Fortum plans Estonia’s first solar park

(Fortum, Public domain)

The Finnish utility company, Fortum plans to build a photovoltaic plant in Estonia near Tartu, the Baltic state's second largest city.

Fortum said the project is at an early stage and that the amount of investment and the size of the plant have not yet been decided. According to BNS, the project could have capacity between 10 and 50 MW and require an investment between EUR10m and EUR50m. The size of the project would depend on how much land the company will be able to secure for the project. BNS reports that the acquisition of the necessary land, which is currently owned by the state, remains unresolved. The plant is expected to be built on polluted land or former military training areas.

The CEO of local Fortum unit Fortum Tartu Margo Kulaots told BNS that the project could also be completed by the end of this year “if everything goes according to plan.”

Fortum produces and sells electricity and heat in the Estonian cities of Tartu and Pärnu. The unit in Pärnu is 100 per cent owned by Fortum, while the company has a 60 per cent stake of the business in Tartu.

New incentives for renewables

The Estonian government is replacing the current feed-in premium scheme for renewable energies with an auction mechanism. According to Andres Meesak, CEO of the Estonian PV Association, changes in regulation are currently being discussed in parliament and details of the new auction scheme will most likely be made public within the next two months.

The association has proposed an extension of the current FIP scheme for installations below 200 kW for a further three years, although the government is considering an extension only for PV systems smaller than 15 kW.

The new regulation is intended to make installation of renewable energy power systems on most new buildings mandatory from 2021 onwards.

This measure, according to Meesak, will be particularly favorable to solar, due to the fact that the cheapest way to achieve the zero-energy building (NZB) class is through the installation of a PV system. Meesak claims that from 2021 onwards there will be added PV capacity on new and renovated buildings of up to 25 MW per year.

Under the current regulations, there is a technology neutral feed-in-premium for all renewables, which amounts to EUR53.7/MWh, paid in addition to the wholesale electricity price. The FIP is paid only for the electricity injected into the grid, and not on self-consumption.

“Investment support is granted by different governmental agencies from time to time, for the diversification of business in agricultural enterprises, for renovation of apartment blocks, energy efficiency support for schools and other municipal buildings,” Meesak told pv magazine.

These measures are not permanent and are announced once or twice a year, depending on the funds available. The investment support usually covers about 30 per cent of CAPEX. New additions for 2016 totaled 3 MW, up from 2 MW a year earlier. Meesak forecasts that a further 5 MW of new PV systems could be connected to the local grid in 2017.

Meeting targets

Estonia has already reached its target of 25 per cent of renewable energy in gross final energy consumption set by the National Renewable Energy Action Plan. According to a recent report from Eurostat, the country was able to cover 28 per cent of its energy demand with renewable energies in 2015. Most of the country’s renewable energy generation capacity comes from biomass, wind and hydroelectric power stations.

Estonia is on track to become the first nation to meet the EU’s target of providing 20 per cent of its final energy use from renewable sources.

The EU’s Green Paper for 2030 climate targets mentions a potential greenhouse gas emission-reduction target of 40 per cent, and does not close the door on a 30 per cent target for the proportion of energy that renewable energy may make up by 2030.

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