Estonia axing reverse auctions has not seen offshore wind developers pull the plug
Since the state abandoned its plan to support offshore wind farms through an underbidding scheme, foreign investors may be less inclined to pursue renewable energy projects in Estonia, potentially slowing the rollout of planned developments. However, developers who spoke with ERR said none of their projects have been scrapped.
The state's decision to abandon an auction scheme for offshore wind farms could dampen foreign investor interest in Estonia's renewable energy sector and slow the rollout of projects. Developers, however, say none of their projects have been scrapped.
In February, the government dropped its plan for an offshore wind reverse auction that would have cost up to €2.6 billion. The European Commission's authorization for state aid also expired in April. While former Climate Minister Yoko Alender (Reform) suggested Estonia might try again in 2026, Energy and Climate Minister Andres Sutt (Reform) confirmed in August that no such auction would take place. A day later, Enefit Green and Japan's Sumitomo ended their partnership on the Liivi Bay offshore wind project.
Enefit Green CEO Juhan Aguraiuja said foreign investors need predictability and trust in the state apparatus. Enefit Green still considers offshore wind a crucial part of solving Estonia's energy deficit, with two projects planned: the 1,000-megawatt Liivi offshore wind farm and the 1,100-megawatt Northwest Estonia project. Utilitas Wind and Sunly, which are developing separate offshore farms, also told ERR they remain committed but stressed the need for investor certainty.
Developers say that without auctions, projects may take longer. Financial guarantees are being prepared as an alternative, but companies remain cautious. Aguraiuja stressed that the Baltic states' electricity deficit will persist, meaning offshore wind remains strategically vital, even if construction is delayed.
Onshore wind reverse auction still planned
Although Ministry of Climate Deputy Secretary General Jaanus Uiga said in July that it has now been concluded that an auction-based model is unsuitable for large-scale energy projects — not only for offshore wind but for others as well — an onshore wind auction is still planned.
Even so, the government's approval of its terms has been repeatedly delayed.
The Climate Ministry told ERR that it has sent the necessary documents to the government for authorization, and once the government approves them, the auction can be announced. The coalition agreement states the deadline is the third quarter of this year, the ministry added.
The auction is planned for one terawatt-hour of wind energy, which could be increased to two terawatt-hours if bidding is strong. Production must begin no later than December 31, 2029. The support period will run for 12 years from startup, with a support cap of €20 per megawatt-hour.
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Editor: Marcus Turovski
