The Estonian Parliament voted Wednesday on several amendments to Electricity Market Act, which will regulate incentives for renewable energies over the coming years.
According to Andres Meesak, CEO of the Estonian PV Association, the amendments will introduce substantial changes in the regulation of PV incentives, although they represent a rather weak compromise for the solar sector.
The first important change is the introduction of size limit within the current feed-in-premium (FIP) scheme, which grants a 12-year tariff of 53.7 €/MWh in addition to NordPoolSpot wholesale market hourly spot price. Prior to the new rules, the scheme was technology neutral and without capacity limits, so any renewable energy production unit was eligible, while the new provisions establish a size limit of 50 kW (AC). “The compromise for small installations below 50 kW was achieved after extensive lobbying from the sector,” Meesak said to pv magazine. “These new rules may favor solar, as there are no technologies other than PV in the limit which could be economically viable,” he also stated.
Another important development for commercial and industrial PV will be the introduction of technology-neutral auctions for renewable energy projects with a capacity between 50 kW and 1 MW, which will be held over the next three years. “These auctions will add power generation capacities for a total of 5 GWh per year, this means between 5 MW and 6 MW of new installed power, which is currently just 30-40% of full annual market addition,” Meesak also stressed.
Furthermore, the amendments to the Electricity market act introduce new provisions for the direct line business models, a formula which is seeing growing interest in other European markets and enables a renewable energy producer to sell one power to a single consumer without utilizing public grid. “So far, the direct line was limited to very restricted territory the generator and consumer had to locate on same or neighboring landplots, now the limit is wider,” Meesak further explained.
According to Meesak, it is quite clear that the PV market in Estonia will be very much concentrated on small-sized installations and high levels of self-consumption. “The more electricity is consumed on site, voiding purchase from grid, the sooner is break-even point and higher project IRR”, he stated. “This defines Estonia clearly as roof-top PV market for some years to come. Especially, as energy efficiency minimum requirements tighten up, like in the whole of Europe”, Meesak added. According to him, in fact, on latitude and climate of Estonia it will be economically most effective to achieve near zero or net zero energy class of the building, which will be obligatory for new buildings starting from 2021, with a PV power generator. This means that from 2021 onwards only new buildings will contribute to add between 22 MW and 25 MW of PV capacity in Estonia per year.
Estonia’s cumulative PV capacity reached 20 MW at the end of 2017.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.