Renewable Energy Reached Almost 13% of Estonian Consumption

Last year the generation of electricity from renewable sources covered 12.9% of Estonian electricity consumption (9.0 TWh, including consumption within power stations) which is 3.2% more than in the previous year. Waste and biomass provided the largest share of renewable energy.

Estonian production of renewable electricity was 1160 GWh during the whole year, which represented an increase of 35% on the previous year. The main driver of this rise was the increased production of electricity from biomass, biogas and wind power. In the year as a whole, 66% of renewable electricity came from waste and biomass, 31% from wind energy and 3% from hydroenergy.

Last year, 1066 GWh of renewable energy qualified for subsidies, which meant an increase of 40% in the amount of subsidised renewable energy and an increase of 57.2 million euros in the amount of subsidy paid out. The main reason for the increase in the amount of electricity qualifying for the subsidy was the growth in the amount produced from wind and biomass. The largest new recipients of subsidies were the Fortum Termest combined heat and power (CHP) plant in Pärnu, which started operation at the end of 2010, and the Virtsu III and Vanaküla wind parks. The subsidy to the Narva power plants for electricity production from biomass also increased.

Taavi Veskimägi, the CEO of ELering said that the growth in the amount and the share of renewable energy has been very fast in Estonia, and that this is of course a very welcome development, but one that equally shows clearly how the current system for subsidies needs to be overhauled. “In this context the ministry’s desire to alter the renewable energy subsidy system is very logical and, given the increase in the income of producers as the market opens, it is also very fair. For this reason it is important to make corrections to the system for renewable energy by the time the electricity market opens fully on 1 January 2013. A method that would be fairly proportional for the reasonable expectations of producers and consumers is one where producers give some of the income that they are receiving above the fixed price back to consumers through a lowering of the subsidy for renewables,“ he explained.

“Consumers cannot bear the whole weight of the more expensive electricity. The renewable energy fee now makes up almost 10% of their monthly electricity bill and given the current numbers for renewable energy, it is possible to reach the government’s targets for renewable electricity in a way that places a much lower burden on consumers,” he added.

The amount of wind energy receiving the subsidy rose by 45% from its 2010 level to 272 GWh while the amount of electricity produced from biomass and receiving the subsidy was 36% more than last year at 747 GWh.

Applications for the subsidy for efficient CHP production last year were 21% higher than a year earlier at 4.7 million euros and the amount of electricity receiving the subsidy rose from 121 GWh to almost 147 GWh. The main reasons for this were that a new CHP plant started operation at the end of 2010 in Pärnu and that Kunda Nordic Tsement AS and some other small CHP plants increased their electricity production. There were also changes in the Electricity Market Act that meant that last year subsidies started to be paid for electricity transmitted along lines owned by producers.

Production of electricity from hydro-power was up by 13% on the previous year at 31 GWh due to the heavy precipitation during the year.