Interview | Mihkel Annus, Director, Estonian Renewable Energy Association (EREA)

04 November 2019

The EREA was founded in May 2011 with the aim of bringing Estonian organizations active in the field of renewable energy together under one roof with the mission of advancing and developing the field. The main goals are to develop a stable, predictable and sustainable regulatory environment; introduce and popularize renewable energy solutions and increase awareness of their effects; participate in debates on energy; promote renewable energy through research and development; and encourage a 100% transition to renewable energy in Estonia.

 

Please introduce our readers to EREA’s mission and the state of Estonia renewables sector, in light of recent growing demand?

EREA is an umbrella association and primary contact point encompassing RES producers of electricity and heat, but also the solar, wind and other national associations. For the first time in decades Estonia has become a net importer of electricity in 2019 and there is a palpable push for new power. While there is some lobbying in favor of nuclear power, renewables are so far the best source for new power generation, in particular wind, solar and biomass. The latter is the dominant one, as half of Estonia’s heating is generated through biomass. 

The new electricity market act included an auction scheme that was put in place in the summer of 2018 after some delays. We expect a monumental shift in Estonia renewables sector – previously there was a fixed subsidy for RES production, but from now on the auction system will ensure society has access to increasingly cheaper electricity.  Estonia will have about 42% RES target from the European Union for 2030, according to which we will be creating a timeline and implementation schedule, which will be auction led. We realize that this is ambitious if we compare ourselves with other countries, but we can become even more ambitious with time given how high the stakes are for humanity to manage our carbon emissions. 

Indeed it feels like the sky is the limit and your approach sets an example for other countries – what kind of government support is the industry benefiting from?

Overall government support has been positive, however there are some challenges that still need to be overcome. As far as wind is concerned, more and more producers are looking at offshore parks , since the price for offshore wind developments have come down rapidly. In addition, the favourable wind conditions and the reasonably shallow waters in Western Estonia are ideal for developing offshore wind. Nevertheless, the defence ministry has a stake here, with fears that tall wind turbines might interfere with their radars. This is a key issue to be solved before proceeding and it calls for investments in the defence infrastructure. To give you a sense of what solving this problem could mean, two reasonably large offshore wind parks are capable of securing most of Estonia’s electricity needs.

We feel a sense of urgency in moving forward with more efficient sources of renewable energy across electricity, heating/cooling as well as the transport sectors, rather than resting on our laurels. There are limitations to the amount of government support for the sector, which we are confident can be improved upon.

Oil shale has been the dominant fuel in powering Estonia so far, how do you see a smooth transition given EREA’s 100% RES ambition?

Of course we need to transition away from fossil fuels as fast as possible, however, keeping in mind the socio-economic effects to the region. The term “just transition” is coined for exactly these occasions. The current government’s exit scheme involves a plan to support co-firing biomass with oil shale. From our standpoint, given the cheaper and more sustainable alternatives available such as wind or power, this does not seem like an ideal path to go down. On the contrary – the sudden increase in need for biomass sends a shockwave to the wood and forestry industry, also affecting district heating prices in the region. On the other hand,  technology prices have gone massively down for solar and wind, making even further sense to invest in these sectors. The local renewable market has been attracting both local and international interest, with Estonians also looking for foreign markets as well.. 

A recurrent problem the renewable industry faces is related to infrastructure – how well prepared is Estonia’s grid system in this respect?

This is indeed a matter worth considering – the grid is now focused on bringing electricity from the oil shale plants in the East to the center of the country, whereas the biggest wind potential lies in the West. Because of temperature and clouding, there is also a point being made about preferring solar production on the islands to the west as well, as opposed to the mainland.  There will definitely be a need for grid investments overall, and the plan is to streghten the grid on a North-South axis across the Baltics, with a view to synchronize the Baltic region with the Central European synchronous area. According to the existing timeline, these plans will be realized by 2025. 

What are EREA’s key objectives for the next two to three years?

We are keeping a close eye on the developments regarding the national energy and climate plan, and how it unfolds by the end of the year, having made our recommendations clear. The auctions are also presenting ongoing challenges and opportunities for the immediate and medium term future, starting with the first small scale auctions to test the waters in late 2019..  We are also focusing our attention on wind energy, working towards the resolution of the challenges already mentioned, to allow the industry to set off. 

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