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Estonia to limit wind energy subsidies

  • 2005-05-25
  • Baltic News Service
TALLINN - The Ministry of Economy and Communications said it would soon complete a draft law that intends to limit the number of producers of wind energy entitled to sell electricity at a special fixed price.

The law, if passed, would set an upper limit to the combined capacity of wind farms in Estonia. When that capacity is reached, the distribution grids will not have to buy electricity at a favorable price from any of the new wind farms that may enter the market after that.

Einari Kisel, head of the ministry's energy department, said the obligation to buy wind energy at a higher price was tantamount to a state subsidy to the generating companies and that limits to the subsidized capacity had to be decided by Parliament. The limit could be either 70, 100 or 150 megawatts, he said.

A rough estimate suggests that wind farms with a combined capacity of 100 megawatts would generate 4.0 's 4.5 percent of Estonia's overall electric energy output.

Estonia has set a goal to produce 5.1 percent of its electricity from renewable sources by 2010. These sources also include combined heat and power (CHP) stations that operate on wood. Such CHP stations should be responsible for more than half of the planned 5.1 percent volume, or about 3 percent of the nation's overall output.

Wind farms, meanwhile, are able to cover more than one-tenth of Estonia's electricity needs, Kisel said.

Wind energy is about two times more expensive than electricity generated by burning oil shale, he said.