Locals to be paid a fee when new wind farms are built in Estonia

TALLINN - The Riigikogu earlier this week adopted legislative amendments which, as of July 1, 2023, oblige the founders of wind power plants to pay a fee to local municipalities and residents in order to facilitate the establishment of new renewable generating assets in Estonia.

Minister of Economic Affairs and Infrastructure Riina Sikkut said the step was taken to motivate local communities to contribute to the establishment of wind farms and also to share part of the income with the residents and municipalities directly affected by a wind farm.

"Although wind farm developers have concluded agreements entailing payouts with communities or municipalities also in the past, the legal basis for such agreements has been deficient in Estonia. I am pleased that the fee for the production of wind energy is now enshrined in law, and I hope that this will give an additional impetus to the development of wind farms in different parts of Estonia," Sikkut said. 

According to the amendment, the fee will be paid to municipalities and residents who live in an area affected by a wind farm. People living up to three kilometers from an onshore wind turbine will receive a fee of up to six months' minimum wage.

For onshore wind farms, the fee is calculated as a percentage of the farm's output and electricity price. For example, if the electricity price for a 100 megawatt wind farm is 50 euros per megawatt-hour, the fee would be 150,000 euros per year, and if the fee were shared between the local authority and 100 households, each resident would receive around 750 euros per year.

In the case of offshore wind farms, only the municipality whose coastline is closer than 20 kilometers is entitled to the fee. For offshore wind farms, the size of the fee also depends on the output and the price of electricity, being, for example, approximately 1.4 million euros per year in the case of a 1,000 MW farm and an electricity price of 50 euros per MWh.

Fishery undertakings will begin to receive a compensation in the case when their catch diminishes because of a wind power station. The obligation to pay a wind turbine charge will not extend to the wind farms that are already operating.