 23.10.2012

The new electricity market law being drafted at the Ministry of Economy and Communications would bar from the list of recipients of renewable energy support almost all of the new wind farms currently in the development stage in Estonia and would effectively put an end to the construction of new generators, the Estonian Wind Power Association says.

The association’s spokesman Alan Senkel said in a press release that under the bill renewable energy support would be ensured only for producers who as of July 15 this year either held a construction permit for putting up a generating device or had an agreement with the Environmental Investment Center on the latter’s involvement in the project as co-financer.

“The bill serves exclusively the owners of the companies that are producing electricity already and effectively rules out the establishment of new wind power stations in Estonia,” said Senkel.

“The saddest thing is that effectively one will have to write off the investments made by entrepreneurs in several wind farms that are in the preparation phase.”

Accusing the ministry of neglecting the opinion of market participants, the association stressed that the purpose of renewable energy support was not to pay extra money for energy produced using renewable sources but to help invest into the establishment of new production capacities.

“The bill should be changed in such manner that renewable energy support would be ensured for all producers of renewable energy who had concluded a connection agreement with the transmission system operator by July 15, 2012 at the latest,” the industry body said.

By the agreement with the transmission system operator Elering, the companies building wind farms assume very big obligations and meeting these obligations requires big investments already before the construction phase of the project begins, it said.

For an individual wind farm in the phase of development, the fee for linking up to the power system is 10 million euros exclusive of VAT, 20 percent of which has to be paid after signing the agreement and 50 percent before the transmission system operator starts work to establish the supply point. “It is evident from the above that the party building a wind farm has to incur absolutely real, large-scale expenses significantly earlier than erecting of the generators starts,” Senkel said.

He said the Estonian Wind Power Association brings together wind energy producers and developers and its members represent 77 percent of Estonia’s functioning capacities and capacities under construction, in all 1,560 megawatts.

 

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