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Support could be paid to economically favorable new wind farms – Estonian minister

Uncategorized - eteap October 25, 2012

Baltic News Service, 25.10.2012

Renewable energy support for building new wind farms could be paid in Estonia in cases where a wind farm is economically the most favorable solution, Minister of Economy and Communications Juhan Parts said on Thursday.

Speaking at the government press conference, Parts said the bill of amendments to the Electricity Market Act with received the government’s approval lists the parties that have a justified expectation to receive renewable energy support. These are producers which have completed their investment and whose generating capacity has started to work.

Besides there is a certain category of projects already embarked on which have reached a phase where a justified expectation has emerged for renewable energy support, said the minister. “These are projects which are in a phase where they aren’t producing electricity yet but will start doing it next year, for instance, and their justified expectations have been taken into account,” Parts said.

The amendment would leave intact the criterion according to which the generating output eligible for subsidy for producers using wind as source of energy is 600 GWh per year. “I hope that this change that took place in the government is acceptable to producers of wind energy too,” the minister said.

Prime Minister Andrus Ansip said at the same press conference that if new wind generators require additional renewable energy support, or subsidy, it isn’t worthwile to build them. “The consumer does not agree to buy so expensive electricity and the taxpayer does not agree to subsidize that electricity from the budget,” Ansip said.

In the words of the prime minister, the government aims to meet the commitments taken for the period until 2020 but does not intend to overperform on these commitments a lot, because the consumer is not able to pay for it. Wind energy is considerable more expensive now than electricity produced using oil shale, said the head of government.

Ansip said the obligation valid for oil shale powered electricity producers from the new year to buy carbon emission credits will make electricity considerably more expensive for consumers. “We cannot permit that price increase to be much bigger because of renewable energy produced in addition to our commitments.”

Parts said the government wants to support investments in renewable energy at the consumer’s expense by as much as is necessary to meet the goals set by the state and abide by European agreements.

Hed said the government would be ready to support the establishment of new wind generating capacities at the expense of consumers in the future if a wind farm was the most favorable option and international obligations required it.

“If we take now the wind farms that have not started to work yet, which have a justified expectation, we do not really see new wind generators that could potentially qualify for that support, unless they are economically more favorable than other options,” Parts said.

Under the bill, the government would draw up an interim report in 2016 to enable producers to come to the market with the kinds of renewable energy that are the most favorable. Looking at the present prices, and large-scale production, the most favorable is using biomass for the production of electricity and heat, said Parts.

Parts said it was spoken about a lot that wind energy is about to become competitive on its own almost without subsidies thanks to the development of technology. This, he said, cannot be ruled out.

Another thing that comes into play is the trading system in so- called green certificates that is now being implemented in the EU. “If I put up a wind generator in Estonia, and some other EU member state which does not have as much renewable energy resource is interested in that green energy, that country would pay the money necessary for the investment to materialize,” said Parts.

Under that pattern the green energy thus produced would become part of the green energy balance of the other country. “This is not at all something that is just theoretical, several negotiations are going on on that in which Estonian companies are involved,” said Parts.


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