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Estonian wind energy developer: Change in subsidies may result in damages claim

Estonian news - etea December 14, 2012

Baltic News Services, 14.12.2012

The Estonian wind energy developer Nelja Energia warned on Friday that the changes in the renewable energy support mechanism planned by the government may result in heavy damages claims against the state.

CEO Martin Kruus told BNS there is as yet no concrete decision to claim damages if the amendment takes effect but the probability of such a scenario is high. “In order to make such a decision, it is necessary to assess the real circumstances, which do not exist as of today,” he said.

Member of the supervisory board of Nelja Energia Hannes Tamjarv said the amendment to the electricity market law which the government sent to parliament violates an earlier compromise agreement between producers and the state and if passed as it stands would cause more than 30 million euros loss to wind energy companies alone.

The company recalled that the Renewable Energy Association and the Ministry of Economic Affairs and Communications agreed in the summer on new principles for the support mechanism for electricity produced from renewable sources.

The memorandum of understanding proposed to replace the fixed-size subsidy with a correlation between market prices and subsidy levels.

Under the agreement, producers would be compensated for the difference between the market price and a ceiling set on the price of electric energy.

In order to compensate wind energy companies for revenue reduction, the ministry promised to drop the electricity market law provision whereby a producer was entitled to support for a maximum of 600 gigawatt-hours during a calendar year.

The bill of amendments the government sent to parliament in November provides for both the price cap on subsidized energy and the 600 GWh ceiling.

Nelja Energia has wind farms with an aggregate capacity of 215 megawatt in the Baltic states and development projects in the pipeline to bring the total capacity to 1,080.7 MW.

 

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