Estonia now has around 107 MW of cumulative installed PV capacity, according to provisional figures provided to pv magazine by Andres Meesak, CEO of the country’s PV association.
That means, during 2018 PV registered record growth in the Baltic country as, at the end of 2017, cumulative capacity stood at only 17 MW.
The 90 MW or so of newly deployed solar, according to Meesak, is the result of a new policy for solar and renewables introduced by the Estonian government in June. “The Electricity Market Act was passed in parliament on June 6, the real race started after the market regulation was clear,” said the solar body CEO.
The PV rush was also boosted by the termination in September of the minimum import price applied by the EU to Chinese imports, a move which further accelerated the downwards trend in solar panel prices.
“Developers delayed signing module purchase contracts until September in order to get further leverage from lower module prices. So I’d say 80% of the 90 MW developed in 2018 was done in [the] second half,” added Meesak.
Direct line PPAs fire solar market
Most of the growth came from installations not larger than 50 kW in capacity, which are granted a 12-year tariff of €53.7/MWh. That rate should remain into force until the end of 2020, stimulating further growth. According to Meesak, this year and next small-scale solar will see an increase in new capacity of 15-18 MW per year. “After 2020, when the energy efficiency minimum requirements for buildings are fully enforced, only new and significantly renovated buildings will contribute annually – with 23 MW and 25 MW [respectively] – and these will all be, most probably, small-scale installations,” he said.
No information has been released about auctions for projects ranging in size from 50 kw to 1 MW, which are part of the new legislation, Meesak said, adding: “The only thing the sector knows is written in the law – there should be auctions for small-scale generators in order to add 5 GWh of guaranteed annual energy production over a 12-year period.”
Further growth may come from the direct line business model and related PPA business. The new legislation allows the owners of PV systems installed under the regime to sell power to more than one customer. Previously, the direct line could provide power to only one customer and the generator had to be on the same or a neighboring plot. “This means energy producers can build a direct line to one or more customers and negotiate with them PPA conditions without involving [the] grid,” Meesak said. “This means the PV installation can be developed theoretically without any connection to [the] grid, if a sufficient amount of consumers [are] available … This is usually industrial park areas, where large consumers are concentrated.”
Renewables eat into shale gas picture
The new business model may be key to seeing the first solar plants with more than 1 MW of capacity in Estonia. “So, with clever planning I don't see too [many] obstacles,” added Meesak. “I predict to see already in 2019-20 … several multi-megawatt installations in this segment.”
The PV association CEO said storage is still not economically feasible in the Estonian electricity market, as grid power is cheap.
State-owned utility Eesti Energia announced its plans to enter the solar business in September, when it proposed leasing solutions and turnkey projects for self-consumption for customers. The power company, however, still owns and operates the largest shale oil fuelled power complex in the world – the 2.6 GW Narva Power Plants – which in 2007 was able to deliver around 95% of Estonian power.
In 2016, the percentage fell to 80% as a result of the growth of wind power and this year Eesti Energia will close four blocks of oil shale generation units with a total capacity of some 619 MW at the complex.
In 2017, Estonia saw the share of renewables in its energy mix increase from 14% to 16.9%, with biomass, biogas and waste accounting for around 56% of the output of renewables, and wind 42%.
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