Change in renewable support infringes on ownership protection - Estonian wind energy body

Photo: Peeter Langovits

Making changes to the system of support for renewable energy generation in Estonia prejudices the principle of protection of ownership and its actual effect on the development of renewable energy, but also partnership between the state and the private sector more broadly can be assessed only in the future, the board chairman of the Estonian Wind Energy Association has said.

"After the discussion and vote on renewable energy support in the Riigikogu economic affairs committee on Thursday, we have to state that by unilaterally altering the system of renewable energy support the state is about to set a negative precedent," said the head of the association, Martin Kruus. "It's deplorable that the state does not value private initiative and investments and creation of competition on the energy market that is related to it."

He said that turning back toward the former energy system will prove a mistake in the longer term correcting of which will be unreasonably expensive.

"The decision of the Riigikogu economic affairs committee violates the memorandum signed between producers of renewable energy and the minister of economy and communications in the summer of 2012, in which producers of renewable energy, while agreeing to the limiting of income from renewable energy to 93 euros per megawatt-hours, did it on the condition that for existing producers the cap on wind energy support on a level corresponding to an output of 600 gigawatt-hours per year will be abolished," Kruus said, pointing out that the economic affairs committee reinstated in the bill the cap of 600 GW.

From the consumer's point of view it's important to emphasize that removal of the 600 GW limit would have concerned existing producers alone. That in its turn would have curbed increases in the renewable energy fee in the future, he said.

"Now both local and foreign investors will have to reckon with the precedent – the words of the Estonian state do not count. As a result the risk level of investments will increase and involvement of private capital in long-term projects will become questionable. For producers of renewable energy an in-depth analysis of the situation and drawing up an action plan consistent with it lie ahead," said Kruus.

The economic affairs committee of the Estonian parliament on Thursday decided to change the electricity market bill currently handled by the Riisgikogu in such way that the dividing line between old and new renewable producers determining the right to renewable generating subsidy would be set on March 1 this year.

The original watershed date in the bill is July 15, 2012.

The chairperson of the standing committee, Kaja Kallas, explained to BNS that the line cannot be set in accordance with the date when the law comes into effect because its coming into effect is linked to the European Commission's state aid permission.

The provision that the amount of wind energy to be supported will be capped at 600 gigawatt hours a year was left in the bill. "Now the producers definitely will protest," Kallas said. "From the consumer's point of view the sum will be the same, for the producers it will be a thinner soup."