Renewable energy formed 53 percent of Estonian electricity production in the second quarter

Electricity produced from renewable sources formed 53 percent of Estonian electricity production in the second quarter and covered 24 percent of local consumption. As a result of the swift increase in the production of renewable energy and the decrease in consumption, partially caused due to the coronavirus, the subsidies payable to renewable energy producers exceed the total amount of the sum collected for this purpose from consumers.

In the second quarter, Estonian power plants produced 480 gigawatt-hours of renewable energy – 17 percent more than during the same period in the last year. While electricity produced from renewable sources covered 24 percent of consumption in the second quarter, renewable energy must cover at least 30 percent of Estonian consumption by 2030.

The increase in the quantity and proportion of renewable energy in the previous quarter was supported by continued favourable wind conditions and slightly decreased electricity consumption, most likely due to the coronavirus crisis. Wind energy made up a third of the total production of renewable energy in Q2. The 163 gigawatt-hours produced is a more than 32 percent increase compared to the previous year.

Producers received a total of 24 million euros in subsidies for renewable energy from April to June, which is 23 percent more than in the same period last year. In the second quarter, 82 percent of wind energy output was subsidised, totalling 7.2 million euros. Within half a year, payments to wind energy producers have already been made in the volume of 63 percent of the annual limit of 600 gigawatt-hours.

Electricity produced from biomass, biogas and waste made up 54 percent of the production of renewable energy in the last three months. 261 gigawatt-hours of electricity were produced from the aforesaid fuel types from April to June, and subsidies were paid in the amount of nearly 14 million euros. Both the production and subsidies are equivalent to those in the same period last year.

Seven gigawatt-hours of electricity were produced by hydropower in the second quarter of the year and 224,000 euros were spent on subsidies.

The number of owners of solar panels receiving subsidies continues to grow rapidly. As of now, subsidies are paid to more than 3,000 producers. In the second quarter of the year, the amount of electricity produced via solar panels and distributed to the network amounted to nearly 50 gigawatt-hours. Thanks to the addition of new solar panels, this indicator has increased by nearly three times year-over-year.

Nearly a million euros were spent on efficient cogeneration subsidies, with production amounting to 29 gigawatt-hours.

The renewable energy and efficient co-generation subsidies are financed by power consumers through the renewable energy charge. Electricity consumers paid a total of 45.7 million euros of renewable energy charge in the first half-year. However, the amount spent on subsidies to producers has increased to 53.0 million euros thanks to the increase in the production of renewable energy, meaning that in the half-year summary, the renewable energy balance had a shortage of more than seven million euros. By the end of the year, the shortage may increase to 13 million euros. The shortage in the balance of renewable energy subsidies is partially alleviated by the recent decision of the government to allocate an additional four million euros for paying the subsidies.

The obligation to administer renewable energy subsidies has been imposed on Elering by the Electricity Market Act. Elering has thus far used loans in order to finance the shortage. Elering as a company does not earn any revenue on administering renewable energy charges and subsidies. The amount of the charge applicable to consumers depends on the annual objective to cover the expenses related to paying the subsidies.

Detailed information concerning the renewable energy subsidy amounts is available in the renewable energy subsidy section of Elering’s website.