Estonia's Elering to connect 2.7GW of RES in 2024-27

Estonian transmission system operator (TSO) Elering has signed connection agreements for 2.7GW of renewable projects to be implemented over 2024-27, as the firm expects oil shale power generation to be phased out by 2027, Elering told Argus.

Elering will build out connections from 322MW of renewable production capacity to the domestic grid this year, according to signed connection agreements. Solar power projects will account for 218MW of the capacity, while the rest will be storage systems such as battery and hydro storage projects. The TSO will then build out connections to 1.72GW of renewables in 2025 and 306-412MW by 2026-27, which will primarily be solar power and storage systems, but also some wind power plants (see table).

The TSO's plans to connect a large number of renewables to the grid over the coming years are based on expectations that power generation from shale oil will be pushed out of its energy mix by 2027, with the technology possibly not even used during peak demand periods, Elering said.

"Based on market simulations, we forecast that oil shale will not remain competitive in the market, even when considering higher prices during peak hours," the TSO said. "This forecast is further supported by [plant] owners' expectations to remain in the market until the end of 2026."

Elering is not concerned about negative prices in the power market — which have become more frequent as wind and solar power generation have increased — and instead views the issue as an investment signal to market participants.

"Based on these signals, market participants can make investment decisions," Elering said. "Renewables accounted for over 50pc of electricity production in 2023 and at present the owners of the oil shale plants do not plan to have plants in service post-2026."

Elering has proposed an auction for capacity reserves to the state. The new controllable capacity could allow for more renewable production, the TSO said.

Elering is taking the necessary steps towards building two additional interconnectors in the next decade. These include the EstLink 3 power link with Finland, which will have a capacity of 700MW, and a 1GW power cable with Latvia. And Elering may consider building a 2GW interconnector with Germany in 2040.

Separately, Estonia is set to have significant growth in its offshore wind power capacity, as it launched a tender for seabed rights for three offshore wind areas in January. It is planning to launch another tender this month for the development of an offshore wind farm that will have a capacity of 0.82-1.2GW, and has completed tenders for the Liivi 1 and Liivi 2 offshore wind farms.

By Makani Joinville and Brendan A'Hearn