Ministry: The reverse auction resulted in the market receiving 540 GWh of renewable energy in the near future
The Government of the Republic approved the results of the fourth renewable energy reverse auction of the state today, which will result in introducing 540 gigawatt-hours of electricity produced from renewable sources to the electricity market every year.
“Considering the constantly high electricity prices in all of Europe, it is important for all countries to make efforts for increasing the production of renewable energy at cheaper prices. State reverse auctions provide reassurance to electricity producers for investing in new wind and solar farms and it is excellent to note that producers have a high level of interest in increasing their production as the volume of tenders exceeded the prescribed volume by nearly three times,” said Riina Sikkut, Minister of Economic Affairs and Infrastructure.
29 tenders were submitted for the reverse auction now ended with a total volume of approximately 1,200 gigawatt-hours per year. For comparison, the annual electricity consumption in Estonia is nearly 8,500 gigawatt-hours. 12 tenders were declared successful with a total of 25 solar and wind generating installations, and the sales revenue guaranteed for them remains between 18.99 to 34.90 euros per megawatt-hour. Subsidies are not paid if the market price is higher than the confirmed subsidy rate.
The renewable energy reverse auction was initially declared for 450 gigawatt-hours of renewable energy, but the volume of the reverse auction was increased to the maximum permitted volume – 540 gigawatt-hours – arising from a high level of interest and the necessity to rapidly increase the production of renewable energy.
The subsidies to be paid depend on the conjunction of the price of the participant in the auction and the exchange price of electricity, which means that if the average monthly exchange price is lower than the price offered by the producer, the difference between these will be compensated for the producer. Successful tenderers must begin producing renewable energy by the beginning of 2026 at the latest. Renewable energy subsidies will be paid to producers for 12 years.
The reverse auction was conducted by Elering. The statement of opening the tenders along with the names of the tenderers and the offered volumes and prices is available on Elering’s website at https://elering.ee/tulemused.
The Government of the Republic has established the goal of bringing the proportion of renewable energy in Estonia to one hundred percent by 2030. In 2020, the respective proportion was 22 percent.
The next renewable energy reverse auction for 650 gigawatt-hours a year will be declared in the beginning of 2023. Likewise, new renewable energy reverse auctions are being planned for 2024 and 2025 in a total volume of at least 1 terawatt-hour.
Source: press release of the Ministry of Economic Affairs and Communications