Renewable Energy Subsidy

Subsidies are paid out as set out in §59 of the Electricity Market Act in order to promote the use of renewable energy sources, make the energy sector more efficient, and ensure the security of domestic supply and capacity.

According to the Electricity Market Act, it is the TSO, i.e. Elering, which pays out the subsidies. The cost of financing the subsidy is passed on to consumers in proportion to their consumption of network services and the amount of electricity consumed through direct lines. Financing of the subsidy scheme is described in more detail in the section on Renewable energy charges. Information about the State Aid paid out by Elering is available at the state aid registry which is governed by the Ministry of Finance and can be accessed via their webpage.

Under § 591 of the Electricity Market Act, eligible wind power producers may receive subsidies until a total of 600 GWh of electricity has been produced from wind in Estonia in a calendar year. Calculations are kept separate for each calendar year. Most recently the 600 GWh cap was reached on 27. november 2020.

The European Commission approved and granted state aid permission to the Estonian support scheme for renewable energy sources and highly efficient combined heat and power plants in 2017. The state aid permit can be found on the EC website. The guidelines on State aid for environmental protection and energy 2014-2020 are published here.

To register as a subsidy recipient in Estonia:

Due to the end of the existing renewable energy subsidy schemes, the subsidy to new installations will only be granted through reverse auctions from year 2021.

The conditions of and procedure for the aforementioned reverse auction is described in the regulation “Taastuvast energiaallikast ja tõhusa koostootmise režiimil energia tootmiseks korraldatava vähempakkumise tingimused ja kord“.

The first reverse auction was organized in 2019 and the deadline for tenders was at 17.00 on 18. March 2020, the deadline for tenders of the second reverse auction announced in 2020 was at 17.00 on 14. September 2020. The third reverse auction is currently underway and the deadline for tenders is at 17.00 on 15. July 2021

 

In accordance with the Electricity Market Act, an electricity producer using renewable energy or CHP sources (hereinafter: Producer) has the following monthly obligations:

  • 5th day of the month (working day) – the Producer submits data regarding total electricity production for the preceding calendar month separated by generation installations to the transmission system operator, Elering, as well as data regarding electricity produced from renewable sources or in CHP mode also for the previous calendar month. Data is submitted electronically to the Data Warehouse (andmeladu.elering.ee) or in agreement with the Renewable Energy Unit to resupport@elering.ee.
  • 7th day of the month (at the latest) – unless there is an automatic procedure in place, the Producer submits an application to receive a subsidy for electricity produced and offset hourly against the grid for the previous month. The applications are handled electronically via the Renewable Energy Information System green.elering.ee
  • 21st day of the month (or the following working day in case the 21st date falls on a weekend or national holiday) – Elering pays out the subsidies based on the processed application.

 

Yearly obligations to determine the additional costs for financing the ongoing subsidy scheme:

  • 1st November – Producers are obligated to provide Elering with their production forecasts for the next calendar year. The distribution network operators and direct line possessors send Elering their forecasts for the volume of network services offered and the volume of electricity consumed via a direct line during the next calendar year.
  • 1st December – Elering publishes an estimate for the next year concerning the cost of funding the aforementioned support for electricity generated from renewable energy sources or in an efficient co-generation process.

In accordance with the Electricity Market Act, an electricity producer using renewable energy or CHP sources (hereinafter: Producer) has the following monthly obligations:

  • 5th day of the month (working day) – the Producer submits data regarding total electricity production for the preceding calendar month separated by generation installations to the transmission system operator, Elering, as well as data regarding electricity produced from renewable sources or in CHP mode also for the previous calendar month. Data is submitted electronically to the Data Warehouse (andmeladu.elering.ee) or in agreement with the Renewable Energy Unit to resupport@elering.ee.
  • 7th day of the month (at the latest) – unless there is an automatic procedure in place, the Producer submits an application to receive a subsidy for electricity produced and offset hourly against the grid for the previous month. The applications are handled electronically via the Renewable Energy Information System green.elering.ee
  • 21st day of the month (or the following working day in case the 21st date falls on a weekend or national holiday) – Elering pays out the subsidies based on the processed application.

 

Yearly obligations to determine the additional costs for financing the ongoing subsidy scheme:

  • 1st November – Producers are obligated to provide Elering with their production forecasts for the next calendar year. The distribution network operators and direct line possessors send Elering their forecasts for the volume of network services offered and the volume of electricity consumed via a direct line during the next calendar year.
  • 1st December – Elering publishes an estimate for the next year concerning the cost of funding the aforementioned support for electricity generated from renewable energy sources or in an efficient co-generation process.
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