Energy, Estonia, EU – Baltic States, Investments

Since the price of electric energy produced at offshore winds farms is not competitive with the current market price in the context of Estonia and Lithuania, the group has left offshore generating sites out of its business plans until at least 2020, it stands in the annual report of Nelja Energia AS.

In recent years the price of electricity in the Baltic countries and the Nordic countries has been in the region of 30 euros per megawatt-hour, which according to Nelja Energia CEO Martin Kruus does not allow to build any additional generating capacities without a subsidy.

As things stand now, Nelja Energia will develop projects to the point where they can be resumed immediately when the a suitable opportunity opens up.

"Nelja Energia aims to develop the projects technically to the point where they could be quickly embarked upon when a favorable opportunity arises," Kruus told BNS.

While declining to reveal what price level would make the projects feasible, Kruus said that the price fixed at 69.5 euros per megawatt-hours for the output of the Silute wind farm completed in Lithuania last year was suitable for the project to be carried out.

Kruus also mentioned an agreement concluded by Vattenfall in last November under which Vattenfall will develop a 600 megawatt wind farm in Denmark with a fixed electricity price of just 49.9 euros per megawatt-hour, indicating that the payback price for Nelja Energia could be in between these two.

Speaking about potential subsidy mechanisms, Kruus mentioned the sale of electricity to countries that are unable to meet their renewable energy targets themselves.

Nelja Energia is planning to build a 700 megawatt wind farm in the sea off the northern Coast of the island of Hiiumaa for up to two billion euros. The company also is working on a project to build a 400 megawatt offshore wind farm in Lithuania.