The Ministry of Climate now acknowledges that the previously planned reverse auction-based subsidy model isn't suitable for large-scale energy projects, including offshore wind.

Ministry Deputy Secretary General Jaanus Uiga said a new financing model for such projects is being sought, as also called for in the coalition agreement, and will likely involve state guarantees or loan instruments — though the exact instruments have yet to be decided.

"It wouldn't be a reverse auction-based support scheme like we've used before," he confirmed.

The coalition agreement calls for the new funding model to be finalized by the first quarter of 2026. The ministry official added that state aid approval will likely be required as well.

Meanwhile, Elering is continuing preparations for a fourth power link between Estonia and Latvia — this time an undersea cable spanning the Gulf of Riga to link Saaremaa to the Latvian coast.

According to Priit Heinla, Elering's offshore grid development manager, the project is practical whether or not wind farms are eventually built in the gulf. He noted the link would improve energy security and supply reliability, while also enabling Western Estonia and its major islands to double their electricity production and consumption.

"Another reason is to bring cheaper electricity overall into Estonia," he added.

The project is currently in the planning and permitting phase, with an environmental impact report due by 2027 a construction permit targeted for 2028.

Heinla said that while undersea cables are costlier than onshore ones, a maritime route is preferable for connecting to Latvia's grid west of the Courland Peninsula.

At the Ministry of Climate, Uiga noted that preparations for offshore wind to date haven't yet cost taxpayers much — mainly just staff time and analyses that would have been needed for grid development anyway.

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