Energy, Estonia, EU – Baltic States

Although the deal needs still government approval, this step ends a conflict that has lasted for nearly two years since so far producers had rigidly defended the support they have now.

The agreement provides a good backing for already operating companies and companies that have at least a construction permit or sales contract but intend to start operating in the near future. The subsidies for the future investments will be much smaller.

Tammist said that they are satisfied with the deal. "The agreement protects investments in power stations, keeping their income largely at today's level," he said.

Renewable energy subsidies are paid to companies that produce electricity from bio-mass, wind and water. While companies that receive the subsidy claim that if the state has once promised subsidies, it has to pay, a Competition Board analysis shows that power stations that use hacked timber could cope without the subsidies and wind energy would require a much lower subsidy level than it has now. However some smaller green energy producers have made such a high investment that the current subsidy rate even doesn’t help. The new plan replaces one subsidy rate with a complicated system that takes into consideration the capacity of the power station as well as its energy source.