Kicking the gas habit: Offshore wind for the Baltic states
Applications for offshore wind parks are underway in Estonia and Lithuania, with the largest application so far, for a 1GW development. Can these ambitious projects deliver the Baltic States from their current gas dependency?
By Vytautas Gaizauskas, Eastern Europe correspondent
Estonia and Lithuania are looking to harness their offshore wind resource as a means of reducing both countries’ dependency on Russian gas.
Estonia’s long coastline, dominating south-west winds and sparse population, makes it a strong candidate both for on and offshore wind energy generation.
Estonia has committed to sourcing over 20% of its energy needs from renewable energies by 2020. Bouyed by an energy strategy dictating that wind power generation capacity must reach 900-MW by 2018, the prognosis for the wind sector looks promising.
Estonia currently has 150-MW of installed onshore wind energy generation capacity, with a further 375MW due to come online in 2013. To achieve its 2018 target, 400-MW of wind parks are to be installed onshore, alongside 500-MW of offshore parks.
According to Martin Kruus, chairman of the board at both Estonian Wind Power Association and at Estonian wind park developer, Nelja Energia: “Theoretically, Estonia could cover the vast majority of its electricity demand by wind.” But he cautions: “Accumulation and balancing power plants should be built in parallel.”
Open for business
Estonia’s ministry of economy and communications has already received two applications for the construction of offshore wind parks.
The renewable energy arm of state-owned energy giant, Eesti Energija, the country‘s main power generator, distributor and supplier, submitted an application for a 700 - 1,000-MW capacity offshore park in Riga Gulf of the Baltic Sea.
The second notable application came from wind energy developer, Neugrund, a relative newcomer to Estonia’s wind energy sector. Neugrund expressed its intention to build 190-MW offshore wind park, comprising 38 5MW turbines in the Gulf of Finland, on the North-western coast of the Estonia.
Predating these applications was Nelja Energia’s, a joint-venture between OÜ Solarcom, Scandinavian power company Vardar Eurus, and investment firm, United Partners. Nelja Energia plans to construct 700-MW wind park in the vicinity of Hiiumaa island, in South-western Estonia.
Estonia has an important advantage over its southern counterpart, Lithuania, insofar as it has already enacted the legislation necessary to support offshore wind energy development. Even so, considerable ground must be covered before any of its proposed projects see the light of day.
Each project’s environmental impact assessment and other necessary procedures have yet to be carried-out. Furthermore, Estonia has yet to introduce a robust support system required to encourage investment into the industry.
Wind energy developer 4Energija recently presented an environmental impact assessment for a proposed 800-MW offshore wind park to state institutions in May this year - the first Lithuanian wind energy developer to have done so.
The application has also Estonian roots - 4Energija belongs to the same group of the companies as the Estonian developer Nelja Energia.
“We have chosen 4 locations in the Baltic Sea, the distance between them and the coast varies 30 to 40 kilometers”, Tadas Navickas, director of 4Energia, said. “The capacity per turbine to vary 3.6 to 6-MW,” he added.
Navickas considers that the grid in a western part of the country has been developed sufficiently to handle electricity generated by 1,700-MW capacity wind energy parks, without any additional investments.
However, a legal framework supporting offshore wind parks is absent in Lithuania, presenting a serious obstacle to offshore wind park developments.
“The renewable energy law has already been referred to Lithuanian parliament”, explained Saulius Piksrys, director of the Lithuanian Wind Energy Association. “It is possible that this law could be adopted in the near future.”
He cautions, however, that the law alone is insufficient to create an enabling environment for the construction of offshore wind parks. He says the government needs to adopt several decisions defining various procedures and requirements, such as the type of the feed-in tariff only, and the level at which is whoudl be set. “This could take anything up to a year,” he added.
Because Lithuanian law currently doesn’t include any restrictions for construction of offshore wind parks, theoretically, 4Energia could develop its wind park - if Lithuanian state officials chose to turn a blind eye. However, this is unlikely to happen, according to Piksrys. As such, progress on 4Energia’s wind park will likely be stalled for at up to a year.
Piksrys estimates Lithuania’s total potential of offshore wind power generation capacity to be around 1GW, given its short coastal line. It would be near shore, shallow water parks due to the limited size of the maritime economic area of the country and due to restrictions caused by environental, maritime transport and other issues. The country currently has 101-MW installed onshore wind energy generation capacity.
Both Estonia and Lithuania have yet to develop domestic supply chains. To date, turbines, towers, nacelles and cables have been imported, with Germany’s Enercon and Finland’s WinWind acting as the main suppliers. The annual equipment demand of both countries, calculating from the current realistic onshore installation plans, comprises roughly US$100 million each. This figure will likely increase sharply in the future, particularly in Estonia
The main challenge for the development of wind energy generation facilities in the Baltic States, according to Saulius Piksrys, are vested interests among companies importing electricity from Russia.
Powerful lobbyists are able to slowen down the process significantly, even impeding the relevant law-making.
The game is worth lobbying: in theory, Lithuania could cover its total electricity demand by renewables, with half of power generation from wind and the remainder from biofuels.
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